Stocks Slide as Virus Cases Jump; Bonds Advance: Markets Wrap

Stocks fell alongside U.S. equity futures on Thursday as officials in China deployed a revised methodology to diagnose the coronavirus, sending the number of confirmed cases soaring. Treasuries, gold and the yen all jumped.

The Stoxx Europe 600 Index fell for the first time this week, dragged lower by miners and banks. Contracts on the main U.S. equity gauges all slipped a day after the underlying benchmarks hit fresh records, as the jump in infections undercut optimism that the spread of the virus was slowing. Gauges in Japan, Shanghai, Hong Kong and South Korea declined, though shares in Australia edged higher.

In company news, Barclays Plc slipped as the bank revealed British regulators are probing Chief Executive Officer Jes Staley’s relationship with financier Jeffrey Epstein. Credit Suisse Group AG fell after reporting a bigger-than-expected pretax loss at its investment bank, while Nestle SA dropped after pushing back its target for sales growth. The euro traded near the lowest since 2017 amid concern economic activity in the region is slowing.

Investor sentiment had improved in recent sessions amid speculation the impact from the coronavirus outbreak on global growth would be short-lived. That assumption was thrown into doubt when Hubei, the province at the center of the epidemic, reported almost 15,000 new cases after it revised its data to include “clinically diagnosed” cases in its daily disclosure.

“Just when markets were getting comfortable with the idea that the Covid-19 infection increase was trending lower, the sudden jump in the number of new cases in Hubei has jolted them out of this sense of complacency,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd.

Elsewhere, oil traded around $51 a barrel in New York. Emerging-market shares and currencies slipped.

Here are some key events coming up:

  • Earnings season continues with reports still due from the likes of Alibaba and AIG.
  • Thursday brings a gauge of underlying U.S. inflation, the core consumer price index. It is forecast to increase to 0.2% in January, a faster pace than in December.
  • China and the U.S. on Friday are scheduled to lower tariffs on billions of dollars of respective imports as part of the trade deal signed last month.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index declined 0.5% as of 8:11 a.m. London time.
  • The Stoxx Europe 600 Index dipped 0.5%.
  • The MSCI Asia Pacific Index decreased 0.1%.
  • The MSCI Emerging Market Index dipped 0.2%.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.1%.
  • The euro increased 0.1% to $1.088.
  • The British pound advanced 0.1% to $1.2978.
  • The onshore yuan declined 0.1% to 6.979 per dollar.
  • The Japanese yen increased 0.3% to 109.75 per dollar.

Bonds

  • The yield on 10-year Treasuries fell five basis points to 1.58%.
  • The yield on two-year Treasuries fell four basis points to 1.41%.
  • Germany’s 10-year yield dipped two basis points to -0.40%.
  • Britain’s 10-year yield declined three basis points to 0.585%.
  • Japan’s 10-year yield was unchanged at -0.034%.

Commodities

  • West Texas Intermediate crude dipped 0.4% to $50.94 a barrel.
  • Brent crude declined 0.7% to $55.38 a barrel.
  • Gold advanced 0.6% to $1,574.75 an ounce.

— With assistance by Chester Yung, Cormac Mullen, and Livia Yap

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