U.S. Futures and Asian Stocks Fall -- Update
April 01 2020 - 4:02AM
Dow Jones News
By Frances Yoon and Avantika Chilkoti
U.S. stock futures declined Wednesday, after leading benchmarks
closed out their worst quarter since the global financial
crisis.
Futures tied to the Dow Jones Industrial Average and S&P 500
ticked down 2.6% early Wednesday.
European stocks also declined. The pan-continental Stoxx Europe
600 index dropped 2.9% with Germany's DAX benchmark down 3.2% and
the FTSE 100 down 3.5%.
As investors rushed to safe-haven assets, the yield on the
10-year U.S. Treasury note fell about 0.02 percentage point to
0.661%. Bond yields fall as prices rise. The ICE Dollar Index,
which tracks the dollar against a basket of currencies, rose
0.4%.
"In the U.S., we're at the beginning of a downturn," said Steven
Englander, global head of G-10 foreign-exchange research and North
America macro strategy at Standard Chartered Bank. "We're likely to
see more unemployment, and the early bottom could come in May, but
that is very speculative. For that to happen, we need a lot of good
luck and serious implementation of economic and health-care
policy."
Mr. Englander said stimulus packages were positive for the
economy, and would help American employees get through the next two
months but that there might be a need for "trillions more." On
Tuesday, President Trump called for a new infrastructure-focused
spending bill worth $2 trillion.
The Federal Reserve said Tuesday that it would launch a
temporary lending facility that for the first time would allow
foreign central banks to convert their holdings of Treasury
securities into dollars, its new bid to alleviate strains in global
markets.
Mr. Englander said the program would improve international
access to dollar-based funding.
"Investors will take it seriously," he said.
The S&P 500 dropped 1.6% Tuesday, taking its year-to-date
losses to 20%, the biggest quarterly decline since 2008. The Dow
Jones Industrial Average fell 1.8%. It slid 23% over the quarter,
its worst showing since 1987.
In Asia, markets were mixed Wednesday. Japan's Nikkei 225 lost
4.5% and Hong Kong's Hang Seng was 2.2% lower. Meanwhile,
Australia's ASX 200 gained 3.6%.
In Hong Kong, shares in HSBC Holdings PLC tumbled more than 9%
to their lowest since 2009, while stock in rival Standard Chartered
PLC also fell. The two lenders, which also have U.K. listings, were
among four banks that said Tuesday they would cancel unpaid 2019
dividends at the Bank of England's request.
Write to Frances Yoon at frances.yoon@wsj.com and Avantika
Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
April 01, 2020 03:47 ET (07:47 GMT)
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