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Odds of Recession at 80% – A looming recession

As of this morning, stock futures more than 5% (about 1,000 points drop), and hit ‘limit down’ halt due to unprecedented volatility amid coronavirus crisis. S&P 500 ETF down roughly 6% indicates where markets headed.

There is 80% chance US will enter into a recession due to pandemic coronavirus sudden economic stops, which has decimated the restaurant industry, the airline industry, the hotel industry, the travel industry and the cruise industry, and sudden stop in economy activities, depression of oil / energy industry . However, there is chance where US might not enter based on fiscal stimulus relief to small business, and impacted industry due to coronavirus.

Wall Street has seen unprecedented volatility in swinging more than 4% in previous sessions. There is a possible of global recession of a magnitude never seen before if pandemic got worse.

10 year treasury yields jumped above 1% level after the announcement of details related to a potential fiscal stimulus.

“Fear gauge” of Wall Street reached historic heights, which closes above its peak since 2008 financial crisis on Monday, and CBOE Volatility Index looks at options pricing for S&P 500 stocks.

Five things to know before markets open:

  1. King Dollar: Dollar strength slams global currencies, and sterling (GBP/USD) fell 1.5% at 1.1916 to levels seen aftermath of Brexit in October, 2016.
  2. Oil: US oil crude prices fell (below $26) to near 18-year low on fear of coronavirus, and on pace for worst monthly price depreciation.
  3. Coronavirus: Global infected confirmed cases reach 200,000, and death top 8,000; Europe acts new epic center for the virus.
  4. Biden wins in primary sweeps in Florida, Illinois, and Arizona  
  5. White House $1 Trillion fiscal stimulus package push; it might include direct payment or tax cut, relief for most severe effected industries due to virus.
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