(Bloomberg) -- Stocks slid with U.S. equity futures on Thursday as investors mulled mounting evidence that the coronavirus epidemic is disrupting the world’s second-largest economy. Bonds gained and China’s offshore yuan weakened past 7 for the first time this year before paring.
The Stoxx Europe 600 Index declined, with all but two sectors in the red. Contracts for the three main U.S. equity benchmarks pointed to losses at the open. Shares fell across Asia as a slew of companies suspended some of their China operations in an effort to help contain the illness, with economists starting to cut growth forecasts. Treasury yields added to declines, with the 10-year yield now at the lowest since October.
Earnings continued to roll in. U.S. tech giants presented a mixed picture after the bell on Wednesday, with Facebook Inc.’s results underwhelming as Microsoft Corp. and Tesla Inc. topped expectations. In Europe:
Royal Dutch Shell Plc fell to the lowest in more than two years after missing profit expectations and scaling back buybacks.Deutsche Bank AG fluctuated after reporting a larger-than-expected loss in the fourth quarter.Unilever rose despite the company’s slowest quarterly growth in a decade.BT Group Plc shares fell after the company reported third-quarter profit that missed estimates.Hennes & Mauritz AB jumped after the retailer beat profit estimates and said its chairman is stepping down.
Also on the radar is a rate decision from the Bank of England. The pound erased an earlier loss to trade little changed.
With the death toll from the coronavirus rising to 170 and the number of cases continuing to increase, investors are cautious ahead of a meeting of the World Health Organization’s Emergency Committee later Thursday. Following Wednesday’s Fed gathering, where he and his colleagues kept policy on hold, Chairman Jerome Powell said the outbreak of the virus will likely hit the Chinese economy and could spill wider, but it was too early to assess its impact on the U.S.
“If things go wrong, whether earnings disappoint or the coronavirus causes a short or a long-term problem for the economy, there is not a lot of buffer in asset prices to absorb that,” said Simon Doyle, head of fixed income and multi-asset at Schroders in Sydney. “Clearly there will be a growth shock as people stop traveling, but we don’t know exactly how that will play out. From a market perspective, the lack of a risk premium does make markets vulnerable if it’s worse than people hope it is.”
Elsewhere, crude oil dropped below $53 in New York after the biggest jump in U.S. stockpiles in almost three months.
Here are some events to watch out for this week:
International Paper reports on Thursday, followed by South Korean chipmaker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.The U.S. reports fourth-quarter GDP Thursday.The U.K. is scheduled to leave the European Union Friday.
These are some of the main moves in markets:
Stocks
Futures on the S&P 500 Index decreased 0.7% as of 10:37 a.m. London time.The Stoxx Europe 600 Index dipped 0.7%.The MSCI Asia Pacific Index dipped 1.8%.The MSCI Emerging Market Index dipped 2%.
Currencies
The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1012.The British pound was little changed at $1.3018.The onshore yuan fell 0.4% to 6.937 per dollar.The Japanese yen advanced 0.1% to 108.93 per dollar.
Bonds
The yield on 10-year Treasuries dipped two basis points to 1.57%.The yield on two-year Treasuries decreased one basis point to 1.40%.Germany’s 10-year yield sank two basis points to -0.40%.Britain’s 10-year yield declined two basis points to 0.498%.Japan’s 10-year yield fell two basis points to -0.058%.
Commodities
West Texas Intermediate crude dipped 1.7% to $52.41 a barrel.Brent crude declined 1.8% to $58.72 a barrel.Gold climbed 0.2% to $1,579.81 an ounce.
--With assistance from Andreea Papuc and Adam Haigh.
To contact the reporter on this story: Yakob Peterseil in London at ypeterseil@bloomberg.net
To contact the editor responsible for this story: Sam Potter at spotter33@bloomberg.net
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https://ca.finance.yahoo.com/news/asia-stock-futures-slip-u-214250162.html
2020-01-30 02:43:39Z
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