U.S. Futures Flash Bear Warning as Rout Extends: Markets Wrap - Yahoo Finance

U.S. Futures Gain After Worst Stock Drop Since ‘08: Markets Wrap

(Bloomberg) -- U.S. stock futures saw a modest gain in early Asian trading Tuesday after the biggest rout in equities on Wall Street since 2008.

Contracts on the S&P 500 Index, which briefly traded down 20% from their high -- signaling a bear market -- gained after the Trump administration previewed economic measures to be unveiled Tuesday to address the blow from the coronavirus. Treasury Secretary Steven Mnuchin rejected comparisons with the financial crisis. Asian futures are set to fall, while bonds and currencies stabilized after wild moves on Monday.

President Donald Trump said the administration will discuss a possible payroll tax cut with Congress, and said there will be “major” economic announcements Tuesday.

The S&P 500 Index sank 7.6% Monday, the most since December 2008. Italy imposed nationwide travel restrictions. Treasury yields plummeted, though were above lows seen in Asian trading Monday. Crude sank over 25% and credit markets buckled.

Read more: Breakneck speed of sell-off puts longest bull market in jeopardy

In a dramatic day Monday across assets globally:

All but nine S&P 500 companies were lower Monday, with energy producers routed by 20%. Apple sank 7.9% and Dow Chemical plunged 22%.The rout began at the open, with losses reaching 7% four minutes in, triggering NYSE circuit breakers that halted trading for 15 minutes. The S&P 500 is down almost 19% from its Feb. 19 all-time high, threatening to end the record-long bull market that began 11 years ago to the day.Crude tumbled the most since the Gulf War in 1991, after an OPEC+ alliance that had contained global production disintegrated. WTI and Brent slumped by about 25%.The 10-year Treasury yield fell below 0.5% before climbing back to 0.57%, and the 30-year yield dropped under 0.9%, taking the whole U.S. yield curve below 1% for the first time in history.The Stoxx Europe 600 Index fell the most since 2016 on trading volumes exceeding three times the 100-day average.A U.S. derivatives index that measures the perceived risk of corporate credit surged by the most since Lehman Brothers collapsed.The yen was up about 3% versus the dollar while the euro and Swiss franc both strengthened more than 1%.

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

Futures on the S&P 500 gained 1.3% as of 8:09 a.m. in Tokyo. The S&P 500 Index sank 7.6% to the lowest since June.

Currencies

The euro was at $1.1427.The Japanese yen was at 102.44 per dollar.

Bonds

The yield on 10-year Treasuries sank 22 basis points to 0.54% Monday, the largest tumble in more than eight years.Australia’s 10-year bond yield was at 0.64%.

Commodities

Gold was steady at $1,669 an ounce.West Texas Intermediate was at $32.02 a barrel.

--With assistance from Vildana Hajric.

To contact the reporters on this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

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

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©2020 Bloomberg L.P.

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