Stocks slump, US futures fluctuate; gold advances

Bloomberg

Stocks dropped globally and US index futures fluctuated on Wednesday as investors fretted fresh evidence of the widening coronavirus outbreak. Gold advanced and Treasuries were steady.
The Stoxx Europe 600 Index fell for a fifth straight session, suffering its longest losing streak since July, as companies including Diageo Plc and Danone SA warned the virus outbreak will hit their sales in China. Futures on the three main American equity gauges swung between gains and losses, a day after the S&P 500 Index fell 3% to cap its worst two-day slide since 2015.
South Korean and Australian stocks led declines in Asia, with the won falling towards its weakest since 2016 after the country reported a further escalation in cases of the virus. The yen gave up some recent gains. Ten-year Treasury yields hovered close to their record-low close on February 25, while the dollar edged higher.
Risk assets are showing few signs of rebounding as coronavirus cases steadily climb outside the epicenter in China. South Korea said its national total rose to more than 1,000, while American health officials warned that they expect the epidemic to spread in the US.
Traders may be looking out for further signs of policy accommodation after American central bankers said they are closely monitoring the spreading virus, though it’s “still too soon” to say whether it will change the outlook.
“The ultimate impact remains entirely unknown at this stage,” said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “And uncertainty is the enemy of conviction.”
Earnings keep rolling in from companies including: Baidu, Best Buy Co, Occidental Petroleum Corp and Dell Technologies Inc on Thursday.
The Bank of Korea announces its policy decision on Thursday. US jobless claims, GDP and durable goods data are out on Thursday.
The Stoxx Europe 600 Index fell 1.3% in London. Futures on the S&P 500 Index dipped 0.1%. Nasdaq 100 Index futures declined 0.2%. South Korea’s Kospi index sank 1.3%. The MSCI Asia Pacific Index decreased 1.3%.
The Bloomberg Dollar Spot Index gained 0.1%. The euro was little changed at $1.088. The British pound fell 0.5% to $1.2937. The Japanese yen weakened 0.2% to 110.40 per dollar.
The yield on 10-year Treasuries increased less than one basis point to 1.35%. The yield on two-year Treasuries decreased four basis points to 1.18%. Germany’s 10-year yield gained one basis point to -0.51%. Britain’s 10-year yield fell two basis points to 0.496%.
West Texas Intermediate crude fell 1.3% to $49.26 a barrel. Gold strengthened 0.8% to $1,647.72 an ounce.