Economist Mohamed El-Erian told CNBC on Friday he expects trading on Wall Street to remain "choppy" but suggested that he may be starting to see light at the end of what has been a dark week on Wall Street.
The chief economic advisor at Allianz said on "Squawk Box" he's less certain on the direction of the market than he had been throughout the coronavirus crisis.
Dow futures, reversing overnight losses, were pointing to a nearly 1,000-point advance at Friday's open after Wall Street suffered its worst session since the "Black Monday" stock market crash in 1987. The futures hit "limit up," meaning they can't trade higher than a 5% gain during the premarket.
El-Erian said that while individual investors should remain cautious — a theme he's been driving home since early last month — the market is looking "less scary."
The Dow Jones Industrial Average's indicated gain would only make up less than half of Thursday's over 2,350 points or nearly 10% loss, which pushed blue chips further into a bear market. The Dow is down more than 28% from its mid-February closing high as of Thursday's close. The S&P 500 tanked 9.5% on Thursday, joining the Dow in a bear market and officially ending the longest bull market ever. Since last month's record, the index lost nearly 27%. A bear market is defined by a decline of at least 20% from recent highs.
Before the opening bell Thursday, El-Erian predicted the U.S. stock market may drop 30% from last month's records before finding a bottom.
El-Erian said Friday he did take some solace in what he described as Federal Reserve policymakers and government officials waking up to the magnitude of potential economic damage that the virus is causing in the U.S. and around the world.
He did caution, however, that "we have to get used to the fact that we're going into a global recession."
On Thursday, the Fed said it would take a series of moves to add up to $1.5 trillion into the financial system.
Goldman Sachs expects central bankers to cut interest rates a full 1% at their latest meeting next week. Such a move would take the key fed funds overnight lending rate to a financial crisis low range of 0%-0.25%. Near-zero rates began in December 2008 and remained there for seven years.