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As Bad as Rout Is, Most Investors See Recession as a Long Shot

  • Less than half of those surveyed anticipate that outcome
  • S&P 500 valuations show little fear over an earnings collapse
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Photographer: Johannes Eiselle/AFP via Getty Images

When $7 trillion is erased from stocks in 2 1/2 weeks, it’s safe to say investors are pricing in a lot of economic pain. One thing most of them are not yet bracing for, however, is a recession.

The view, drawn from a survey published by a Wall Street research firm on Friday, may sound fanciful, given the spread of the coronavirus and its rising threat to the global economy. But it’s not grossly out of line with price action so far in the S&P 500, which has fallen roughly as much as it did in its last six corrections. None of those episodes portended an economic contraction.