Friday February 7th

7-02-2020

Dow set to drop more than 100 points, ending four-day winning streak

U.S. stock index futures fell on Friday, erasing some gains following a four-day winning streak on Wall Street, as investors awaited the release of the latest jobs data. Around 7:10 a.m. ET, Dow Jones futures fell 105 points, indicating a loss of 120 points at the open. S&P 500 and Nasdaq 100 futures also pointed to a weak start to Friday’s session. Economists polled by Dow Jones expect the U.S. economy added 158,000 jobs in January while the unemployment rate remained at 3.5%. The data is set for release at 8:30 a.m. ET. The recent rally in U.S. markets lost steam on Friday amid concerns about the potential economic fallout of China’s fast-spreading coronavirus. China’s National Health Commission on Friday confirmed 31,131 cases of the deadly pneumonia-like virus in the country, with 636 deaths. President Donald Trump tweeted Friday that his Chinese counterpart, President Xi Jinping, is “focused on leading the counterattack on the Coronavirus.” Stocks were up sharply for the week entering Friday as strong earnings and economic data outweighed worries over the coronavirus’ economic impact. The S&P 500 was up 3.7% week to date through Thursday’s close, and was on pace for its best weekly performance since early June. The Dow is up 4% for the week while the Nasdaq has gained 4.6%. The major averages also reached record highs on Thursday boosted by China’s decision to halve tariffs on a slew of U.S. products. The world’s second-largest economy announced it would halve tariffs on $75 billion worth of U.S. imports on Thursday. The move, which is set to take effect from Feb. 14, was made in order to “advance the healthy and stable development” of trade between the world’s two largest economies, according to a statement on China’s Ministry of Finance website. Asia Pacific markets mostly fell on Friday, following three sessions of broad gains, as China delayed the release of trade data for January. Mainland Chinese shares bucked the downward trend to bounce back slightly from declines earlier. The Shanghai composite rose 0.33% to close at 2,875.96. The Shenzhen component edged up slightly to 10,611.55, while the Shenzhen composite bounced 0.49% to 1,735.63. The indexes had fallen sharply on Monday when Chinese markets reopened, following the Lunar New Year break, before they attempted a slow recovery in subsequent sessions. In Hong Kong, the Hang Seng index dropped 0.50% in the afternoon. Japan’s Nikkei 225 reversed gains and declined 0.19% to 23,827.98, while the Topix was down 0.28% to 1,732.14. Elsewhere, South Korea’s Kospi dropped 1.02%. Oil prices edged down on Friday as Russia said it would need more time before committing to output cuts along with OPEC and other producers amid falling demand for crude as China battles the coronavirus epidemic. Brent crude futures fell 19 cents to $54.74 per barrel, and was heading for a fifth weekly loss due to lingering fears over the impact of the virus. U.S. West Texas Intermediate (WTI) crude futures fell 27 cents to $50.68 per barrel, also heading for a fifth consecutive week of losses. Gold inched up on Friday as a rally in global stock markets briefly stalled due to worries over the economic impact from the coronavirus, while investors awaited U.S. jobs data for indications on the country’s economic health. Spot gold was up 0.03% at $1,570.21 per ounce, but was down about 1.3% so far this week, its biggest weekly loss since early November. U.S. gold futures were also up 0.1% at $1,572.10 per ounce.