Search

'This is different' — El-Erian warns against buying coronavirus pullback fears in stock market - CNBC

Economist Mohamed El-Erian told CNBC on Tuesday that investors should hold off on buying equities that were hit hard in the latest coronavirus-driven plunge.

"I stress, this is different," the Allianz chief economic advisor said in a "Squawk Box" interview, a day after the Dow Jones Industrial Average plunged over 1,000 points or 3.5%, in its worst single-session in more than two years.

Just because buying market dips has worked in the past does not mean it's going to work this time, he said. "I would continue to resist, as hard as it is, to simply buy the dip."

Disruptions to corporate earnings and economic growth from "shock" events such as the coronavirus tend to stick around longer than more fundamental downturns, said El-Erian.

"We're going to have a lot of risk-aversion on the part of economic actors. It's going to take time," he said. "Economic sudden stops are hard to restart."

The World Health Organization on Tuesday countries around the world to ready for the coronavirus to come "knocking at the door."

On Feb. 3, El-Erian first warned investors not to buy market drops as they might have in the past. He said at the time that the coronavirus is going to "paralyze China," adding that it will "cascade throughout the global economy."

That's exactly what's happening.

The spike of coronavirus cases beyond China, specifically in South Korea and Italy, sparked concerns about a prolonged global slowdown due to the outbreak and erased $1.7 trillion in global stock market values Monday.

U.S. stock futures were pointing to about a 100-point higher Tuesday open on Wall Street for the Dow.

Let's block ads! (Why?)



Business - Latest - Google News
February 25, 2020 at 07:13PM
https://ift.tt/2HXWUsA

'This is different' — El-Erian warns against buying coronavirus pullback fears in stock market - CNBC
Business - Latest - Google News
https://ift.tt/2Rx7A4Y

Bagikan Berita Ini

0 Response to "'This is different' — El-Erian warns against buying coronavirus pullback fears in stock market - CNBC"

Post a Comment

Powered by Blogger.