Tuesday February 6th


US stock futures point to a third day of big losses, global markets plunge

U.S. stock index futures pared significant losses ahead of Tuesday's open, but still pointed to a sharply negative open as the sell-off continues to weigh on sentiment worldwide. During Monday's late hours, Dow futures were down 826 points, and S&P 500 futures were lower by 76.5 points as of 11:25 p.m. ET, indicating that the implied open for the Dow, based on futures, was a decline of 1,203.75.  Around 7:25 a.m. ET, Dow futures were indicating a roughly 540 point drop at the open, S&P 500 futures suggested a decline of 50 points and Nasdaq futures indicated a 99-point drop. The Cboe Volatility index — widely considered the best fear gauge on Wall Street — surged to 49.21. Global markets also fell sharply. The German Dax dropped 2.1 percent, while the French CAC 40 fell 2.4 percent. In Asia, the Japanese Nikkei 225 plunged 4.7 percent, while the Shanghai composite pulled back 3.4 percent. Across the Korean Strait, the Kospi declined 1.54 percent to close at 2,453.31. The Hang Seng Index was down 4.39 percent by 3:31 p.m. HK/SIN as stocks sold off across sectors. On Monday, the Dow Jones industrial average dropped 1,175.21 points to close down at 24,345.75 — having briefly declined more than 1,500 points during the session; with other major indexes closing sharply lower. The sell-off kicked into action on Friday, after the latest nonfarm payrolls report saw interest rates in the U.S. jump. While there was no particular piece of news that pushed major U.S. indexes deep into the red on Monday, the recent moves in the bond market have added volatility and concern to the market. Consequently, investors are paying close attention to not only the bond market, but how the U.S. Federal Reserve will react to this, as Jerome Powell takes on the position as chair of the U.S. central bank. Also on Tuesday, data and earnings are set to keep investors' somewhat busy as the sell-off continues to simmer. Looking to data, the U.S. international trade in goods and services is due out at 8:30 a.m. ET, followed by the Job Openings and Labor Turnover Survey (JOLTS), set to come out at 10 a.m. ET. Elsewhere, the yield on the benchmark 10-year Treasury note was lower at around 2.694 percent, while the yield on the 30-year Treasury bond was lower at 2.99 percent. Bond yields move inversely to prices. Oil prices and bitcoin futures came under pressure as the global sell-off continued to drag on sentiment. Oil fell for a third day on Tuesday, as a rout in global equities triggered losses across bonds, cryptocurrencies and commodities, although the crude price is in positive territory so far this year. Even with Wall Street stocks posting their largest one-day fall since late 2011 on Monday and measures of volatility spiking to multi-year highs, reflecting heightened investor nervousness, oil has not suffered to the same extent. Brent crude futures were down 35 cents on the day at $67.27 a barrel by 0921 GMT, still up 1 percent so far in 2018. U.S. West Texas Intermediate (WTI) crude futures eased by 25 cents to $63.90. Gold prices edged lower on Tuesday, eschewing a larger safe-haven boost from tumbling equity markets because the global economy is largely robust and shares were thought likely to rebound. World stock markets nosedived for a fourth day running on Tuesday, with $4 trillion wiped off since indexes hit record highs eight days ago. Gold is seen as a safe-haven investment due to its ability to retain value even at times of financial or political uncertainty. It is also used as a hedge against inflation. But spot gold was down 0.35 percent at $1,334.51 per ounce at 8:16 a.m. EST, undercutting Monday's 0.5 percent gain. U.S. gold futures for April delivery rose 0.1 percent to $1,337.90 per ounce on Tuesday.