Wall Street's roller coaster week continues: March 13, 2020

Markets once again hit a circuit breaker. Enthusiasm has returned to Wall Street ... at least for Friday, and S&P 500 futures rebounded by more than 5%.

That is the maximum upward move, meaning futures are paused after hitting their "limit up". Traders will again fly blind until the market opens. The rebound could be much stronger than expected, or fizzle out before we know it.

This is the third time stocks have tripped circuit breakers this week. On Monday, futures hit their "limit down" overnight, meaning they couldn't fall more than around 5%. After the opening bell, the S&P 500 dropped 7%, triggering another circuit breaker that led the New York Stock Exchange to suspend trading for 15 minutes. The same thing happened on Thursday.

Wall Street entered a bear market yesterday, ending an 11-year bull market run.

It's looking like trading won't be halted again today after the opening bell rings because there are no circuit breakers when the market goes up.

It looks to be a good day for stocks after a brutal week of losses, but we shall see.

As of now, the S&P 500 is down more than 16% this week, on track for its worst week since October 2008.

The rapid spread of the coronavirus has economists scrambling to dim growth forecasts for the United States. 

Barclays is now assuming the number of coronavirus “hotspots” will expand to states that account for about 60% of US GDP. 

Under that scenario, the American economy will grind to a near-standstill, with growth slipping below 1% for the year. But Barclays thinks the economy could narrowly avoid a recession, with growth only going negative in one quarter. 

However, a recession would be unavoidable if the coronavirus spreads further, dealing a powerful blow to confidence and the availability of credit. 

In the firm’s worst-case scenario, Barclays says 2020 US GDP would hit zero. GDP would suffer consecutive declines during the second and third quarters “before staging a recovery.” 

The historic selling on Wall Street shows that investors are clearly bracing for this recession scenario, especially as parts of the US economy start to shut down. Countless flights are being canceled. Cruises are on hold. The NBA, NHL and MLB have suspended or postponed their seasons. Even Disney World is going dark.  

US stocks futures are rapidly rising as of 6:30 am ET:

European markets opened in positive territory on Friday.

Benchmark indexes in Germany, France and the United Kingdom gained more than 3% as regional stocks bounced back from their worst day in history on Thursday.

It's not clear what triggered the shift in sentiment. But there are a handful of promising signs from central banks and lawmakers that could be fueling hope.

He said that US lawmakers are expected to unveil a sweeping legislative package to address the economic fallout on Friday, something that might be calming investors' nerves. House Speaker Nancy Pelosi told reporters on Thursday that they were "close" to a deal.

Stephen Innes, global chief markets strategist at AxiCorp, wrote in a new note that the response Thursday from major policymakers — including the Federal Reserve, European Central Bank and the US government — had been insufficient at calming the markets.

The ECB, for example, said it would ramp up bond purchases to help support the economy. But it did not push interest rates deeper into negative territory, which some investors had been expecting.

European stocks suffered their worst day on record Thursday, with Stoxx 600 (SXXL) down 11%.

An extraordinary move by the New York Federal Reserve on Thursday to pump more than $1 trillion into the markets in the coming days, meanwhile, briefly improved the mood on Wall Street and lifted US stocks off their lows during an historic sell-off. But markets are still on track for their worst week since 2008.

Many now expect that the US central bank will further slash interest rates by next week's meeting, after announcing an emergency rate cut earlier this month. The slash by half a percentage point was the Fed's first emergency cut since the financial crisis.

Australia's S&P/ASX 200 recorded some of the most dramatic moves of the day.

After plunging more than 7% at one point, the index rallied late Friday to close 4.4% higher after the Reserve Bank of Australia said it would funnel 8.8 billion Australian dollars ($5.5 billion) into the lending market to help banks. It is still in a bear market, though, which is defined as a 20% drop from the most recent peak.

Japan's Nikkei 225 (N225), which entered a bear market Thursday, closed down 6%, its lowest close since November 2016. But even that was significant better than earlier, when it was on pace to record its biggest point decline since the country's economic bubble burst 30 years ago.

The slight improvement seemed to come after Japan's economic minister signaled a "big" spending package is in the works, according to Reuters.

South Korea also recovered somewhat: Markets in Seoul were hammered in morning trade, leading the Korea Exchange to temporarily suspend trading.

The benchmark Kospi (KOSPI) was down 7% at one point. The index ended down 3.4%, not enough to keep it from entering a bear market.

Hong Kong's Hang Seng Index (HSI) also eased off its lows, but it closed down 1.1% and entered a bear market. China's Shanghai Composite (SHCOMP) ended 1.2% lower.