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Bloomberg
US equity futures fluctuated and stocks slipped on Monday as investors weighed a weekend full of negative coronavirus news against the stimulus measures that triggered a bounce in risk assets last week. The dollar rebounded, Treasuries edged higher and oil sank.
Contracts on the S&P 500 Index swung between losses and gains after President Donald Trump abruptly abandoned his ambition to return American life to normal by Easter. Abbott Laboratories surged in the pre-market after unveiling a five-minute coronavirus test. Shares in Europe followed earlier declines across much of Asia, though they came off their lows. The dollar was on course to snap a four-session losing streak.
Core European bonds rose after the outbreak killed more than 3,000 in Spain and Italy over the weekend. Pessimism returned to credit markets, where the cost to insure high-yield debt jumped in both Asia and Europe, as Moscow and Tokyo joined other cities urging residents to remain at home. Brent crude extended recent losses and was set for its worst month in history, down about 54%. Investors are beginning the week digesting word that the biggest economy will stay crippled for longer after Trump heeded advice from the government’s top doctors that re-opening the US in two weeks risks greater loss of life as the coronavirus outbreak accelerates. The president said “social distancing†guidelines would remain until at least April 30, while his top infectious-disease expert said 100,000-200,000 may die.
“Markets are still in uncharted territory,†said Medha Samant, director of investment at Fidelity International. “When you look at the stages of this pandemic, you’ve gone into escalation,†she said.
In the latest stimulus moves, China’s central bank lowered short-term funding rates and injected cash into its financial system, Australia announced a job-support program and limited public gatherings to just two people.
Elsewhere, Australian shares were the notable exception to broad declines, with the equity benchmark surging by a record thanks to the new stimulus measures.
Quarter-end strains were expected to add to investor
nervousness on Monday and Tuesday as financial firms rein in collateral lending to shore up balance sheets, while Japanese banks face their fiscal year-end. The MSCI gauge of global equities is down about 23% since the start of the year, on course for its worst quarter since the end of 2008.
Futures on the S&P 500 Index advanced 0.4% in London.The Stoxx Europe 600 Index decreased 0.8%. The MSCI Asia Pacific Index dipped 0.9%.
The Bloomberg Dollar Spot Index jumped 0.7%. The euro declined 0.8% to $1.1048. The British pound decreased 0.5% to $1.2398. The Japanese yen fell 0.1% to 108.06 per dollar.
The yield on 10-year Treasuries decreased two basis points to 0.66%. Gold fell 0.1% to $1,625.72 an ounce. West Texas Intermediate crude decreased 5.2% to $20.39 a barrel.