Monday February 10th

10-02-2020

Stock futures point to flat open as coronavirus fears linger

U.S. stock index futures were little changed on Monday as investors assess the economic impact of the coronavirus outbreak in China. Around 7:15 a.m. ET, Dow Jones Industrial Average futures were down 19 points, indicating a loss of about 30 points at the open. S&P 500 and Nasdaq 100 futures also traded along the flatline. As of Sunday night, China said a total of 40,171 cases of coronavirus had been confirmed and 908 people had died, while 14 Americans have tested positive for the virus aboard a cruise ship quarantined in Japan. The death toll from the coronavirus has also overtaken that of the SARS outbreak in the early 2000s. Futures did pair earlier losses, however, after Chinese President Xi Jinping said China would speed up development of drugs aimed at treating pneumonia-like viruses. Xi also said China will win the fight against the coronavirus. The major averages are coming off their first loss in five sessions, with the Dow falling more than 200 points on Friday. Mounting concerns over how China’s economy, the second-largest in the world, pressured stocks. Despite Friday’s losses, however, Wall Street logged in its biggest weekly gain since June as the S&P 500 jumped 3.2%. Strong economic data along with solid corporate earnings reports fueled the market’s weekly surge. “Stock market investors are torn between fear that the coronavirus might continue to spread, weighing on global economic growth, and optimism given that the latest batch of global economic indicators is showing rebounding global growth,” said Ed Yardeni, president and chief investment strategist at Yardeni Research, in a note. Monthly U.S. employment data released Friday showed more than 200,000 jobs were created in January. The Institute for Supply Management said last week manufacturing activity rebounded in the U.S. last month while growth in the services sector picked up. Shares in mainland China rose on Monday as investors monitored the ongoing virus outbreak’s impact on Chinese manufacturers. Factories in China were set to return to work on Monday, but many are expected to remain shut for longer. Mainland Chinese stocks recovered from their earlier slip to gain on the day, with the Shanghai composite up 0.51% to about 2,890.49 and the Shenzhen component 1.1% higher at 10,728.46. The Shenzhen composite also jumped 1.215% to around 1,757.26. Hong Kong’s Hang Seng index, on the other hand, slipped 0.7% as of its final hour of trading. In Japan, the Nikkei 225 slipped 0.6% to close at 23,685.98 while the Topix index declined 0.72% to end its trading day at 1,719.64. South Korea’s Kospi also fell 0.49% to close at 2,201.07. Oil prices were little changed on Monday on weaker Chinese oil demand in the wake of the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts. Oil has dropped more than 20% from a peak in January after the spreading virus hit demand in the world’s largest oil importer and fueled concerns of excess supplies. Brent crude slipped 3 cents to $54.44 a barrel, while U.S. West Texas Intermediate fell 2 cents to $50.31 a barrel. Gold rose to a near one-week high on Monday as mounting concerns about the impact from China’s coronavirus lifted the appeal of safe-haven assets, after the number of casualties exceeded 900. Spot gold rose 0.13% to $1,571.97 per ounce, having hit its highest since Feb. 4 at $1,576.21 earlier in the session. U.S. gold futures were up 0.2% at $1,576.50.