Market Commentary - Another roller-coaster week

StockFanatic

Publish date: Mon, 09 Mar 2020, 11:33 AM

· Markets are braced for another wild week as the coronavirus keeps spreading and an oil price-war is thrown into the mix. Crude oil prices slumped more than 20% and US equity futures plunged over 3% at Monday's open in Asia, as a price war for crude threatened a fragile global economy hit by increasing coronavirus worries.

· On Sunday, Saudi Arabia slashed the price of its crude after producers failed to agree on supply cuts. The oil-price war comes just as US stocks fell back into a correction and Treasury yields chalked up fresh all-time lows. The US 10-year Treasury yield plunged below 0.5% early on Monday.

· Asia futures are in the red. Not only is USD/JPY slumping on haven demand, but EUR/USD is up 0.8%, while GBP/USD gains 0.3% to emphasize the Dollar's vulnerability.

· The oil situation is likely to exacerbate already volatile markets. On Friday, the Dow fell 256.50 points, or 1%, to close at 25864.78. The Dow had been down more than 890 points shortly after the opening bell, before paring its losses and clawing back nearly 600 points in the last 50 minutes of trading. It closed the week with a gain of 1.8%.

· The S&P 500 dropped 51.57, or 1.7%, to 2972.37. The Nasdaq Composite slid 162.98, or 1.9%, to close at 8575.62. Both the S&P and the Nasdaq ended the week with modest gains, thanks in part to a rally at the start of the week.

· Global markets are on course for another rocky week with sentiment battered as the virus continues to spread and cause more disruption to economies. China's exports plunged in January and February by a more-than-expected 17.2%. Covid-19 led to extended holidays, depressed factory output, and blocked transportation. Imports also fell, tempered by increased commodity purchases. The trade balance flipped to a deficit. The Chinese economy may take a second hit as the outbreak weakens overseas demand.

· Stocks in Asia looked set for more declines and bond yields slid in Australia and New Zealand. Stocks in Japan dropped more than 3% and 5% in Australia early on Monday.

· Investors will focus on movements in oil prices on Monday. The European Central Bank will provide food for thought when it decides on interest rates on Thursday.

· Investors will also be on the lookout for the slew of corporate earnings to be released in March. What is more pertinent would be the forward guidance and outlook given by companies, rather than the actual results itself. As we expect a bout of earnings estimates to be cut, this would likely result in heightened volatility in markets.

· On politics, Joe Biden got another endorsement from a former rival as California Senator Kamala Harris threw in her support. Harris, who's likely to be in the top tier of Biden's list of potential running mates should he capture the nomination, will have a joint appearance with Biden on Monday night in Detroit ahead of Tuesday's primary in Michigan and contests in five other states.

• Access to over 6088 cross-asset publications and commentary delivering insights from global research and strategy teams.

• Easy-to-use search capabilities, with better and faster text-based searching.

To Subscribe: Click Here | Read Reports Highlights: Click Here

Discussions

Be the first to like this. Showing 0 of 0 comments

Featured Posts

MQ Chat

New Update. Discover investment communities that resonate with your ideas

VCPlus

Trade Confidently & Analyze Charts Conveniently - Download VCPlus IOS & Android App Now!

Latest Videos