Stock Futures Edge Up With Scrutiny on Virus Count: Markets Wrap

(Bloomberg) — U.S. equity futures edged higher while stocks were mixed in Europe and Asia as traders sorted through contrasting data from China on how the coronavirus is spreading. The dollar and gold held steady.

Load Error

Contracts on the three main American stock indexes nudged up, while the Stoxx Europe 600 Index fluctuated in a tight range as gains in utilities offset a drop in health-care shares. In Asia, the major equity markets all rose except for those in Tokyo and Mumbai. China’s yuan continued to trade stronger than 7 per dollar. Oil held well above $51 a barrel in New York. Bonds and the single currency were mostly steady across the euro zone ahead of the region’s fourth-quarter GDP data later Friday. Treasuries edged higher.

Beijing reported a smaller daily increase in virus cases in Hubei than for the previous day, though still bigger than before the counting methodology was changed, creating a somewhat clouded picture. The week has been marred by companies including Chinese airlines putting workers on leave and firms including AstraZeneca Plc warning of a tougher outlook because of the novel disease.

© Bloomberg The put-to-call ratio on the Nikkei 225 has risen to its highest since 2006

Nonetheless, stocks globally are headed for a second successive week of gains while bonds edge lower as investors anticipate a possible V-shaped economic recovery from the virus, even as the effects continue to be felt. E-commerce giant Alibaba Group warned that the disease is having a fundamental impact on China’s economy, and nearly 86,000 domestic and international flights in and out of China were canceled Jan. 23-Feb. 11, or 34% of scheduled services.

“The difficulty with trading these things is timing — and right here, right now, we are not through the woods yet with the coronavirus,” said Kyle Rodda, market analyst at IG Markets Ltd. “You look for those signals to suggest that effectively we are looking at that kind of V-shaped recovery that is still potentially on the cards.”

Hubei, the province at the epicenter of the coronavirus, reported almost 5,000 new cases, a day after confirming nearly 15,000. The death toll in China was at 1,380, lowered by more than 100 to account for some double-counting. Earlier, the World Health Organization said a surge in diagnoses didn’t necessarily indicate a spike in infections, which had helped to lift risk appetite.

Meantime, the Federal Reserve Bank of New York said it will shrink its repurchase-agreement operations more than analysts expected. The yield curve flattened.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index rose 0.1% as of 8:21 a.m. London time.Nasdaq 100 Index futures edged up 0.2%.The Stoxx Europe 600 Index was little changed.The MSCI Asia Pacific Index dipped 0.1%.The MSCI World Index of developed countries fell 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro declined 0.1% to $1.0833.The Japanese yen was little changed at 109.77 per dollar.The Turkish lira weakened 0.3% to 6.0603 per dollar.

Bonds

The yield on 10-year Treasuries declined two basis points to 1.60%.Germany’s 10-year yield dipped one basis point to -0.39%.Britain’s 10-year yield declined two basis points to 0.634%.Japan’s 10-year yield climbed one basis point to -0.027%.

Commodities

West Texas Intermediate crude rose 0.3% to $51.57 a barrel.Gold was little changed at $1,576.14 an ounce.LME aluminum declined 0.2% to $1,744 per metric ton.Iron ore increased 0.2% to $86.20 per metric ton.

–With assistance from Toshiro Hasegawa.

To contact the reporters on this story: Todd White in Madrid at twhite2@bloomberg.net;Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Sam Potter at spotter33@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.