Stocks Stabilize After Biggest Rout Since Crisis: Markets Wrap

Stocks stabilized globally along with oil after the deepest equity rout since the great financial crisis, while bonds and haven currencies gave back gains.

The post Stocks Stabilize After Biggest Rout Since Crisis: Markets Wrap appeared first on Investor's Business Daily.

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Stocks stabilized globally along with oil after the deepest equity rout since the great financial crisis, while bonds and haven currencies gave back some of their exceptional gains from Monday.

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Shares rose in Europe and Asia alongside U.S. index futures. The weak reversals came in the wake of the OPEC+ alliance collapsing just as governments worldwide struggled to contain the coronavirus, and few gauges came close to retracing even half of their historic tumble notched hours earlier. The Stocks Europe 600 Index opened higher, while S&P 500 Index futures gained almost 3%, after the benchmark's near 8% plunge Monday.

Equities rose in Hong Kong and Shanghai while they also closed higher in Japan after recovering from a 4.2% slide earlier. Brent crude regained less than $2 a barrel of its $10.91 crash on Monday. The yen slid alongside the Swiss franc. Ten-year Treasury yields recouped roughly half of yesterday's tumble.

Investors watched S&P 500 futures briefly slip to 20% below their high—signaling a bear market —only to gain after President Donald Trump said his administration will discuss a possible payroll tax cut with Congress, and that there will be "major" economic announcements Tuesday. Treasury Secretary Steven Mnuchin rejected comparisons with the financial crisis.

Measures to contain the coronavirus continue to undermine prospects for corporate earnings, and raise the danger of a funding crisis, while the oil price crash threatens a swath of defaults among producers. Italy added nationwide travel restrictions to its effective lockdown of the northern region of the country.

"While things feel like the end-of-days I'd stay risk averse in the near-term, but expect bear market rallies," Chris Weston, head of research at Pepperstone Group, said.

Here are some key events coming up:

  • The European Central Bank's policy decision comes Thursday amid expectations it may ease policy.
  • The U.K. Chancellor of the Exchequer unveils the government's 2020 budget on Wednesday.
  • The U.S. core consumer price index, due Wednesday, is expected to remain subdued in February.

These are the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index increased 1% as of 8:16 a.m. London time.
  • Futures on the S&P 500 Index gained 2.2%.
  • The MSCI Asia Pacific Index climbed 0.7%.
  • The MSCI All-Country World Index advanced 0.3%.

Currencies

  • The Bloomberg Dollar Spot Index jumped 0.3%.
  • The euro decreased 0.5% to $1.1392.
  • The British pound decreased 0.4% to $1.306.
  • The Japanese yen weakened 1.6% to 104.03 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped 11 basis points to 0.65%.
  • The yield on two-year Treasuries climbed five basis points to 0.43%.
  • Germany's 10-year yield climbed eight basis points to -0.78%.
  • Japan's 10-year yield advanced 12 basis points to -0.048%.

Commodities

  • Brent crude advanced 5.8% to $36.34 a barrel.
  • Iron ore surged 4.1% to $88.50 per metric ton.

The post Stocks Stabilize After Biggest Rout Since Crisis: Markets Wrap appeared first on Investor's Business Daily.

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