Stocks run out of steam on U.S. job jitters, yen gains By Reuters


© Reuters. A currency dealer works in front of electronic boards showing the Korea Composite Stock Price Index (KOSPI) and the exchange rate between the U.S. dollar and South Korean won, in Seoul

By Tom Westbrook

SINGAPORE (Reuters) – A two-day equities rally lost momentum on Thursday, and investors sold riskier currencies, as stimulus negotiations dragged on in Washington and investors fretted over a likely spike in U.S. jobless claims.

MSCI’s broadest index of Asia-Pacific shares outside Japan wobbled either side of flat. slumped 4% and U.S. stock futures fell 1%.

The dollar climbed around 1% against the Australian and New Zealand dollars and the yen rose 0.4% against the dollar as investors sought shelter.

“We are not out of the woods just yet,” said Stephen Daghlian, at brokerage CommSec in Sydney. “There are plenty of risks in the next couple of weeks.”

First among them are initial jobless claims in the United States due at 1230 GMT, with forecasts in a Reuters poll ranging from 250,000 claims all the way up to 4 million.

U.S. Federal Reserve Chairman Jerome Powell is also due to appear on NBC television around 1100 GMT.

The Fed’s promise of unlimited bond buying has eased some of the virus-driven financial stress this week. But Powell is also likely to be asked about the real economy, and the apparent divide between health officials and President Donald Trump as to how quickly the country can return to work.

Meanwhile, as Senate leaders in United States hoped to vote on the stimulus package late in the Washington night, markets’ patience and optimism are beginning to waver.

“There has been so much stimulus thrown at this,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney.

“But the positivity related to it is really just sentiment,” she said. “A lot of companies have withdrawn earnings guidance…these are still ahead of us. We don’t know how bad it could be.”

Hong Kong’s was down 0.5% by mid-morning while regional trade was mixed. Indexes in China posted meager gains and Australia, Indonesia and Thailand advanced.

JOBLESS CLAIMS TO TEST BOUNCE

The money at stake in the stimulus bill amounts to nearly half of the $4.7 trillion the U.S. government spends annually.

But it also comes against a backdrop of bad news as the coronavirus spreads and more signs of economic damage.

Singapore’s economy suffered its biggest contraction in a decade in the first quarter, data showed on Thursday, as the coronavirus pandemic prompted the city-state to cut its full-year GDP forecast and plan for a deep recession.

Spain’s coronavirus death toll has overtaken China’s and a total of 21,221 people have died globally.

California Governor Gavin Newsom told reporters on Wednesday that a million Californians had already applied for jobless benefits this month – a number that knocked stocks from session highs and has analysts bracing for even worse to come.

RBC Capital Markets economists had expected a national figure over 1 million in Thursday’s data, but say “it is now poised to be many multiples of that,” as reduced hours across the country drive deep layoffs.

“Something in the 5-10 million range for initial jobless claims is quite likely,” they wrote in a note. That compares to a 695,000 peak in 1982.

Citi Private Bank said the peak could reach 15-18% of the total U.S. workforce, some 25 million people.

In currencies, the mood was to duck and cover. The Australian dollar fell 1.3% to $0.5879 and the pound fell half a percent to $1.1833.

The safe haven yen rose to 110.70 per dollar.

Oil steadied with stimulus hopes offsetting fears of plunging demand. futures slipped 35 cents to$24.14 per barrel and futures fell 0.9% to $27.15.

Gold fell 1% to $1,597.91 per ounce.





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Wall Street Breakfast: Downturn Jitters Abound


Emergency stimulus

Markets rebounded from their deepest rout since 1987 on Tuesday as the White House weighed a fiscal package of more than $1T that includes helicopter cash for Americans and financial relief to small businesses and the airline industry. Treasury Secretary Steven Mnuchin also said corporations will be able to defer tax payments of up to $10M, while individuals could defer up to $1M in payments to the IRS. Adding to the sentiment, the Fed announced it would reopen the so-called Commercial Paper Funding Facility, a key market backstop first set up during the last financial crisis.
Go deeper: Philip Davis lists 10 more ‘buying the dip’ ideas.

