U.S. Futures Fall After Apple Warning; Bonds Gain: Markets Wrap

 

 

 

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index sank 0.5% as of 7:06 a.m. New York time.
• Futures on the S&P 500 Index declined 0.5%.
• The MSCI All-Country World Index declined 0.3%.
• The U.K.‘s FTSE 100 Index decreased 1%.

Currencies

• The Bloomberg Dollar Spot Index increased 0.1%.
• The euro declined 0.1% to $1.0824.
• The British pound climbed 0.2% to $1.3038.
• The Japanese yen appreciated 0.1% to 109.73 per dollar.

Bonds

• The yield on 10-year Treasuries declined four basis points to 1.54%.
• The yield on two-year Treasuries fell three basis points to 1.40%.
• Germany’s 10-year yield declined two basis points to -0.42%.
• Britain’s 10-year yield decreased three basis points to 0.613%.

Commodities

• West Texas Intermediate crude sank 1.8% to $51.11 a barrel.
• Gold strengthened 0.4% to $1,587.48 an ounce.

Here are some key events coming up:

• Earnings season rolls on, with results from Deere & Co. set for Friday.
• Minutes of the most recent Federal Reserve meeting are published on Wednesday.
• Indonesia is expected to cut interest rates on Thursday, following emerging-market peers that have already moved.
• Group of 20 finance ministers and central bank chiefs are scheduled to meet Feb. 22-23 in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the coronavirus threat.

U.S. equity-index futures fell along with European stocks on Tuesday after Apple Inc. said quarterly sales would miss forecasts, spooking investors who had hoped for a limited economic impact from the deadly coronavirus. Treasuries rose and the dollar edged higher.

Contracts on the three major U.S. equity benchmarks dropped, with Apple shares slumping as much as 4.2% in pre-market trading after the iPhone maker warned on both production and sales disruptions due to the epidemic. In Europe, tech companies were among the biggest laggards in the Stoxx 600 index as Apple suppliers including Dialog Semiconductor Plc and AMS AG slid. HSBC Plc tumbled the most in more than a decade after saying it will slash jobs in a “fundamental restructuring,” while also flagging risks due to the virus.

Equity benchmarks in Tokyo, Seoul and Hong Kong saw declines of over 1%, while stocks in Shanghai fluctuated. European bonds climbed, while the euro edged lower after a German investor-confidence index plunged. Crude oil retreated toward $51 a barrel in New York on concern the illness will cut fuel demand.

Corporate reports on Tuesday raised renewed concerns about the coronavirus impact, even as the growth rate of cases in China’s Hubei province — the epicenter of the disease — continues to stabilize. It’s a turnaround from Monday, when sentiment was lifted by Chinese policy makers’ moves to support companies hit by the prolonged shutdown of large parts of the country. BHP Group said commodity prices will take a hit if the fallout extends beyond the end of next month.

“Sentiment toward global risk turned sour today,” said Dariusz Kowalczyk, an emerging-markets strategist at Credit Agricole SA. “We continue to believe that markets have not yet fully priced in the magnitude of the hit to China’s economy as a result of the Covid-19 outbreak.”

Elsewhere, the Australian dollar weakened after the Reserve Bank of Australia said it reviewed the case for a further rate cut at its last meeting, but didn’t go ahead. Emerging-market stocks and currencies fell, led by South Africa’s rand.