Wall Street Draws Parallels to 1987 Crash, But Key Differences Remain

Some on Wall Street are drawing comparisons between current market conditions and those before the "Black Monday" crash in 1987. However, there are also important differences between now and 1987.

Charts comparing 2023 to 1987 have gone viral on social media, with some seeming eager to relive the crash. However, skeptics say the comparisons ignore key differences.

Factors like overvaluation, economic growth, and interest rates were different in 1987 versus now. Stocks also reacted differently to rising yields back then.

Even if a 1987-style crash occurred, it's unclear if bonds would rally like they did then. Some think a stock plunge is needed to stem losses in bonds.

Strategists like Jefferies' Christopher Wood warn about yield and 1987 parallels, but others like NDR say not enough factors line up to expect a crash.