Opening Bell: U.S. Futures, Global Stocks Rebound; USD, Gold Fall; Yen Rises

 | Feb 25, 2020 07:07

  • U.S. contracts and some Asian indices rise

  • Europe fails to rebound

  • Havens pare losses

    • h2 Key Events/h2

    Though U.S. index futures for the S&P 500, Dow Jones and NASDAQ all moved higher this morning, along with some Asian markets, European equities retreated on Tuesday, after initially attempting a rally. In the wake of yesterday's global rout—which erased this year’s gains for stocks—today's activity provides the impression that the worst, at least for markets, might be behind us.

    Potentially confirming that sentiment: gold and the dollar are lower, whereas oil bounced from its lows. Still, the yen strengthened, indicating that risk appetite hasn't necessarily returned.

    The truth is, one can't know what happens next. But for now, market mechanics indicate that the probability of a top has dramatically increased.

    h2 Global Financial Affairs/h2

    The major U.S. futures contracts have clawed back some of yesterday's losses, after Wall Street's worst selloff since February 2018, as buyers look for equity market 'bargains.'

    The STOXX Europe 600 Index, which initially rebounded, was unable to muster enough demand and is little changed, at the time of writing.

    Earlier, in Asia, Japanese markets opened after a holiday. Investors there, who might have thought they could escape Monday's equity devestation, were reminded that perhaps there's no place to hide right now, The Nikkei 225 crumbled, losing 3.34% of value. South Korea’s KOSPI outperformed, (+1.18%), after the previous day’s 4% plunge, which rendered that index undervalued.

    During Tuesday's U.S. session, stocks plunged. The S&P 500 Index experienced its worst drubbing in two years—all 11 sectors were in negative territory as the benchmark saw all its gains for the year wiped out, even after hitting a series of fresh records earlier in 2020. The big three major indices—the SPX, Dow and NASDAQ—were each sold off by more than 3%. The mega cap FAANG stocks underperformed, wiping out 4% of value.