A top market analyst is nervous about the effects of the novel coronavirus on the global financial infrastructure after stocks tumbled into “uncharted waters.”
CNBC’s Jim Cramer lamented the plunge registered by 10-year Treasury yield on Monday morning, and U.S. oil prices tumbled as Saudi Arabia flooded the market to gain market share from Russia.
“The collapse in yields and oil is signalling an imminent recession,” Cramer tweeted on Tuesday. “I think we need to parse everything and remember that while most stocks aren’t buyable, they will get to be that soon enough at this pace.”
The Dow Jones Industrial Average dropped nearly 2,000 points during afternoon trading, and New York Stock Exchange circuit breakers, which are intended to shutter the market if it falls dramatically, were triggered after U.S. markets opened down 7% within 30 minutes of the opening bell.
The 2008 recession happened when the subprime mortgage market collapsed, triggering the circuit breaker mechanism along the way.
Cramer has been skeptical of claims that the virus originated in the Wuhan seafood market, saying in late January that “China has a history of lying.”
As of Monday afternoon, COVID-19 has killed more than 3,000 people and infected more than 100,000 people worldwide.
Cramer was surprised by overnight trading, which drove futures down and primed the market for an unprecedented drop in the morning.
“The algorithms operated all night as if trillions of dollars were trading,” Cramer added. “Uncharted waters.”
