Stocks are on track for their worst week since the financial crisis in 2008, as investors grow increasingly worried about the economic impact of the coronavirus pandemic.

Looking at the data, “recessions accompanied four of nine major selloffs since the 1970s,” said Citi economist Andrew Hollenhorst. While the risk of a recession in the United States is elevated, he believes it’s still below 50%.

The stock selloff reflects the expected downturn in economic data in coming months. Financial conditions are also tightening, Hollenhorst said, which alone could lead to worsening economic data. But people are beginning to exercise social distancing and stay at home when they can. Market participants are carefully watching consumer behavior, the backbone of the US economy.

Spending on things like travel is likely to be substantially slower, Hollenhorst said, but as Americans stock up …continued .
[Original Source: CNN]