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Beyond the Numbers

Futures Pointing To Continued Weakness On Wall Street
3/19/2020 8:58 AM

The major U.S. index futures are pointing to a sharply lower opening on Thursday, with stocks likely to extend the nosedive seen over the course of the previous session.

The downward momentum on Wall Street reflects continued concerns about the economic impact of the coronavirus pandemic.

Stocks moved sharply lower during trading on Wednesday, extending the sell-off seen over the past several sessions.

The major averages climbed off their worst levels going into the close but still ended the day sharply lower. The Dow plunged 1,338.46 points or 6.3 percent to 19,898.92, the Nasdaq plummeted 344.94 points or 4.7 percent to 6,989.84 and the S&P 500 tumbled 131.09 points or 5.2 percent to 2,398.10.

The weakness on Wall Street came as traders cashed in on yesterday's strong gains amid continued concerns about the coronavirus pandemic.

Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 13.6 percent.

The sell-off by gold stocks came amid a steep drop by the price of the precious metal, as gold for April delivery plunged $47.90 to $1,477.90 an ounce,

Substantial weakness was also visible among housing stocks, as reflected by the 12.6 percent nosedive by the Philadelphia Housing Sector Index.

Energy, steel, semiconductor and banking stocks also saw considerable weakness on the day, moving sharply lower along with the other major sectors.

Commodity, Currency Markets

Crude oil futures are climbing $1.59 to $21.96 a barrel after plunging $6.58 To $20.37 a barrel on Wednesday. Meanwhile, after plummeting $47.90 to $1,477.90 an ounce in the previous session, gold futures are falling $3 to $1,474.90 an ounce.

On the currency front, the U.S. dollar is trading at 109.73 yen compared to the 108.08 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0802 compared to yesterday’s $1.0915.

Asia

Asian stocks fell on Thursday as a European Central Bank plan to spend more than $800 billion to buy bonds and the passage of a bipartisan funding and relief package in the U.S. as part of the nation's response to the coronavirus pandemic failed to ease investor fears that the world is heading for a virus-fueled economic catastrophe.

The 750-billion-euro ($820-billion) program is temporary and will be halted when the coronavirus crisis is judged to be over "but in any case not before the end of the year", the ECB said as countries around the world scrambled to prevent wider transmission of COVID-19, which has now infected more than 200,000 people and killed almost 9,000.

China's Shanghai Composite index dropped nearly 1 percent to 2,702.13, while Hong Kong's Hang Seng index tumbled 2.61 percent to 21,709.13.

Japanese shares hit a 3-1/2-year low as panic selling over the coronavirus pandemic overshadowed a massive shot of stimulus from the world's major central banks. The Nikkei average gave up early gains to end the session down 1.04 percent at 16,552.83, its lowest close since November 2016.

Market heavyweight SoftBank Group Corp plunged over 17 percent. Fujifilm Holdings Corp declined 8.5 percent after the company said it expects no direct earnings impact from potential sales growth of Favipiravir in China for now.

Australia's benchmark S&P/ASX 200 lost 3.44 percent to finish at 4,782.90 even as the Reserve Bank made a historic foray into quantitative easing, saying it would do "whatever is necessary" to ensure funding costs are low and credit is freely available. Following an out-of-schedule meeting, the central bank slashed its cash rate to an all-time low of 0.25 percent.

New Zealand's benchmark NZX-50 index tumbled 3.6 percent to 9,114.53 after Prime Minister Jacinda Ardern announced the country's borders will be closed to everyone but citizens and residents from tonight.

Seoul stocks extended recent losses on worries that the economic stimulus measures announced by major economies around the globe is not enough to revitalize financial markets.

The benchmark Kospi crashed 133.56 points, or 8.39 percent, to 1,457.64 as the country reported 152 new cases of the new coronavirus today, up from 93 new cases a day earlier, bringing the nation's total infections to 8,565. Tech heavyweights Samsung Electronics and SK Hynix fell around 6 percent while battery maker Samsung SDI plunged over 17 percent.

Philippine shares plunged by nearly 25 percent only moments after the Manila stock exchange resumed trade after a two-day halt. Markets later cut losses and were down 12 percent.

Overnight, U.S. stocks tumbled again as the number of coronavirus infections kept climbing, creating more uncertainty about how badly the economy is getting hit. The Dow Jones Industrial Average slumped 6.3 percent, the tech-heavy Nasdaq Composite shed 4.7 percent and the S&P 500 lost 5.2 percent.

Europe

European stocks rose from near-seven-year lows on Thursday after the European Central Bank (ECB) announced the launch of a €750 billion ($820 billion) emergency bond purchase scheme to soften the economic fallout from the coronavirus pandemic.

Massive stimulus measures already announced by central banks and governments around the world also helped offer some respite after recent string of losses.

The pan-European Stoxx 600 was up 0.7 percent at 281.63 after losing 3.9 percent in the previous session.

The German DAX rose half a percent and the U.K.'s FTSE 100 gained 0.2 percent, while France's CAC 40 index jumped as much as 2.5 percent.

Osram Licht slumped 12 percent. The lighting manufacturer said it does not expect to achieve its corporate targets for the current 2020 financial year, due to the COVID-19 pandemic.

Lufthansa soared 5.6 percent. The airline said, for fiscal 2020, the magnitude of the expected decline in adjusted EBIT is currently not predictable.

MorphoSys gained 1 percent despite widening its FY19 loss.

Hugo Boss gave up 6.3 percent. The luxury fashion house announced that it has temporarily closed a large number of retail stores as well as many points-of-sale at important partners in Europe and North America, as a result of global spread of COVID-19.

HeidelbergCement was down over 5 percent. The company said, due to the fast spread of the coronavirus, a valid outlook on the 2020 business year is currently not possible.

Tobacco company BAT, beverages company Diageo and consumer goods firm Unilever all were moving higher in London.

Luxury brand Burberry Group fell 3 percent after a warning that sales have halved since 24 January.

Next Plc shares jumped 4.3 percent. The company reported that its profit before tax for fiscal year ended January 2020 increased 2 percent to 748.5 million pounds from 733.6 million pounds last year.

Regarding the coronavirus stress test, the company said it is concluded that the business could sustain the loss of more than 1 billion pounds or 25 percent of annual full price sales.

Engineer Meggitt slumped 9 percent after issuing a trading update.
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