Opening Bell: U.S. Futures, Global Stocks, Oil, Yields Plunge On Virus Fears
Investing.com | Jan 23, 2020 07:25
- Steps by China to limit virus spread underscore risks
- Oil and yields trigger bearish technical signals
- The Shanghai Composite had its worst day on record
Shares in Asia dropped this morning, U.S. futures, including for the S&P 500, Dow Jones and NASDAQ, languished and European stocks extended a selloff, as fears triggered by the coronavirus outbreak returned, notwithstanding steps taken by China to stop the spread of the sometimes lethal illness.
China’s move to stop movement in and out of Wuhan, where the pneumonia-like virus originated, hasn't served to fully allay investor concerns. Some see this as a headwind that, if it spreads, could undermine what many believed was finally a bottom to the global economic slowdown.
Oil and yields plunged.
h2 Global Financial Affairs/h2S&P 500 futures have been fluctuating today; at time of writing they're marginally higher.
However, investors should watch the levels attained during the last five sessions. They might be getting ready to complete a bullish flag, with an upside breakout.
The STOXX Europe 600 Index dropped, pressured by mining companies. The possible spread of the virus also underscores the risk to retail shares and airline companies.
Earlier Thursday, China’s Shanghai Composite underperformed, (-2.75%), as investors desperately unwound positions at any price during the final trading day before the week-long Lunar New Year holiday. It was the worst selloff for the index since it was created 30 years ago.
Conversely, this morning, the most recent signal that a global economic recovery might be underway was a positive Australian employment report. The release pushed the AUD to outperform among the major currencies.
Technically, the Aussie bounced off the bottom of a rising channel, moving back above what might still prove to be the neckline of a H&S, as the 200 DMA kept the Australian dollar at bay.
Get The App
Investors eagerly latched on to Treasurys, pushing yields, including for the U.S. 10-year note, down for the third straight day, to the lowest since Dec. 3, below the bottom of its rising channel since the Sept. 3 bottom.
The USD/JPY pair has been falling for the third day in a row, testing the support of highs since Nov 7.
Fear that the virus will impact economc growth exacerbated concerns of an oversupplied crude market. Additional oil market risks have also begun to surface.
Technically, the price of WTI completed a bearish flag when it fell below the uptrend line since Oct. 3 and the 200 DMA.
h2 Up Ahead/h2- Companies including Intel (NASDAQ:INTC), Procter & Gamble (NYSE:PG) and American Airlines Group (NASDAQ:AAL) report earnings today.
- The European Central Bank will release a policy decision later Thursday.
- The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.
- The Stoxx Europe 600 Index dipped 0.4%.
- Futures on the S&P 500 Index were little changed.
- Germany’s DAX dipped 0.5%.
- The Shanghai Composite Index sank 2.8%.
- The MSCI Asia Pacific Index decreased 0.7%.
- The yield on 10-year Treasuries fell three basis points to 1.74%.
- Germany’s 10-year yield dipped two basis points to -0.28%.
- Britain’s 10-year yield fell two basis points to 0.614%.
- Italy’s 10-year yield decreased six basis points to 1.287%.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.