The mass sell-off of stock amid the global coronavirus outbreak has driven oil prices, stock, and bond yields lower, a fact that could lead to a global recession. According to CNN, oil prices decreased seemingly overnight Monday after an alliance between OPEC and Russia was severed when Russia refused OPEC’s proposal to help the struggling oil market. As a purported result, oil prices dropped over 10 percent, the sharpest decline in oil prices since the Gulf War in 1991.
Global stocks are also seeing a marked decline — European stocks are down over 6 percent and the Dow has dropped by 5 percent, according to Market Insider. Nigel Green, chief executive and founder of financial advisory organization deVere Group, commented on the decline in oil prices and stock. He said that the drop in oil prices has further fueled the sell-off of stock, which began weeks ago amid fears that the coronavirus would have a staggering impact on economic growth.
“I now believe that it’s almost inevitable that there will be a global recession this year.”
Another analyst — Neil Wilson, chief analyst at Markets.com — has also spoken about the latest figures regarding the oil and stock drops.
“This will be remembered as Black Monday,” Wilson said.
He added that no one knows just how much the coronavirus will impact the economy, but that “bond and equity markets are screaming recession.”
Additionally, CNN reports that many investors were nervous as they woke up on Monday. Not only have oil prices plummeted and the Dow dropped, but the announcement from Bank of America that $9 trillion was “wiped off global stocks” in less than two weeks has no doubt added to investors and analysts’ fears over a market crash.
U.S. markets weren’t the only ones affected. The FTSE 100 plunged to 8.5 percent during just the first few minutes on the trading floor, a low not seen since October 2008. As Spreadex Financial Analyst Conner Campbell said, European markets have not seen this strong of a plummet since the “aftermath of the Lehman Brothers collapse.” He added that the turmoil caused by the coronavirus and continued “alarming” headlines have made people panic even more.
Monday’s news comes after weeks of major stock market dips. The last week of February saw the Dow Jones Industrial Average fall more than 1,000 points. Economists and financial analysts don’t fully know the extent to which the coronavirus will impact the economy. But as Campbell pointed out — and with the hashtag “#MarketCrash trending — Monday’s session “felt like a different kettle of fish.”