Equity Futures Have Wild Ride
The U.S. index futures are indicated to open with modest losses on Monday. This comes after a wild ride in the overnight electronic session. The Dow Jones Industrial Average had been down as much as 500 points or -2.0% but cut the loss to only -0.25% by the 8:30 AM hour. Trading had turned mildly positive but those gains were not able to hold. The S&P 500 and NASDAQ Composite are indicated to open with losses of -0.45% and -0.15% after similarly wild trading in overnight action.
The moves are driven by the spreading fear of the coronavirus. It’s not that the coronavirus is all that deadly, it’s the growing potential for significant economic disruption that has the market scared. The number of infected has grown to over 89,000 with more than 3,000 dead and new outbreaks popping up every day.
NY confirmed its first case over the weekend, becoming the second east coast state to do so. Europe has raised its threat level to severe as it battles spreading outbreaks in Italy and other parts of the union. A member of Iran’s parliament says his country is hiding a “horrific” number of deaths related to the virus. Infections have been reported in the highest levels of Iran’s government.
Stocks On The Move
United Airlines is down more than -2.5% this morning. The global air-carrier says it may have to further reduce the number of planned flights because of the viral impact to travel. Other airlines are down about -2.0%. Shares of Marriott are also moving lower, down about -2.25%, as traders trim back full-year revenue outlook. Cruise-ship operator Carnival is down -7.0% on virus fears, it is one of the worst-hit in today’s action.
Both Gold and Oil are trading at support levels this morning. Gold prices are in an uptrend and confirming support at the previous multi-year high. Oil prices are in steep decline. The demand outlook for oil was already tepid, the onset of coronavirus and Wuhan Flu has taken a serious toll. ConocoPhillips, an integrated oil company, is down more than -6% on falling oil prices, declining demand outlook, and lower EPS forecasts.
A Big Week For Data
This is a big week for data and today’s list is no exception. Traders can expect readings on PMI and ISM manufacturing later in the session. Also on tap, today is construction spending. Later in the week, we’ll get an important read from the Fed, the Beige Book. Along with that is the ADP, Challenger, and NFP reports on employment.