Opening Bell: Futures, Stocks Dive, Gold Pops As Investors Flee Risk Assets
Investing.com | Feb 24, 2020 12:33
U.S. index futures, including for the NASDAQ, Dow and S&P 500 all plunged this morning, along with European and Asian indices, as the trading week kicked off on Monday. Investors sought refuge in gold, bonds and the yen, so-called haven assets, after the number of coronavirus cases reported outside China accelerated.
The yield decline steepened and oil prices collapsed.
h2 Global Financial Affairs/h2Risk-off returned to markets with a vehemence today, as warnings of a global epidemic escalated over the weekend. The number of reported cases of Covid-19 in South Korea, Japan, Singapore, Iran and Italy, among other countries, all rose. At time of writing, the fatality rate has hit 2,619.
Adding to the market's grim sentiment, during the weekend, G-20 leaders, meeting in Riyadh, Saudi Arabia said "the fast-spreading coronavirus posed a serious risk to global growth."
NASDAQ futures are struggling to remain above an uptrend line from the Oct. 3 low, while the RSI completes a H&S pattern, signaling the uptrend line will fail to keep prices up much longer.
Shares of automakers and miners dragged the STOXX Europe 600 Index lower today. Italy's FTSE MIB is down more than 4%. Italy, with 157 reported cases of Covid-19, along with 3 deaths, is looking like it's Europe’s epicenter for the pandemic. Government authorities there have locked down an area of 50,000 people near Milan. The country’s government bonds slumped.
In Asia, Japan's markets are closed for a holiday. However, South Korea’s KOSPI suffered a near-4 percent loss of value. Hong Kong’s Hang Seng, China's Shanghai Composite and Australia’s ASX 200 were all hit with selloffs as well.
Yields on 2- and 10-year Treasurys fell to the lowest since mid-2016 while the 30-year, long bond plunged to an all-time low, after completing two continuation patterns.
Get The App
The Australian dollar dropped to a fresh, 11-year low.
Note the chart's similiarty to that of yields, demonstrating the strong dollar dominance of these moves. The Aussie has broken a variety of technical gauges including falling below its rising channel since September, and a bearish downturn in its MAs.
Gold gapped up this morning, reaching $1,689, the highest level for the yellow metal since early 2013.
Gold is extending an upside breakout to a continuation pattern, as is appropriate after completing a massive bottom since mid-2013, as per a call we made back in August.
h2 Up Ahead/h2- Earnings results keep on coming. This week, investors will hear from: Home Depot (NYSE:HD) and Salesforce.com (NYSE:CRM) on Tuesday; Peugeot (OTC:PUGOY) on Wednesday; Baidu (NASDAQ:BIDU), Best Buy (NYSE:BBY) and Dell (NYSE:DELL) Thursday; and Beyond Meat (NASDAQ:BYND) on Friday.
- The next Democratic presidential debate, this time in South Carolina, will take place on Tuesday.
- The Bank of Korea announces its policy decision on Thursday, with risks to its economic outlook growing amid a local surge in coronavirus cases.
- U.S. jobless claims, GDP and durable goods released on Thursday.
- Japan's industrial production, jobs, and retail sales figures are due on Friday local time (late Thursday evening in the U.S.).
- The Stoxx Europe 600 Index sank 2.3%.
- Futures on the S&P 500 Index slipped 1.9%.
- NASDAQ 100 Index futures fell 3.0%.
- The MSCI Asia Pacific Index decreased 1.3%.
- The yield on 10-year Treasuries fell seven basis points to 1.40%.
- Germany’s 10-year yield decreased four basis points to -0.48%.
- Britain’s 10-year yield decreased three basis points to 0.543%.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.