Markets crash, “economic damage going to last”

Markets crashed on Thursday.

The S&P 500 plummeted 9.5 percent, its worst day since 1987. The STOXX Europe 600 plunged 11.5 percent, its worst day on record. Earlier in Asia, the Nikkei 225 sank 4.4 percent while the S&P/ASX 200 plunged 7.4 percent.

Oil prices plunged, with Brent crude falling 7 percent amid travel restrictions and a price war between OPEC and Russia.

An announcement by the Federal Reserve that it will ramp up its overnight funding operations and add purchases of US Treasury notes and bonds “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak” failed to stem the declines.

“I have never seen moves like this in 35 years of trading,” Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, said of the disruptions. “At this point, the market will get absolutely exhausted.”

Meanwhile, the global economy may be going into recession, according to Mohamed El-Erian, chief economic advisor at Allianz.

“We are going into a global recession” El-Erian said. “The economic damage is going to last.”