Wednesday, January 19

Stocks and futures slide through the anguish of the virus; dollar earnings: markets close


Global stocks fell for a second day and US stock index futures tumbled amid concerns that more economic closings will be needed to contain a fast-spreading pandemic.

A stronger dollar and a drop in Treasury yields underscored the risky mood on Tuesday when New Zealand discovered a positive case and announced a closure. Gold was up for the fifth day and oil was down. Contracts on the S&P 500 and Nasdaq 100 indicators lost 0.5% each.

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Investor sentiment is hurt by concerns that the economic impact of the pandemic will persist, compounding the risks posed by declining stimulus from the Federal Reserve, China’s regulatory restrictions and travel restrictions. The next signal on monetary policy is likely to come later Tuesday when Fed Chairman Jerome Powell speaks at a town hall.

This week’s market turns “are in addition to eight consecutive weeks of Covid cases on the rise globally that raise the possibility of further deterioration in outlook over the coming weeks and months,” wrote strategists at Deutsche Bank AG, including Karthik Nagalingam, on a note.

European stocks headed for their worst two-day losses in four weeks and retail stocks posted the worst decline among industry groups. Other stocks closely linked to economic activity, such as travel, cars and real estate, also fell.

Chinese tech stocks tumbled again, this time after a regulator published draft rules prohibiting unfair competition among China’s online platform operators. In New Zealand, officials said they are investigating a Covid-19 case, which caused a drop in currency and bond yields. The Australian dollar slid after the central bank indicated it is ready to act if the locks charge a higher economic price.

Treasury bond yields declined, with the 10-year rate shedding four basis points and trading below 1.23%. Powell’s city council may act as a precursor to the Jackson Hole symposium in late August, where some investors await an announcement on the phase-down.

Here are some events to watch this week:

  • US Fed Chairman Powell Hosts Town Hall Debate with Educators Tuesday
  • China’s highest legislative body, the Standing Committee of the National People’s Congress, begins a four-day meeting in Beijing on Tuesday.
  • US Retail Sales Expires Tuesday
  • The minutes of the Reserve Bank of Australia are scheduled to be released on Tuesday.
  • Reserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr on Wednesday
  • FOMC Minutes Released Wednesday
  • Bank of Indonesia interest rate decision and Governor Perry Warjiyo briefing on Thursday

Some of the main movements in the markets:

Stocks

  • The Stoxx Europe 600 fell 0.3% at 8:38 am London time.
  • S&P 500 futures fell 0.5%
  • Nasdaq 100 futures fell 0.4%
  • Dow Jones Industrial Average futures fell 0.5%
  • The MSCI Asia Pacific Index fell 1.1%
  • The MSCI emerging markets index fell 1.3%

Currencies

  • Bloomberg’s dollar spot index rose 0.2%
  • The euro changed little to $ 1.1770
  • The Japanese yen was unchanged at 109.24 per dollar.
  • The offshore yuan fell 0.2% to 6.4860 to the dollar.
  • The British pound fell 0.3% to $ 1.3811.

Captivity

  • The 10-year Treasury yield fell four basis points to 1.23%.
  • Germany’s 10-year yield fell two basis points to -0.49%.
  • The UK 10-year yield fell two basis points to 0.56%.

Raw Materials

  • Brent crude fell 0.7% to $ 69.01 a barrel
  • Spot gold rose 0.4% to $ 1,793.86 an ounce

© 2021 Bloomberg


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