Stocks, futures slide on virus angst; dollar gains

Bloomberg

Global stocks dropped for a second day and US equity-index futures tumbled amid concern more economic shutdowns are becoming necessary to contain a fast spreading pandemic.
A stronger dollar and a slide in Treasury yields underscored the risk-off mood on Tuesday as New Zealand discovered a positive case and announced a lockdown. Gold rises for a fifth day and oil declined. Contracts on the S&P 500 and Nasdaq 100 gauges lost at least 0.4% each.
Investor confidence is getting hit by concern that the economic impact of the pandemic will linger, compounding the risks posed by any tapering of Federal Reserve stimulus, regulatory clampdowns by China and travel curbs. The next cue on monetary policy was likely to come later when Fed Chair Jerome Powell speaks at a town hall.
Market gyrations this week are “coming alongside eight consecutive weeks of rising Covid cases at the global level that’s raised the prospect of a further deterioration in the outlook over the weeks and months ahead,” Deutsche Bank AG strategists including Karthik Nagalingam wrote in a note.
European stocks headed for the worst two-day losses in four weeks with stocks closely tied to economic activity, such as retail, travel, cars and banks, posting the biggest losses.
Asian equities closed at the lowest level this year. Chinese technology shares slumped after regulator released draft rules banning unfair competition among China’s online platform operators. In New Zealand, officials said they were investigating a Covid-19 case, triggering a tumble in the currency and bond yields. Australia’s dollar slid after the central bank signaled it’s ready to act if lockdowns take a bigger economic toll.
Treasury yields declined, with the 10-year rate trading around 1.22%, more than eight basis points below its 200-day moving average. Powell’s town hall may act as a precursor to the Jackson Hole symposium in late August where some investors expect an announcement about tapering to come.
Renewed virus concerns and the technology selloff echoed in US premarket trading, with Amazon.com Inc losing 1.9% and Carnival Corp dropping 2%.

BHP Group jumped 6.3% in London after the world’s biggest miner announced it will quit the oil-and-gas business and distribute the equity proceeds from the sale to its shareholders.
The Stoxx Europe 600 falls 0.1% as of 9:55 am London time and futures on the S&P 500 also fall 0.5%.
While futures on the Nasdaq 100 drop 0.4%, futures on the Dow Jones Industrial Average also fall 0.4%. The MSCI Asia Pacific Index falls 1.1% and the MSCI Emerging Markets Index also slumps by 1.2%.
While the Bloomberg Dollar Spot Index rises 0.2%, the euro was little changed at $1.1776 and the Japanese yen was little changed at 109.30 per dollar. The offshore yuan fell 0.1% to 6.4845 per dollar. The British pound falls 0.3% to $1.3807.
While the yield on 10-year Treasuries declined four basis points to 1.22%, Germany’s 10-year yield declined three basis points to -0.50% and Britain’s 10-year yield declined four basis points to 0.54%.
Brent crude falls 0.3% to $69.33 a barrel and spot gold rises 0.4% to $1,794.24 an ounce.