U.S. Stock Futures Drop With Trump Virus Warning: Markets Wrap

(Bloomberg) — U.S. stock futures declined as investors assessed worsening American coronavirus figures as a new quarter begins. Asian shares traded mixed.

Futures on the S&P 500 Index slid more than 2% after President Donald Trump warned of a “painful” two weeks ahead, with the country grappling to get the outbreak under control and New York City’s death toll now topping 1,000. Stocks in Japan hit session lows in the final hour of trading, while Australia’s rallied more than 3%. Hong Kong shares had a modest retreat, with two of the city’s largest lenders, Standard Chartered Plc and HSBC Holdings Plc, suspending dividend payments because of the virus. Chinese shares outperformed as a private reading on the country’s manufacturing sector beat expectations, rebounding in March. Treasuries added to gains.

“In the U.S., the data remains fairly worrying and the peak may well be a few weeks on,” Bob Parker, an investment committee member at Quilvest Wealth Management, told Bloomberg TV. “The economic data is clearly starting to improve in March in China after a very weak January and February.”

Global stocks are coming off their worst quarter since the end of 2008, tumbling 22%. That’s enticed some investors back into equities, but with volatility elevated, many expect further declines.

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The coronavirus is guaranteed to throw the world into recession, and economists are becoming less convinced about the potential for a strong snapback in growth. Data on Wednesday showed the China Caixin manufacturing PMI rebounded to 50.1 in March, surging back into growth territory and joining the official Chinese measure that also beat consensus on Tuesday.

“The Caixin data encompasses a much broader range of small and medium enterprises than the official data, and the fact that it remains above 50 is some reason for cheer that China remains on track to lead the world out of the pandemic slump,” Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte., wrote in a note. “That is not to say that the world is out of the woods by any stretch of the imagination.”

In its latest measure to combat the economic fallout from the pandemic, the Federal Reserve said Tuesday it was establishing a temporary repurchase agreement facility to allow foreign central banks to swap any Treasury securities they hold for cash. That’s yet another step beyond the actions it took in the 2008 financial crisis.

Elsewhere, oil fluctuated above $20 a barrel in Asia, kicking off a month which is likely to see demand for the fuel plummet further at a time when the world’s top exporters are pumping more in a damaging battle for market share.

These are the main moves in markets:

Stocks

Futures on the S&P 500 slid 2.3% as of 6:34 a.m. in London. The gauge fell 1.6% on Tuesday.Topix index tumbled 3%.Australia’s S&P/ASX 200 Index rose 3.6%.Hang Seng Index dipped 1.5%.Shanghai Composite Index rose 0.3%.Euro Stoxx 50 futures sank 2.4%.

Currencies

The yen dipped 0.2% to 107.71 per dollar.The offshore yuan held at 7.0992 per dollar.The euro was at $1.1024, down 0.1%.

Bonds

The yield on 10-year Treasuries slid about four basis points to 0.63%.Australia’s 10-year bond yield fell eight basis points to 0.68%.

Commodities

West Texas crude was little changed at $20.5 a barrel.Gold rose 0.5% to $1,585.56 an ounce.

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