US futures rise after primary elections; dollar steadies

Bloomberg

American stock-index futures rose with European equities as investors took in surprises from the US presidential primary along with market reactions to the Federal Reserve’s emergency interest-rate cut. Treasuries higher continued their rally, while the dollar steadied.
Contracts on the S&P 500 rebounded from a tumble on Tuesday, when the 50 basis-point Fed move failed to ease concerns about an economic downturn.
Joe Biden’s surprise comeback in the Super Tuesday race for the Democratic Party nominee is seen as blunting the lead of Bernie Sanders that had unsettled some investors. The Stoxx Europe 600 erased early declines as miners and automakers advanced.
A volatile session for Asian stocks left the markets closing mixed. Purchasing managers’ indexes for Hong Kong and China fell to record lows, underlining the impact of the virus on commerce in the region. Treasury 10-year yields slipped further after falling below 1% for the first time in 150 years. The euro dipped after posting its best four-day rally against the dollar since January 2018. Crude oil edged higher for a third day.
Investors are weighing the absence of Group of Seven policy moves to confront the virus with the Democratic leadership contest that threw up a fresh challenge to President Donald Trump. Biden, positioned as a moderate against a more progressive Sanders in the race for the Democratic nomination to take on Trump in November, won nine of 14 states as results rolled in. Sanders took delegate-rich California, the biggest prize.
“Biden would be a less-severe change for markets that already have enough to worry about, with all these external shocks,” said Jerry Braakman, chief
investment officer of First American Trust, in Santa Ana, California. “Sanders would bring a lot changes that markets wouldn’t necessarily like.”
Equities earlier had tumbled after Fed Chairman Jerome Powell warned that the virus outbreak will weigh on activity “for some time.” Expectations the Fed may act again as soon as this month show markets remain extremely cautious about the economy’s prospects to weather the hit.
Meanwhile, virus infections and deaths continued to rise in China and the US.
“They’re pushing on a string,” said veteran emerging-markets investor Mark Mobius in a Bloomberg TV interview. “The problem is not so much interest rates, which are already very low globally. The problem is the supply chain coming out of China.” Markets will worsen “unless China can ramp up production,” he said.
The Stoxx Europe 600 Index advanced 1% in London. Futures on the S&P 500 Index increased 1.8%. Nasdaq 100 Index futures jumped 1.9%. France’s CAC 40 Index climbed 1.1%. The MSCI Asia Pacific Index gained 0.3%.
The Bloomberg Dollar Spot Index was little changed. The euro declined 0.1% to $1.1163. The British pound decreased 0.2% to $1.2784. The Japanese yen weakened 0.3% to 107.47 per dollar. The South Korean Won strengthened 0.6% to 1,187.72 per dollar.
The yield on 10-year Treasuries decreased five basis points to 0.95%. The yield on two-year Treasuries fell four basis points to 0.66%. Germany’s 10-year yield declined less than one basis point to -0.63%. Australia’s 10-year yield decreased seven basis points to 0.723%.
West Texas Intermediate crude jumped 0.7% to $47.51 a barrel. Iron ore gained 3.1% to $88.44 per metric ton. LME copper advanced 0.8% to $5,712.50 per metric ton.