Stocks Tumble With U.S. Futures; Treasuries Rally: Markets Wrap - Yahoo Finance

Global Stocks Head for Bear Market as Rout Deepens: Markets Wrap

(Bloomberg) --

The global stock rout extended Thursday, with European equities plunging and U.S. futures pointing to further heavy losses on Wall Street after big declines across Asia. A global gauge of shares was heading for a bear market as Treasuries rallied and haven currencies including the yen and Swiss franc jumped.

President Donald Trump’s remarks on the coronavirus were the catalyst for the latest leg down in risk assets; a combination of travel restrictions between the U.S. and Europe and underwhelming stimulus measures did little to reassure investors. Futures for the main American equity gauges once again dropped by the most allowed at one point. The Stoxx Europe 600 tumbled more than 6%, setting up a sixth day of declines as travel and leisure shares cratered.

Japanese stocks closed more than 4% lower even after another liquidity pledge from the country’s central bank. Australian shares were among the worst performing worldwide, sinking deeper into a bear market despite a stimulus plan there. Treasury yields resumed their retreat and oil extended losses.

The heavy losses across equities meant the MSCI All-Country World Index extended declines to more than 20% from a peak last month, crossing the threshold for a bear market. The gauge must close below that level to formally enter one.

Trump unveiled steps including lending aid for small businesses and asked Congress to pass undefined payroll-tax relief. But his Oval Office address appeared to give little confidence to the market that the U.S. is tightening its grip on the deadly virus. The World Health Organization earlier called the outbreak a pandemic and the Dow Jones Industrial Average tipped into a bear market, ending the longest bull-run in history for U.S. shares.

“Recession risk is rising and we are nowhere near pricing that in,” said Sue Trinh, global macro strategist at Manulife Investment Management in Hong Kong. “All the ‘solutions’ we are seeing from the powers that be are reminiscent of the great financial crisis,” but what’s more important is resources for the virus fight, she said.

Signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.

--With assistance from Sophie Caronello and Min Jeong Lee.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net;Sam Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, Yakob Peterseil

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2020-03-12 08:38:00Z
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