My Greek immigrant grandfather would teach me Greek words when I was a kid. One of those words seems appropriate to describe the investing universe nowadays: chaos.

Chaos is from the ancient Greek word khaos that means the void state that gave birth to the cosmos. So from that perspective, chaos is not about disorder. It is about possibilities.

The economy and financial markets appear to be in chaos, especially the oil patch, as the coronavirus takes its toll. And yet, as I explain below, investors looking for ways to profit can still find possibilities.

That said, market volatility has been daunting. Yesterday’s rout in stocks was global in scope. The Dow Jones Industrial Average fell 2.67%, the S&P 500 lost 3.07%, and the tech-heavy NASDAQ Composite dropped 3.48%. The pan-European STOXX 600 index lost 3.39% and MSCI’s gauge of stocks across the globe shed 3.02%. Emerging market stocks lost 2.40%.

Among the worst performers on Tuesday were large-cap technology stocks, as first-quarter earnings results from tech sector bellwethers such as International Business Machines (NYSE: IBM) disappointed.

The U.S. government is stepping up to the plate with more stimulus. The Senate today sent a $484 billion package of new pandemic relief funds to the House for almost certain approval Thursday. The bill provides substantial relief for struggling small businesses.

As of this writing on Wednesday morning, the three main U.S. stock market indices were trading sharply higher, as the new stimulus package and recovering oil prices cheered investors. But any rallies at this point are likely to be short-lived, as earnings and economic numbers continue to paint a grim picture.

A joyless spring…

Housing-related stocks are under pressure, in the wake of negative data for the sector. The National Association of Realtors (NAR) reported Tuesday that U.S. home sales in March fell by the most in nearly 4-1/2 years, as social distancing policies put in place to counteract the coronavirus brought the housing market to a grinding halt.

Existing home sales plunged 8.5% to a seasonally adjusted annual rate of 5.27 million units in March, the largest percentage decline since November 2015. The number was worse than the consensus expectations of an 8.1% decline (see chart).

Making matters worse, the data included contracts from January and February, before quarantines and lockdowns took effect. That means the second quarter is probably on track for even worse deterioration. Spring is usually when the housing market picks up, but this year the season won’t bring much joy. Home sales fell last month in all four regions of the country.

Before the coronavirus struck, home sales in February were in expansion mode. However, since March 22, at least 22 million people have filed for unemployment benefits, the fastest job losses since the Great Depression of the 1930s.

A home is still the biggest asset of most Americans and remains integral to consumer confidence. When the real estate market prospers and unemployment is low, people feel wealthier. Instrumental in generating a “wealth effect” among Americans has been the steady rise in home prices since their collapse during the Great Recession of 2008-2009. But the wealth effect has been dealt a killer blow by the coronavirus.

The implosion in March of the housing market is making investors nervous, because of the ripple effect throughout the economy and financial markets. The collapse of the energy sector is another cause for concern.

Less than zero…

The oil industry always has been subject to cyclical booms and busts. However, the current bust is truly epic.

Monday’s historic crash in West Texas Intermediate (WTI) crude futures witnessed the front-month May contract, which expired Tuesday, settling at -$37.63 per barrel as traders faced a shortage of storage space and buyers shied away from taking delivery of barrels.

Monday marked the first time in history that WTI crude futures had fallen below $0. The global oil glut and virus-induced economic downturn are creating unprecedented turmoil in the energy sector.

Read This Story: Can The Economy Get Back On Its Feet?

Oil prices rebounded somewhat on Tuesday, as the per-barrel price of oil clawed its way back into the black. But volatility continues. U.S. benchmark WTI fell 43.4% yesterday, to settle at $11.57 per barrel. Brent North Sea crude, on which international oils are based, fell 24.4% to settle at $19.33/bbl.

The energy sector is bracing for a wave of bankruptcies, which in turn will exacerbate unemployment. The U.S. oil and gas industry is now lobbying Uncle Sam for a bailout.

The free fall in oil prices has dragged down the financial value of the entire fossil fuel industry. Year to date (as of market close April 21), the benchmark SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has fallen by a staggering 52.3%, compared to a decline of 12% for the SPDR S&P 500 ETF Trust (SPY).

Oil prices are a gauge of economic health and it’s undeniably clear that we’re in a recession. The only uncertainty is the severity of the downturn. Analysts predict that the headline unemployment rate could reach 10% this summer. Economists are forecasting that U.S. GDP will plunge by 40% through the spring months.

Key economic data scheduled for release later this week include the April preliminary Purchasing Manager Indices (PMIs) for manufacturing and services (Thursday); weekly jobless claims (Thursday); and consumer sentiment (Friday). Brace yourself for horrific numbers.

During these tough times for the stock market, bonds should experience renewed demand and temporarily outperform stocks as the world seeks to get past the pandemic and return to stability.

As for stocks, investors with discretionary money to invest should consider sectors appropriate for recessionary conditions, such as utilities, consumer staples, and health services. History shows that those sectors tend to perform comparatively better during recessions.

You should also increase your exposure to gold. For the best gold play now, click here for our special report. The yellow metal prospers, when the world descends into chaos.

Questions or comments about crisis investing? Drop me a line: mailbag@investingdaily.com

John Persinos is the editorial director of Investing Daily.