United States
Equities sank again Thursday as worries multiplied over the spreading coronavirus in the US and elsewhere. The Dow industrials plunged 3.6 percent, the S&P 500 fell 3.4 percent, and the NASDAQ was off 3.1 percent.
In the US, markets fretted over the readiness of health care and social systems to cope as cases spread, and businesses and communities appeared to improvise to respond, while the scale of the outbreak remained uncertain. All stock sectors were lower, with energy and financials trailing as oil prices declined and interest rates fell. Airlines again depressed industrials after the International Airline Transport Association predicted airlines could lose $113 billion in revenue in 2020 if the virus worsens.
Autos suffered, with chemical companies hit hard too. Communication services companies lagged. Outperforming while still lower were technology, and health care, with a few winners in biotech, along with consumer staples. Utilities were down, but still held up best.
Among companies in the news, Zoom Video, the online conferencing company, rose 7 percent as its billings soared above expectations in light of rising usage as more people work remotely. Marvell Technologies rallied 10 percent on a revenues beat and better guidance from the semiconductor company. On the downside, Carnival, owner of the cruise ships suffering virus outbreaks, dropped 14.3 percent along with other cruise ship companies. Apple Computer was off 3.3 percent after warning about iPhone supplies from China. Boeing dropped 5 percent amid fallout from weakness in air traffic.
These data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$1.59 to US$49.95, while gold rose $34.40 to US$1,673.10. The US dollar fell against most major currencies. The US Treasury 30-year bond yield fell 17 basis points to 1.55 percent while the 10-year note yield fell 14 basis points to 0.92 percent.
Europe
Coronavirus worries reasserted their hold over markets Thursday, as more firms warned of a hit to business and more cases were reported in Europe and the US. The Europe-wide STOXX 600 fell 1.4 percent, the German DAX fell 1.5 percent, the French CAC percent fell 1.9 percent, and the UK FTSE-100 lost 1.6 percent.
Travel, autos, banks, mining, industrials, and media shares led the losses. Outperformers, though still losers, included food & beverages, personal care, health care, and telecom.
HSBC, the big bank, fell 1.1 percent after sending much of its London staff home after an employee tested positive for the virus. German auto supply company Continental slipped 14 percent after an earnings miss. UK TV company ITV fell 12 percent after warning of the virus' hit to its travel advertising sales. Merck, the big German pharma, fell 1.6 percent on disappointing earnings. Henkel, the German consumer goods company, fell 5.4 percent on a disappointing quarterly results and news of a restructuring. On the positive side, Hugo Boss, the German clothier, rose 2.8 percent on upbeat guidance.
Asia Pacific
Major Asian markets closed higher Thursday, following the lead set by Wall Street on Wednesday but underperforming the gains made by US markets. News of an IMF aid package to help counter the global coronavirus outbreak provided some support to investor sentiment, though official Chinese trade and activity data scheduled for release over the next week remain a key focus.
Hong Kong's Hang Seng index and the Shanghai Composite index were the strongest performers in the region, up 2.1 percent and 2.0 percent respectively, while Japan's Nikkei and Topix indices advanced 1.1 percent and 0.9 percent respectively. Australia's All Ordinaries index closed up 1.2 percent.
Australia's trade surplus narrowed from A$5.4 billion in December to A$5.2 billion in January. Growth in exports and imports both slowed sharply but broadly in line with each other, though these data mainly pre-date the main impact of the global coronavirus outbreak. Exports fell 2.8 percent on the month in January, down from growth of 1.2 percent in December, while imports fell 2.8 percent on the month after a revised increase of 2.2 percent previously.
Looking ahead*
On Friday in Asia/Pacific, Australian retail sales, Japanese household spending, and Chinese merchandise trade reports are due. In Europe, German manufacturers' orders, French merchandise trade, UK Halifax HPI, and Italian retail sales figures are scheduled. In North America, it's Canadian labor force, Canadian merchandise trade, Canadian Ivey purchasing managers, plus the US employment situation and US international trade reports on tap.
