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Stocks, Yields Slide on Worries Over Virus Impact: Markets Wrap
(Bloomberg) -- U.S. and European equity futures slumped and Asian stocks tumbled to a seven-week low amid mounting evidence that the coronavirus epidemic is disrupting the world’s second-largest economy. Sovereign bonds rallied.A slew of companies have suspended some of their China operations for the time being in the effort to contain the disease, and economists have started cutting growth forecasts. Hong Kong shares slid more than 2%, and Japan, Korea and Australia saw losses. Taiwan tumbled over 5% as that market came back from a holiday. Treasury yields added to declines, with the 10-year yield at the lowest since October. The yuan weakened closer to 7 per dollar offshore.Foxconn’s Hon Hai Precision Industry Co. -- which makes most of the world’s iPhones, and has major facilities in China -- plunged as much as 10%. Japanese 10-year bond yields hit their lowest level since December and Australian rates slid below 1%.With the death toll from the coronavirus rising to 170 and the number of cases continuing to increase, investors are cautious as the World Health Organization called a meeting of its Emergency Committee for later Thursday. Federal Reserve Chairman Jerome Powell said the outbreak of the coronavirus will likely hit the Chinese economy and could spill wider, but it was too early to assess its impact on the U.S.“If things go wrong, whether earnings disappoint or the coronavirus causes a short or a long-term problem for the economy, there is not a lot of buffer in asset prices to absorb that,” said Simon Doyle, head of fixed income and multi-asset at Schroders in Sydney. “Clearly there will be a growth shock as people stop traveling, but we don’t know exactly how that will play out. From a market perspective, the lack of a risk premium does make markets vulnerable if it’s worse than people hope it is.”Powell also said he wasn’t satisfied with inflation running persistently below 2%, after he and his colleagues kept Fed policy on hold Wednesday.Meantime, investors continue to assess the earnings outlook -- positive results from Microsoft Corp. and Tesla Inc. overshadowed an underwhelming report from Facebook Inc.Here are some events to watch out for this week:International Paper, Unilever and Shell report on Thursday, followed by South Korean chipmaker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.The U.S. reports fourth-quarter GDP Thursday.The U.K. is scheduled to leave the European Union Friday.These are some of the main moves in markets:StocksFutures on the S&P 500 Index dropped 0.6%.Euro Stoxx 50 futures fell 0.8%.Japan’s Topix index slid 1.5% at the close.Hong Kong’s Hang Seng lost 2.4%.Australia’s S&P/ASX 200 Index declined 0.3%.South Korea’s Kospi index slid 2%.The MSCI Asia Pacific Index retreated 1.7%, on track for its biggest drop since August.CurrenciesThe yen was at 108.89 per dollar, up 0.1%.The offshore yuan retreated 0.3% to 6.9934 per dollar.The euro was little changed at $1.1013.BondsThe yield on 10-year Treasuries lost about two basis points to 1.57%.Australia’s 10-year yield fell five basis points to 0.96%.CommoditiesWest Texas Intermediate crude fell 1.2% to $52.7 a barrel.Gold ticked up 0.2% to $1,579.1 an ounce.To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net;Andreea Papuc in Sydney at apapuc1@bloomberg.netTo contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
https://finance.yahoo.com/news/asia-stock-futures-slip-u-214250162.html?.tsrc=rss
(Bloomberg) -- U.S. and European equity futures slumped and Asian stocks tumbled to a seven-week low amid mounting evidence that the coronavirus epidemic is disrupting the world’s second-largest economy. Sovereign bonds rallied.A slew of companies have suspended some of their China operations for the time being in the effort to contain the disease, and economists have started cutting growth forecasts. Hong Kong shares slid more than 2%, and Japan, Korea and Australia saw losses. Taiwan tumbled over 5% as that market came back from a holiday. Treasury yields added to declines, with the 10-year yield at the lowest since October. The yuan weakened closer to 7 per dollar offshore.Foxconn’s Hon Hai Precision Industry Co. -- which makes most of the world’s iPhones, and has major facilities in China -- plunged as much as 10%. Japanese 10-year bond yields hit their lowest level since December and Australian rates slid below 1%.With the death toll from the coronavirus rising to 170 and the number of cases continuing to increase, investors are cautious as the World Health Organization called a meeting of its Emergency Committee for later Thursday. Federal Reserve Chairman Jerome Powell said the outbreak of the coronavirus will likely hit the Chinese economy and could spill wider, but it was too early to assess its impact on the U.S.“If things go wrong, whether earnings disappoint or the coronavirus causes a short or a long-term problem for the economy, there is not a lot of buffer in asset prices to absorb that,” said Simon Doyle, head of fixed income and multi-asset at Schroders in Sydney. “Clearly there will be a growth shock as people stop traveling, but we don’t know exactly how that will play out. From a market perspective, the lack of a risk premium does make markets vulnerable if it’s worse than people hope it is.”Powell also said he wasn’t satisfied with inflation running persistently below 2%, after he and his colleagues kept Fed policy on hold Wednesday.Meantime, investors continue to assess the earnings outlook -- positive results from Microsoft Corp. and Tesla Inc. overshadowed an underwhelming report from Facebook Inc.Here are some events to watch out for this week:International Paper, Unilever and Shell report on Thursday, followed by South Korean chipmaker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.The U.S. reports fourth-quarter GDP Thursday.The U.K. is scheduled to leave the European Union Friday.These are some of the main moves in markets:StocksFutures on the S&P 500 Index dropped 0.6%.Euro Stoxx 50 futures fell 0.8%.Japan’s Topix index slid 1.5% at the close.Hong Kong’s Hang Seng lost 2.4%.Australia’s S&P/ASX 200 Index declined 0.3%.South Korea’s Kospi index slid 2%.The MSCI Asia Pacific Index retreated 1.7%, on track for its biggest drop since August.CurrenciesThe yen was at 108.89 per dollar, up 0.1%.The offshore yuan retreated 0.3% to 6.9934 per dollar.The euro was little changed at $1.1013.BondsThe yield on 10-year Treasuries lost about two basis points to 1.57%.Australia’s 10-year yield fell five basis points to 0.96%.CommoditiesWest Texas Intermediate crude fell 1.2% to $52.7 a barrel.Gold ticked up 0.2% to $1,579.1 an ounce.To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net;Andreea Papuc in Sydney at apapuc1@bloomberg.netTo contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
https://finance.yahoo.com/news/asia-stock-futures-slip-u-214250162.html?.tsrc=rss
