U.S. Futures Edge Up as Stocks Slide; Gold Gains: Markets Wrap

(Bloomberg) — U.S. equity-index futures edged higher while stocks in Europe and Asia dropped on Wednesday as investors digested fresh evidence of the widening coronavirus outbreak. Gold advanced and crude oil slid.

Contracts on the three main American equity gauges turned higher after fluctuating for most of the session, a day after the S&P 500 Index fell 3%. The Stoxx Europe 600 Index declined as Diageo Plc and Danone SA warned the outbreak will hit sales in China. The first cases in Greece and in South America emerged, while Spain locked down a seaside resort hotel with about 1,000 guests and workers inside.

Stocks in Sydney and Seoul led declines in Asia, with the won falling back toward its weakest since 2016 as South Korea emerged as a hot spot for the contagion. Ten-year Treasury yields edged up from a record-low close set Tuesday. The euro erased gains after reports that the German government plans to temporarily suspend constitutional limits on public borrowing, while a dollar gauge rose.

Risk assets are struggling to rebound as coronavirus cases steadily climb outside the epicenter in China. South Korea said its national total rose to more than 1,000, while American health officials Tuesday warned that they expect the epidemic to spread in the U.S. President Donald Trump said he will hold a press conference on the virus at 6 p.m. Washington time.

Traders may be looking out for further signs of policy accommodation after American central bankers said they are closely monitoring the spreading virus, though it’s “still too soon” to say whether it will change the outlook.

“The ultimate impact remains entirely unknown at this stage,” said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “And uncertainty is the enemy of conviction.”

Elsewhere, a gauge of high-yield credit risk for European issuers rose for a fifth day. Industrial metals and minerals mostly dropped, including copper and iron ore.

These are some key events coming up:

Earnings keep rolling in from companies including: Baidu Inc., Best Buy Co. Inc., Occidental Petroleum Corp. and Dell Technologies Inc. on Thursday; and London Stock Exchange Group Plc on Friday.The Bank of Korea announces its policy decision on Thursday, with rising risks of an interest-rate cut.U.S. jobless claims, GDP and durable goods data are out Thursday.Japan industrial production, jobs, and retail sales figures are due on Friday.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index climbed 0.3% as of 8:22 a.m. New York time.The Stoxx Europe 600 Index dipped 0.6%.The MSCI Asia Pacific Index fell 1.3%.The MSCI Emerging Market Index declined 0.9%.

Currencies

The Bloomberg Dollar Spot Index rose 0.1%.The euro decreased 0.1% to $1.0874.The British pound declined 0.6% to $1.2933.The onshore yuan weakened 0.1% to 7.02 per dollar.The Japanese yen weakened 0.2% to 110.44 per dollar.

Bonds

The yield on 10-year Treasuries climbed one basis point to 1.36%.The yield on two-year Treasuries sank three basis points to 1.19%.Germany’s 10-year yield climbed two basis points to -0.49%.Britain’s 10-year yield decreased less than one basis point to 0.517%.Japan’s 10-year yield climbed two basis points to -0.086%.

Commodities

West Texas Intermediate crude dipped 1.4% to $49.19 a barrel.Brent crude declined 1.9% to $53.88 a barrel.Gold strengthened 0.4% to $1,642.26 an ounce.

–With assistance from Andreea Papuc 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: Sam Potter at spotter33@bloomberg.net, Yakob Peterseil

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