Opening Bell: U.S. Futures, Stocks Fall On Lockdown Risk-Off; Oil Reverses

0
5


  • US indices enter downtrends
  • Fears rise that coronavirus resurgence in Europe will further dent global growth
  • Oil signals further declines

Key Events

US futures, including the , , and , as well as European stocks are all in the red on Monday as the number of coronavirus cases in Europe and the US continue to increase.

Traders are concerned that governments may introduce additional social restrictions to curb the spread of the virus which could further dent the global economy. Oil also fell on concerns over tougher travel restrictions. 

Global Financial Affairs

The pandemic’s momentum is accelerating, increasing the risk of a in the UK and other European countries. The UK’s Chief Medical Officer, Chris Whitty is expected to warn later today that the country is at a “critical point.”

Meanwhile, Germany’s health minister, Jens Spahn said that European case-trends are “worrying,” and he urged people to remain vigilant. Over the weekend, the number of deaths in the US neared 200,000 and the CDC is predicting that the US death toll could reach 218,000 by Oct.10. 

Investors expect that any indication of progress on America’s long-awaited fiscal stimulus package may turn the selloff around, after Federal Reserve Chair Jerome Powell that government aid for businesses damaged by coronavirus shutdowns had been “critical” to the US economy. 

All four major US contracts were hovering around -1.5% this morning, with futures for the small cap Russell 2000 down around 2%.

The slumped, pressured by airline and travel stocks, as well as a 6% decline in shares of HSBC (LON:). The bank underperformed the 3.5% decline in the benchmark . It hit  a 25-year low on new revelations over the weekend that several global banks had allegedly been involved in for over 20 years. 

On Friday, US stocks fell to a six-week low, weighed down by tech stocks, as investors cashed out due to the lack of a catalyst to take stocks higher. The declined for the third straight day after whipsawing amid Friday’s quadruple witching, a quarterly event fueling volumes, as large positions in derivative contracts roll over.

S&P Daily

After falling below its uptrend line, the S&P 500 fell below its 50 DMA, which was providing a support to a two-week range. The pause in the drop appears to be a rising flag, bearish after the 7.2% preceding slump in as little as four sessions from the all-time high. Now, the 100 MA beckons, where it supports the preceding low in the uptrend line. A fall below that would establish a new downtrend, something the indices already registered.

Investors increased Treasury positions, pushing yields on the down to the lowest in almost three weeks.

The jumped, erasing two days of losses. 

Dollar Index Daily

Dollar Index Daily

Chart powered by TradingView

The greenback continues to struggle between a falling channel and a possible bottom.

reversed course after its best week since June, having surged 10%, on concerns that further lockdowns with hamper demand.

WTI Daily

Chart powered by TradingView

Technically, a bearish reversal upon a return move to the rising wedge confirms another .

Up Ahead

  • On Tuesday, Fed Chair Jerome Powell is slated to begin three days of before the Senate Committee on Banking, Housing, and Urban Affairs. Powell will outline monetary policy and discuss the economy.
  • In New Zealand, the is not expected to make any changes to interest rates when it meets tomorrow.

Market Moves

Stocks

  • Futures on the S&P 500 Index declined 1%.
  • The Stoxx Europe 600 Index fell 1.6%.
  • The Index decreased 0.4%.
  • The Index dipped 0.7%.

Currencies

  • The Dollar Index increased 0.4%.
  • The increased 0.1% to $1.1852.
  • The British gained 0.2% to $1.2937.
  • The Japanese strengthened 0.5% to 104.09 per dollar.
  • The strengthened 0.2% to 6.7639 per dollar.

Bonds

  • The yield on 10-year Treasuries sank two basis points to 0.67%.
  • The yield on Treasuries decreased less than one basis point to 0.14%.
  • Germany’s yield declined one basis point to -0.50%.
  • Britain’s yield fell one basis point to 0.167%.
  • Japan’s yield decreased less than one basis point to 0.015%.

Commodities

  • West Texas Intermediate crude declined 1.3% to $40.42 a barrel.
  • dipped 1.3% to $42.49 a barrel.
  • strengthened 0.1% to $1,953.59 an ounce.





Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here