Global recession is here

Economists at Morgan Stanley and Goldman Sachs have joined the chorus of other Wall Street prognosticators to declare that COVID-19 has pushed the global economy into recession. It won’t be as steep as the 0.8% contraction of 2009, according to the IMF’s measure, but would be worse than the 2001 and early 1990s recessions. In related news, Mnuchin warned of 20% American unemployment without federal action, while today’s Fed meeting was canceled following the central bank’s emergency actions.
Go deeper: ‘Beware False Prophets Who Never See Bear Markets Coming’ by Danielle Park.

Inflating the life jacket

Boeing (NYSE:BA) is calling for a $60B lifeline for the U.S. aerospace industry, which faces enormous losses from the coronavirus crisis. “Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain,” according to the company. Earlier on Tuesday, President Trump signaled his support for the planemaker, saying at a press conference: “We have to protect Boeing.”
Go deeper: Airlines feel pressure as U.S. raises tariffs on Airbus.

Hotel industry next to make bailout case

Executives from companies such as Marriott (NASDAQ:MAR) and Hilton (NYSE:HLT) convened at the White House on Tuesday to discuss a bailout, consisting of $150B in direct aid for the hotel sector and $100B for related travel companies. They warned that half of the hotels in the country could close this year and the sudden cratering of demand would cause the loss of 4.6M jobs. Chip Rogers, CEO of the American Hotels and Lodging Association, said the economic impact of the pandemic on the hotel industry was already bigger than “September 11th and the 2008 recession combined.”

Keeping plants running

Following hours of talks that extended well into the night, GM (NYSE:GM), Ford (NYSE:F), and Fiat Chrysler (NYSE:FCAU) negotiated “extensive plans” with the United Auto Workers union to prevent America’s auto industry from coming to a standstill. “They will be working on shift rotation to minimize risk,” according to a statement. The ‘Big Three’ “agreed to review and implement the rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts, and extensive plans to avoid member contact.”
Go deeper: Plan to keep Tesla production humming quashed by sheriff.

Harnessing location data

The U.S. government is in active talks with Facebook (NASDAQ:FB), Google (GOOG, GOOGL) and a wide array of tech companies and health experts about how they can use location data gleaned from Americans’ phones to combat the novel coronavirus. The data could help officials predict the next hotspot or decide where to allocate overstretched health resources, The Washington Post reports. Privacy concerns? Recent news about Israel’s plans to use location data to help track COVID-19 already sparked intense discussions about legal and ethical implications.

China moves to expel American journalists

Echoing the NBA-China controversy that blew up last October, Beijing said it would expel American journalists working in the country for The New York Times (NYSE:NYT), The Wall Street Journal (NASDAQ:NWS) and The Washington Post. It continues a tit-for-tat fight that began in February after the Journal ran an opinion article entitled, China Is the Real Sick Man of Asia. In response, Secretary of State Mike Pompeo imposed a cap on the number of employees permitted to work for Chinese government-controlled media organizations in the U.S. (down to 100, from 160).

Everyone-must-eat rally

Grocery store stocks raced higher on Tuesday as traffic accelerated with the number of coronavirus cases growing and dining out no longer an option in some parts of the country. Kroger (NYSE:KR), the largest supermarket chain in the U.S., has even hired more than 2,000 people in the last week to keep up with increased demand. “We’re hiring every day,” CEO Rodney McMullen told CNBC, adding that the company, which also owns Harris Teeter and Fred Meyer, has more than 10,000 openings.

Prioritizing essentials, medical supplies

Independent sellers, as well as vendors who supply items for Amazon (NASDAQ:AMZN) to resell, will be unable to ship products other than such high-demand items to company warehouses until April 5. “As COVID-19 has spread, we’ve recently seen an increase in people shopping online,” reads a memo. “So in the short term, we are temporarily prioritizing household staples, medical supplies, and other important products coming into Amazon fulfillment centers so we can more quickly receive, restock, and deliver these products to customers.”





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Dow Enters Bear Market as Coronavirus Jitters Trigger Bloodbath By Investing.com


© Reuters.

By Yasin Ebrahim 

Investing.com – U.S. stocks extended losses Wednesday, pushing the Dow into bear-market territory on signs the novel coronavirus is gathering pace in the U.S. after both Washington and San Francisco banned large gatherings to curb the virus outbreak, which has become a pandemic according to the World Health Organization.  

