Friday February 21st

21-02-2020

Dow futures fall 90 points as confirmed coronavirus cases jump

U.S. stock index futures fell on Friday after the number of new coronavirus cases escalated, fueling worries over a pronounced global economic slowdown. Around 6:42 a.m. ET, Dow Jones Industrial Average futures were down about 90 points, indicating a decline of more than 120 points. S&P 500 and Nasdaq 100 futures also declined. China’s National Health Commission reported more than 75,00 confirmed cases and over 2,000 deaths on the mainland. More than 800 new cases were reported in China overnight. South Korea reported 52 new cases on Thursday to take its total to 150. “Even if the outbreak recedes, global growth is still set to fall to zero in the first quarter, before bouncing back over the remainder of the year,” Peter Berezin, chief global strategist at BCA Research, said in a note. “Thus, a near-term hit to corporate earnings now looks unavoidable.” The spread of the virus is already taking its toll on the Chinese economy. Data from the China Passenger Car Association showed auto sales plummeted by 92% in the first two weeks of February. Some U.S. companies, including Apple, have also warned this week about  U.S. stocks are coming off a negative session driven by a sudden midday sell-off which confounded traders and brought markets back from previous record highs. The Dow also notched its fourth decline in five sessions. “Markets had their first real ‘shot across the bow’ in a few weeks time, with a sudden swift pullback to multi-day lows, which was severe enough to cause some rapid buying of volatility,” said Mark Newton, managing member at Newton Advisors. “Yet breadth was never down that much even at the height of intraday losses, and ended up positive on the day.” Traders will also monitor February flash manufacturing and services PMI (Purchasing Managers’ Index) readings due at 9:45 a.m. ET on Friday, while January existing home sales figures are expected at 10 a.m. ET. Stocks in Asia were mixed on Friday as concerns lingered over the economic impact of the ongoing coronavirus outbreak. In mainland China, shares jumped on the day. The Shenzhen component was up 1.05% to 11,629.70 while the Shenzhen composite jumped 1.125% to 1,907.35. The Shanghai composite rose 0.31% to about 3,039.67. Elsewhere, stocks in South Korea led losses among major markets in the region, with the Kospi falling 1.49% to close at 2,162.84. Hong Kong’s Hang Seng index slipped 1.1% as of its final hour of trading. Over in Japan the Nikkei 225 closed 0.39% lower at 23,386.74. The Topix index ended its trading day largely flat at 1,674. Oil prices fell on Friday as a rise in new cases of coronavirus and weak Asian economic data fuelled uncertainty about the economic outlook and as major crude producers showed no rush to cut output. Brent crude was down $1.20, or 2%, at $58.11 a barrel, while U.S. crude dropped $1.02, or 1.9%, at $52.86 a barrel. Oil prices had edged up on Thursday after a much smaller-than-expected rise in U.S. crude stocks. Gold rose 1% on Friday to its highest in seven years as the spread of the coronavirus intensified concerns about its impact on economic activity and global growth, increasing the metal’s safe-haven appeal. Spot gold rose 0.9% to $1,633.46 per ounce, after hitting its highest since Feb.14, 2013 at $1,635.98 earlier in the session. U.S. gold futures jumped 1% to $1,636.40. Gold prices have risen 3% so far this week and are set to record their biggest weekly percentage gain since early August.