Opening Bell: Futures, Global Stocks Jump Despite Virus Fears; Oil Rebounds

Key Events

U.S. futures, including for the S&P 500, Dow Jones and NASDAQ, along with European shares all jumped this morning on reports of a drug breakthrough for the still-spreading coronavirus. Earlier, Asian markets produced another day of green moves even amid mixed earnings results from Wall Street, escalating virus reports and U.S. political drama.

Treasurys seem to have found their footing and oil rebounded from a fresh low. The U.S. dollar remained bid.

Global Financial Affairs

On Wednesday, contracts on the U.S. indices had a dramatic session. They dropped at first after U.S. department store retailer Macy’s (NYSE:M) announced last night they would be closing 125 stores over the next three years. However, futures reversed on the potentially positive coronavirus news.

After a weak open, the STOXX Europe 600 Index gained. A drop in household-goods and oil stocks during the earliest part of the session was offset by an advance in tech shares and construction firms.

Asia enjoyed a second straight positive day after yesterday's exuberant U.S. session. For the first time in two weeks, even though the viral spread continues, with global confirmed cases at about 25,000 and the number of deaths approaching 500, investors seem to have moved on, relying perhaps on stimulus from governments and central banks to continue supporting rising stock valuations.

Despite mixed geopolitical fundamentals, stocks on Wall Street surged yesterday, jumping the most since August.

The S&P 500 Index gained 1.5%, but the NASDAQ was the real outperformer: it jumped more than 2% and reached a new record high, as the sentiment pendulum shifted from a flight to safety to a rush for profit.

Yields, including for the benchmark 10-year Treasury, climbed for the fourth straight day, bouncing off the broken downtrend line since the November 2018 top, while the 50 DMA kept distancing itself to the bottom-side of the 200 DMA after rates plunged out of a rising channel.

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The USD received a boost as global central banks are increasingly suggesting a willingness to loosen policy .

The dollar, though well off its highs, kept a third day's gains, hitting resistance at the Jan. 29 high, as it travels within a rising channel since the Dec. 31 bottom, which took it out of the falling channel since the Oct. 1 high. Despite today’s retreat from session highs, the MACD’s short MA found support by its long MA.

Oil rebounded after falling for the tenth straight session, slipping below the key $50 level, to a one year low, even as Saudi Arabia—which is eager to deepen production cuts—and a cautious Russia are divided.

Up Ahead

• ISM Non-Manufacturing PMI data will be released later today in the U.S.
• The Reserve Bank of India’s interest rate decision is due out on Thursday.
• The U.S. nonfarm payrolls report for January is set for Friday release.

Market Moves

Stocks

• The Stoxx Europe 600 Index jumped 1.12%.
• Futures on the S&P 500 Index increased 0.72%.
• The Shanghai Composite gained almost 1.3%.
• The MSCI Asia Pacific Index increased 0.6%.

Currencies

Bonds

• The yield on 10-year Treasuries dipped two basis points to 1.58%.
• The yield on2-year Treasuries declined two basis points to 1.39%.
• Britain’s 10-year yield decreased one basis point to 0.558%.
• Germany’s 10-year yield fell one basis point to -0.41%.

Commodities

Written By: Investing.com