U.S. stock futures slipped on Tuesday and European equities reversed an advance as investors debate whether the market meltdown has ended given the continued spread of the coronavirus. Treasuries and the dollar rose.
S&P 500 contracts had climbed earlier as American political leaders contemplate a fourth round of stimulus, but they couldn’t hold the gains, though oil producers Exxon Mobil Corp. and Occidental Petroleum Corp. jumped in the premarket as crude rebounded.
The Stoxx Europe 600 Index also reversed as banks dipped. Equities were mixed in Asia, where China had stronger-than-anticipated manufacturing data. A measure of European corporate-credit stress eased.
The dollar rose at least 1 per cent versus the euro and three other major peers. The yen sank as the end of Japan’s fiscal year brought positioning adjustments. The ruling party proposed the country’s biggest-ever stimulus package worth 60 trillion yen (US$554 billion).
There have been signs of a recovery across equities worldwide at the end of their worst quarter since 2008. That puts investors at a crossroads, questioning whether extraordinary stimulus by countries and central banks can counter further retrenchment of firms and consumers as the outbreak spreads. New York City, which is emerging as the new epicenter of the pandemic, reported a 16 per cent increase in deaths in six hours. Italy and the Netherlands are considering extending lockdowns, and Spain’s 849 deaths were the most in one day for the country.
“We just don’t know how long the lockdown or stasis of the world economy is going to be,” said Toby Lawson, head of global markets at Societe Generale Securities Australia, told Bloomberg TV. “It would be very premature to say that we’ve seen the bottom.”
In China, the official purchasing managers’ index rose to 52.0 this month. That’s up from a record low of 35.7 in February and above the 50 mark which signals improving conditions. Still, China’s bureau of statistics cautioned that the single-month data didn’t necessarily mean that economy has returned to normal level amid continuing coronavirus concerns.
