El-Erian sees stock market decline reaching 30% from highs as world goes into recession

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Economist Mohamed El-Erian said Thursday, 'Hell no,' about so-called V-shaped bounce; Wall Street talk for a quick down and quick up. He said the market chart would look like a 'U' or an 'L.'

on Thursday that investors should not expect a quick recovery in stocks when a bottom is finally reached.

El-Erian said, "Hell no," about so-called V-shaped bounce; Wall Street talk for a quick down and quick up. He said the market chart would look like a "U" or an "L," suggesting more time spent at the lows before a recovery begins. When the stock market snaps back, and he believes it eventually will, El-Erian said it would lead the recovery in the economy. He said that global economies will be slower to restart after the shock of the coronavirus.that individual investors should "resist our inclination to buy the dip" as coronavirus concerns were just starting take stocks lower. He has not wavered in that advice since.

On Monday, he said the stock market could experience a "20%, 30% drop in prices" from mid-February's record highs. He said Thursday he believes the market will drop closer to the 30% part of that range.

 

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