• Barron Martins

Stocks Futures Trade Mixed, Oil Slides Below $15: Markets Wrap



U.S. and European stock futures were mixed while the dollar strengthened on Monday as investors prepared for a dour earnings season, while keeping an eye on tentative signs that coronavirus infection rates are decelerating.


Crude oil prices collapsed anew, with West Texas Intermediate crude plunging below $15 a barrel to the lowest level since 2001. The Bloomberg Dollar Spot Index recouped some of its declines from Friday, while Treasuries were largely flat. Australian and Japanese stocks saw the biggest declines among major Asia-Pacific markets, while Hong Kong and Chinese indexes outperformed. U.S. equity futures fell and European contracts advanced.


Earnings season will provide investors with a look at just how much the pandemic has impacted businesses. IBM, Infosys Ltd. and China Mobile Ltd. report on Monday, followed by Coca-Cola Co. and Netflix Inc. Goldman Sachs Group strategists anticipate that American companies will pare back cash spending by a record this year.


In China, investors took in the latest move to support credit growth, with banks lowering their prime rates by 20 basis points for one-year loans. The country’s finance ministry also said the country will issue an extra 1 trillion yuan ($141.3 billion) in special-purpose bonds “in the near term,” signaling that the fiscal response to the historic growth slump seen in the first quarter is being ramped up.


In the U.S., House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were optimistic about reaching a deal to top up funds in a loan program aimed at helping small businesses stay afloat. In Europe, where equity futures advanced, central bank officials have held early talks with the European Commission on setting up a euro-zone bad bank that would take billions of euros in debt off lenders’ balance sheets, the Financial Times reported.


On the virus front, New York Governor Andrew Cuomo said the state may be past the high point of coronavirus deaths. Fewer daily deaths were reported in Italy, Spain and the U.K.

“The longer investors have to contemplate future economic issues while they wait for more countries to be on the downward slope of the pandemic curve, the more scope there is of risk assets pricing in a difficult future,” said Chris Iggo, CIO Core Investments, AXA Investment Managers U.K. Ltd.


These are the main moves in markets:


Stocks

  • Futures on the S&P 500 fell 0.6% as of 7:10 a.m. in London. The gauge rose 2.7% on Friday.

  • Japan’s Topix index slipped 0.7%.

  • Australia’s S&P/ASX 200 Index fell 2.1%.

  • South Korea’s Kospi index lost 1.1%.

  • Hang Seng Index fell 0.2%.

  • Shanghai Composite Index gained 0.4%.

  • Euro Stoxx 50 futures advanced 1.1%.

Currencies

  • The yen slipped 0.3% to 107.89 per dollar.

  • The offshore yuan was little changed at 7.0858 per dollar.

  • The euro bought $1.0845, down 0.3%.

  • Bloomberg Dollar Spot Index rose 0.5%.

Bonds

  • The yield on 10-year Treasuries was at 0.63%, little changed.

  • Australia’s 10-year bond yield fell about two basis points, to 0.83%.

Commodities

  • West Texas Intermediate crude tumbled 19% to $14.90 a barrel.

  • Gold slipped 0.3% to $1,677.98 an ounce.

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