The Coronavirus Recession Will Be Worse Than 2008

  • Seventy percent of investors in a recent survey said the coronavirus recession would be worse than the 2008 financial crisis.
  • But interestingly, 55% say the recession will be over within a year.
  • It took the S&P 500 16 months just to reach bottom during the 2008-09 crisis. And it took over five years to fully recover.

The U.S. stock market bounce-back from the coronavirus crash has stalled over the last two weeks.

After share prices crashed faster than any time in history starting in late February, equities began to rally the last week in March. While benchmarks like the Dow Jones and S&P 500 opened higher Thursday morning, stocks are trading around the same level as they were two weeks ago on Apr 9. But investors are still licking their chops for opportunities.

A new survey by Investing.com of around 1,700 U.S.-based investors found nearly 80% believe the coronavirus market downturn is an opportunity to invest.

Some key findings from the survey:

  • 77% of investors believe coronavirus is an opportunity to invest.
  • Nearly 70% are holding their investments during this bear market.
  • But 81% of respondents think we’re heading for a global recession.
  • And over 70% believe it will be worse than in 2008.
  • Still, 55% expect a full recovery within a year.
  • Further, 32% said we’ll recover before the end of 2020.

These are all very bearish responses. They indicate investors believe the coronavirus market crash isn’t over.

Why Investors Believe Coronavirus Is Worse Than 2008

Why do investors see a more devastating economic downturn than 2008 ahead?

The higher job losses in a shorter period are the reason given in the report on the new survey. Jesse Cohen, senior markets analyst at Investing.com, said:

The coronavirus crisis has already cost the U.S. economy 22 million jobs and counting, far dwarfing the total number of jobs lost during the 2008 financial crisis.

Thursday morning, the latest Labor Department figures brought that total up to 26 million job losses due to…

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