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Stocks, Futures Drop After U.S. Slump; Dollar Up: Markets Wrap

(Bloomberg) — Global stocks fell back further from last week’s record amid a panoply of concerns spanning earnings, valuations, coronavirus trends and the fallout of frenzied retail trading in parts of the U.S. market. The dollar rose.

Nasdaq 100 futures underperformed after disappointment over results from the likes of Apple Inc. and Tesla Inc. sent shares sliding after market. Stocks in Hong Kong and Australia saw the bulk of Asian losses. European contracts slid.

Earlier, the S&P 500 slumped 2.6% — the most since October — after Federal Reserve officials left their main interest rate unchanged and made clear the central bank was nowhere near exiting massive support for the economy. Treasuries steadied, with 10-year yields at just over 1%.

Turmoil continued in parts of the market where retail traders are becoming a major force. Shares of GameStop Corp. and AMC Entertainment Holdings Inc. tumbled post-market, paring Wednesday’s surge. The WallStreetBets Reddit forum, which fueled the retail frenzy, was briefly made private by moderators.

Stocks have stumbled after a prolonged rally that spurred talk of possible asset bubbles and predictions a pullback given the pandemic is still raging amid a patchy rollout of vaccines. Fed Chairman Jerome Powell said at a press conference that the U.S. economy was a long way from full recovery and still short of policy makers’ inflation and job goals.

“Markets were vulnerable to a setback given some of the positioning and sentiment data that we monitor but we still believe we’re going into a strong economic and profit recovery,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group Inc., said on Bloomberg TV. “That’s going to drive markets higher from this setback.”

Why GameStop Furor Is Hurting Stock Markets

Soaring volatilities are forcing investors to cut leverage, and that means a large amount of cash is exiting the market. Big institutional names are losing a lot of money very quickly. The stock-market “game” has changed radically over the past week. That raises uncertainty and has risk managers very nervous.

Mark Cudmore, Bloomberg Macro Strategist.

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On the virus front, the European Union failed to resolve its dispute with AstraZeneca Plc over vaccine supplies, raising the risk of additional delays to the bloc’s sluggish inoculation campaign. The euro held losses in the wake of comments from a European Central Bank official who said that markets are underestimating the odds of a rate cut.

These are some key events coming up in the week ahead:

Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.U.S. personal income, spending and pending home sales come Friday.

These are the main moves in markets:


S&P 500 futures retreated 0.5% as of 6:47 a.m. in London. The gauge fell 2.6% on Wednesday.Japan’s Topix index declined 1.1%.Hong Kong’s Hang Seng fell 2.4%.South Korea’s Kospi dropped 1.7%.Shanghai Composite lost 2%.Australia’s S&P/ASX 200 Index sank 1.9%.Euro Stoxx 50 futures were 0.9% lower.


The Bloomberg Dollar Spot Index rose 0.2%.The euro dropped 0.1% to $1.2098.The yen slid 0.2% to 104.28 per dollar.The offshore yuan was little changed at 6.4977 per dollar.


The yield on 10-year Treasuries was at 1%.Australia’s 10-year yield was at 1.08%.


West Texas Intermediate crude slipped 0.7% to $52.49 per barrel.Gold slipped 0.4% to $1,835.96 an ounce.

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