Stocks Slip, Bonds Gain on Virus Fears; Oil Slides: Markets Wrap

 

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index declined 0.2% as of 6:29 a.m. New York time.
• Futures on the S&P 500 Index were little changed.
• Germany’s DAX Index declined 0.3%.
• The Shanghai Composite Index closed down 2.8%.
• The MSCI Asia Pacific Index decreased 0.7%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The British pound fell 0.1% to $1.3124.
• The euro was little changed at $1.1094.
• The Japanese yen strengthened 0.2% to 109.60 per dollar.
• The offshore yuan weakened 0.3% to 6.9287 per dollar.

Bonds

• The yield on 10-year Treasuries fell two basis points to 1.74%.
• Germany’s 10-year yield dipped two basis points to -0.28%.
• Britain’s 10-year yield declined two basis points to 0.618%.
• Italy’s 10-year yield decreased six basis points to 1.29%.

Commodities

• The Bloomberg Commodity Index declined 0.4% to 78.40.
• Gold weakened 0.3% to $1,554.51 an ounce.
• West Texas Intermediate crude fell 1.6% to $55.84 a barrel

Here are some events to watch out for this week:

• Companies including Intel Corp. and Procter & Gamble Co. will post results.
• The European Central Bank will release its policy decision later on Thursday.
• Eurozone PMI data is due Friday.
• The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.

U.S. equity futures fluctuated while European stocks edged lower and Asian shares slumped on Thursday amid lingering concerns that a virus spreading from China to other countries could become a drag on global growth. Treasuries climbed and crude oil fell.

Contracts on America’s three main equity indexes swung between modest gains and losses. Western Digital Corp. and General Electric Co. rose in the premarket after both were raised to overweight by Morgan Stanley. Mining shares led the Stoxx Europe 600 Index lower. Asian stocks slid from Seoul to Sydney on worries the deadly pathogen will affect corporate sales and economies. China’s Shanghai Composite Index plunged 2.8%, the biggest drop on the last trading day before the Lunar New Year holiday in the benchmark’s three-decade history.

WTI-grade crude oil dropped to its lowest level since early December. European bonds gained across the board, while the euro was range-bound before the region’s central bank announces a policy decision later on Thursday. ECB President Christine Lagarde will speak to the press afterwards.

Investors are still trying to gauge the threat to airlines, retailers and energy providers from a sickness that’s killed 17 so far and spread through Asia from Thailand to South Korea. The U.S. has one confirmed case. The risk, which stirs memories of the SARS outbreak 17 years ago, is emerging just as evidence mounts that the global economy turned a corner. Strong Australian job numbers Thursday were the latest sign; the country’s currency outperformed global peers.

“There is a notable degree of investor caution, albeit not (yet) risk capitulation across markets,” Simon Ballard, chief economist at First Abu Dhabi Bank, wrote in a note. “Until the data tells us otherwise, we will hope that the coronavirus does not become a repeat of 2003 and that any meaningful sell off in risk will be viewed by investors as a (selective) buying opportunity.”

 

Source: Bloomberg News