The global markets rout continued into Monday morning following a historic weekend for stocks and commodity trading over the weekend.<\/p>\n
Trading of S&P 500 futures were halted Sunday following a 5% decline, indicating U.S. stocks will plunge at market open. The panic selling followed the largest one-day decline in oil prices in 30 years, which was set-off by a breakdown in conversations between OPEC and Russia to cut crude output.<\/p>\n
The outlook for the oil market is bleak, according to Goldman Sachs. In a note to clients, the investment bank cut its second quarter and third quarter estimate for oil prices to $20 a barrel.<\/p>\n
The jitters in oil are underpinned by broader market concerns about the economic ramifications of the ever-spreading corona-virus, which surpassed more than 100,000 confirmed cases over the weekend. Italy, a country reeling from its inability to control the virus outbreak, is limiting travel to the most impacted regions.<\/p>\n
Indeed, investors have been seeking safety over the course of the last month, fleeing risk assets from bitcoin to stocks. As such, the yield for 30-year U.S. Teasury fell below 1% for the first time in history, while the 10-year hit a record low of less than 0.4%. Experts expect the Federal Reserve will once again slash interest rates to curb corona's fall-out.<\/p>\n
Investment banks such as Citigroup and Goldman Sachs have been sounding the alarm bells, noting in research to clients that market turmoil might continue until the end of the year.<\/p>\n
\"The US economy could slip into a recession if the coronavirus contagion lasts for an extended period of time,\" Goldman Sachs said in a note reviewed by The Block.<\/p>\n
\"In that situation, we estimate S&P 500 EPS would fall by 13% to $143 in 2020 and the index would decline to 2450 by year-end.\"<\/p>\n
The index ended Friday's trade at around 2,972, a more than 12% decline since February 19.<\/p>\n
As for bitcoin, the price of the digital currencywhich has been lauded as both a safe haven and uncorrelated asset by some market pontificatorshas largely been in lock-step with the broader market. It has dipped below $8,000 Monday morning, trading down more than 12% since Saturday.<\/p>\n
Story continues<\/p>\n
Meanwhile, CME Group Bitcoin futures arguably the easiest product for traditional traders, hedge funds, and large asset managers to get exposure to bitcoin had seen volumes fall off a cliff since breaching $1 billion in traded volume the day before the S&P500 peaked. The 7-day rolling average trading volume of CME bitcoin futures is down more than 75% since then.<\/p>\n
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