China has a cold, and the whole world is sneezing. Dow futures have sunk rapidly this morning, and world markets have been hit with selloffs as the global economy takes a dive. Bloomberg picks up the wave in Europe, and the “panic” seen in the US today:

A wave of selling gripped global markets as the rout in all but the safest assets deepened.

Chinese shares tumbled by the most since 2007, stocks in Germany headed for a bear market and commodities fell to a 16-year low. Russia’s ruble led a selloff in emerging-market currencies, while the yen strengthened and 10-year Treasury yields slid below 2 percent for the first time since April. Futures signaled U.S. equities will retreat for a fifth day.

“Everyone seems to be selling off, and there’s panic,” said Michael Woischneck who helps oversee the equivalent of $7.1 billion at Lampe Asset Management GmbH in Dusseldorf, Germany. “There’s no rational choice anymore, no rational reaction. The Americans will add to the European selling.”

In fact, that seems to be exactly what the Americans are doing. NBC reports a sharp drop in futures pricing this morning, signaling a bad day and probably a bad week at the least for Wall Street:

Stock futures plunged Monday in the United States, all but guaranteeing that the market will extend its sell-off after suffering the worst week in four years. The Dow Jones industrial average could be headed for a 500-point decline.

Overseas markets were pummeled. The Nikkei index in Japan was down 4.6 percent, the equivalent of a 750-point drop in the Dow. Stocks were down 8 percent in Shanghai and 3 percent in London, Paris and Frankfurt.

“It is going to be a bad day,” CNBC’s Jim Cramer said on TODAY. “It’s probably going to be a bad week.”

Stocks took a beating on Friday, thanks to turmoil from China. The Dow has dropped 10% since May, qualifying this as a “correction,” the first one in four years. Cramer doesn’t think we’re in for a crash, thanks to a strengthened economy and a lack of interest rate problems, but it’s probably not going to be pleasant in the short term. This phase of the correction could bring another 7%-12% drop in valuation, which could make a quick rebound more difficult.

The Financial Times paints a bleak picture of the situation at its origin in China. Beijing is trying to prop up both its currency and its equities, which is going to prove impossible, one of their analysts predict. Another, however, blames the Fed for attempting to move off of zero on interest rates:

Meanwhile, Bloomberg’s panel says to keep an eye out for bargain hunters. Christopher Marangi says this is just an overdue “mean correction,” and that wise investors will start finding good deals among the damage:

Marangi discusses “natural stabilizers” whose bargain hunting will blunt the impact of the damage, but they will probably be fairly insular. They will look for companies with less exposure to emerging markets, Marangi says, which means that investors will seek out those who have acted with caution in their own investments — not a big surprise, but something to watch when the correction plays itself out. Those emerging markets may not attract as much attention in the future.

Update: It’s going to be a fun week:

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Update: The Dow fell over 1,000 points in the first three minutes of trading, but it’s now back up to just -313 points at 10:27 ET.