01/27/2020
The Coronavirus issue will pass... Hold firm. The market needed a pullback after weeks of gains anyway. This is the perfect excuse. Expect downside momentum and extreme volatility the next few days at least until people pay more attention to the HUGE Earnings weeks ahead! Also, you can always make money in the markets! Up or Down! Want to learn how? Contact us anytime.
Have a great week everyone!
Jason M Shy
(Bloomberg) -- Stocks and crude oil tumbled, and havens including the yen and Treasuries jumped, as fears deepened about the rising impact of the deadly coronavirus.
With no sign of the disease’s containment, traders rushed out of risk assets. Contracts on the S&P 500 Index fell more than 1% before paring losses and Japan’s Topix slid. Futures on Chinese shares fell more than 5% as the country extended its Lunar New Year holiday. Oil dropped over 2% in New York, while 10-year Treasury yields sank to the lowest since October. The moves come on a day with limited trading options in Asia, as markets are shut in locations including China, Hong Kong, South Korea and Australia, due to holidays.
China announced an unspecified extension to the weeklong lunar new year holiday, amplifying the economic impact. Beijing also suspended the sales of package tours, hitting firms around the world that rely on Chinese travelers’ spending. The death toll from the virus has risen to at least 80, and confirmed cases in the U.S. rose to five on Sunday.
“I’m starting to think cash is the right place to be for the next few weeks,” Stephen Innes, chief Asia market strategist at Axitrader, wrote in a note Monday. “Any economic shock to China’s colossal industrial and consumption engines will spread rapidly to other countries through the increased trade and financial linkages associated with globalization.”
The virus news is coinciding with an earnings season in full swing. Apple, Facebook and Samsung are among those due to report this week. Investors will also have a Federal Reserve policy meeting and Mark Carney’s last monetary policy decision as the Bank of England‘s governor to monitor.
Here are some events to watch out for this week:
Tech giants Apple, Facebook, SAP, Samsung and South Korean chip maker SK Hynix announce earnings, as do industrial and energy behemoths International Paper, Boeing, Caterpillar, Lockheed Martin, GE, Unilever, United Technologies, Exxon Mobil, Shell and Chevron.The Senate impeachment trial of President Donald Trump continues in Washington Monday.Fed policy makers are expected to open 2020 the same way they closed 2019: by holding interest rates steady Wednesday.The BOE meeting is highly anticipated Thursday after a series of dovish comments raised speculation it could lower interest rates.The U.S. reports fourth-quarter economic growth Thursday.The U.K. is scheduled to leave the European Union Friday.
These are the main moves in markets:
Stocks
S&P 500 futures fell 0.9% as of 11:02 a.m. in Tokyo. The S&P 500 Index fell 0.9% Friday.Japan’s Topix sank 1.3%.FTSE China A50 futures slid 5%.
Currencies
The Japanese yen rose 0.3% to 108.96 per dollar.The offshore yuan fell 0.5% to 6.9634 per dollar.The euro was little changed at $1.1034.
Bonds
The yield on 10-year Treasuries fell five basis points to 1.64%, on top of a five basis-point drop Friday.Japan’s 10-year yields fell about two basis points, to about -0.045%.
Commodities
West Texas Intermediate crude declined 2.1% to $53.04 a barrel.Gold rose 0.6% to $1,581 an ounce.
To contact the reporter on this story: Cormac Mullen in Tokyo at [email protected]
To contact the editor responsible for this story: Christopher Anstey at [email protected]
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