The slipped 4.97%, lost 4.78% and the fell 5.55%, or nearly 1,400 points, taking its losses to 20% from all-time highs. 

Boeing (NYSE:) was a big drag on the blue-chip index, falling 15% on reports its would tap its entire loan facility of $13.8 billion. Its declines accounted for about 240 points off the Dow.

After weeks of downplaying the potential effects of the virus, President Donald Trump has called an emerging meeting of top U.S. health officials.

Washington state Gov. Jay Inslee placed a ban on large gatherings in several counties across the state to limit the spread of Covid-19.. San Francisco health officials, meanwhile, announced that they are also banning gatherings of 1,000 or more to contain the virus.

The World Health Organization declared Covid-19 a global pandemic as the virus has spread globally, with infections now topping 120,000.

Investor hopes of U.S. stimulus measures to boost economic growth, meanwhile, were given a boost amid reports that White House is in favor of declaring a national disaster under the Stafford Act to free up to $40 billion in immediate aid, Politico reported. 

Trump a day earlier floated the idea of temporarily suspending payroll taxes to cushion the economic blow from the virus outbreak. 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Stocks Trade Mixed on Virus Jitters, Dollar Rises: Markets Wrap By Bloomberg



(Bloomberg) — Stocks came under pressure in Asia and U.S. equity futures retreated after Japan reported two deaths from the coronavirus and cases in South Korea jumped, spurring concerns about the spread of the disease outside China.

Futures on the S&P 500 Index were down along with the after the Japanese report. The dollar rose against most Asian currencies, and held near the strongest against major counterparts since May 2017. Australia’s dollar reached its lowest against the greenback since the global financial crisis after a monthly jobs report underscored slack that may keep monetary policy easy. Treasuries edged up.

Japan’s earlier climbed as much as 1.2% after an overnight tumble in the yen boosted prospects for exporter earnings. The yen slumped past 111 per dollar with little immediate trigger; market participants ascribed a host of reasons, ranging from disappointing economic news to early positioning before the fiscal year-end next month. The currency Thursday took back a sliver of the biggest losses since August.

While the number of new coronavirus cases in China continues to come down — epicenter-province Hubei reported a steep drop Thursday, though that was tied at least in part to another change in methodology — those outside are sparking alarm. Japan, which has come under criticism for insufficient efforts to contain the disease, said two people from a quarantined ship have died.

“Over the next couple of months we are going to see very bad economic data coming out of China and the rest of the Asian markets,” Suresh Tantia, senior investment strategist at Credit Suisse (SIX:), told Bloomberg TV in Singapore. “Analysts are likely to revise down the earnings estimates. So, after this rebound, we don’t see much value in Asian markets.”

Elsewhere, oil gained as U.S. sanctions on Russia’s largest producer and conflict in Libya put the focus on supply threats.

Here are some key events coming up:

  • Earnings season rolls on, with results from Deere & Co. set for Friday.
  • Indonesia is expected to cut interest rates on Thursday, following emerging-market peers that have already moved.
  • Group of 20 finance ministers and central bank chiefs are scheduled to meet Feb. 22-23 in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the coronavirus threat.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index were down 0.1% as of 1:22 p.m. in Hong Kong. The benchmark reached another record high Wednesday.
  • Japan’s Topix index rose 0.3%.
  • Hong Kong’s declined 0.6%.
  • rose 1%.
  • South Korea’s Kospi index fell 0.5%.
  • Australia’s S&P/ASX 200 Index rose 0.3%.
  • fell 0.3%.

Currencies

  • The yen was flat at 111.36 per dollar after sliding about 1.4% on Wednesday.
  • The offshore yuan fell 0.3% to 7.0321 per dollar.
  • The euro was at $1.0797, little changed.
  • The Dollar Index was at 99.680, after reaching its highest since May 2017 Wednesday.

Bonds

  • The yield on 10-year Treasuries was at 1.56%, down one basis point.
  • Australia’s 10-year yield slid four basis points to 1%.

Commodities

  • West Texas Intermediate crude advanced 0.5% to $53.54 a barrel.
  • Gold dipped 0.2% to $1,609.37 an ounce.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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