(Bloomberg) -- U.S. stock futures jumped on Wednesday after a moderate presidential candidate took the lead in Democratic primaries and amid expectations of more global policy responses to the coronavirus after the Federal Reserve’s emergency rate cut. Treasury 10-year yields hovered around 1% after breaching that level on Tuesday for the first time in 150 years.
Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq Composite rebounded from tumbles on Tuesday, when the 50 basis-point Fed move failed to ease concerns about an economic downturn. Joe Biden’s surprise comeback hours later in the Super Tuesday race for the Democratic party nominee took the lead from Bernie Sanders that had unsettled some investors. The Stoxx Europe 600 headed toward its biggest gain in a month.
A volatile session in Asia left stock markets mixed. Hong Kong and China PMI data fell to record lows, underlining impacts of the virus on the region’s commerce. The euro dipped after posting its best four-day rally since January 2018. Crude oil gained for a third day, while the dollar edged higher versus a basket of peers.
Investors are anxious for promised action by the Group of Seven to confront the virus while they’re buying risk assets on dips and watching the world’s biggest bond market move closer to negative yields. The Democratic contest posed a fresh challenge to President Donald Trump as nine states went to Biden, who’s positioned as a moderate against a more progressive Sanders in the race for the party’s nomination to take on Trump in November.
“The magnitude of the market sell-off and the rapid policy reaction encouraged us to recently add to our risk positions” through additional exposure to U.S. high-yield credit versus high-quality bonds, Mark Haefele, UBS Wealth Management’s global chief investment officer, wrote in a note.
Equities on Tuesday tumbled after Fed Chairman Jerome Powell warned that the virus outbreak will weigh on activity “for some time.” Expectations the Fed may act again as soon as this month show markets remain extremely cautious about the economy’s prospects to weather the hit. Meanwhile, virus infections and deaths continued to rise in China and the U.S., while Spain emerged as the location of the earliest virus death outside of Asia, after late post-mortem shook previous assumptions.
“They’re pushing on a string,” said veteran emerging-markets investor Mark Mobius in a Bloomberg TV interview. “The problem is not so much interest rates, which are already very low globally. The problem is the supply chain coming out of China.” Markets will worsen “unless China can ramp up production,” he said.
These are the main moves in markets:
Stocks
The Stoxx Europe 600 Index surged 1.4% as of 8:33 a.m. New York time.Futures on the S&P 500 Index advanced 1.9%.The U.K.’s FTSE 100 Index surged 1.5%.The MSCI Asia Pacific Index climbed 0.3%.
Currencies
The Bloomberg Dollar Spot Index increased 0.1%.The euro decreased 0.4%.The British pound was little changed at $1.2816.The Japanese yen weakened 0.4% to 107.52 per dollar.The South Korean Won strengthened 0.6% to 1,187.72 per dollar.
Bonds
The yield on 10-year Treasuries climbed less than one basis point to 1%.The yield on two-year Treasuries dipped one basis point to 0.69%.Germany’s 10-year yield gained one basis point to -0.62%.Australia’s 10-year yield decreased seven basis points to 0.723%.
Commodities
West Texas Intermediate crude jumped 1.4% to $47.86 a barrel.Iron ore increased 0.3% to $88.10 per metric ton.Gold strengthened 0.1% to $1,642.65 an ounce.LME aluminum gained 0.5% to $1,730 per metric ton.
--With assistance from Joanna Ossinger, Elena Popina and Adam Haigh.
To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Robert Brand
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https://finance.yahoo.com/news/treasuries-crack-1-asia-stocks-220620051.html
2020-03-04 12:27:00Z
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