(Bloomberg) — Global stocks dropped for a second day and U.S. equity-index futures tumbled amid concern more economic shutdowns are becoming necessary to contain a fast-spreading pandemic.
A stronger dollar and a slide in Treasury yields underscored the risk-off mood Tuesday as New Zealand discovered a positive case and announced a lockdown. Gold rose for a fifth day and oil declined. Contracts on the S&P 500 and Nasdaq 100 gauges lost at least 0.4% each.
Investor confidence is getting hit by concern that the economic impact of the pandemic will linger, compounding the risks posed by any tapering of Federal Reserve stimulus, regulatory clampdowns by China and travel curbs. The next cue on monetary policy is likely to come later Tuesday when Fed Chair Jerome Powell speaks at a town hall.
Market gyrations this week are “coming alongside eight consecutive weeks of rising Covid cases at the global level that’s raised the prospect of a further deterioration in the outlook over the weeks and months ahead,” Deutsche Bank AG strategists including Karthik Nagalingam wrote in a note.
European stocks headed for the worst two-day losses in four weeks with retail stocks posting some of the worst declines. Other industry groups closely tied to economic activity, such as travel, cars and real estate, also tumbled.
Asian equities closed at the lowest level this year. Chinese technology shares slumped after a regulator released draft rules banning unfair competition among China’s online platform operators. In New Zealand, officials said they were investigating a Covid-19 case, triggering a tumble in the currency and bond yields. Australia’s dollar slid after the central bank signaled it’s ready to act if lockdowns take a bigger economic toll.
Treasury yields declined, with the 10-year rate losing four basis points and trading around 1.23%. Powell’s town hall may act as a precursor to the Jackson Hole symposium in late August where some investors expect an announcement about tapering to come.
Renewed virus concerns and the technology selloff echoed in U.S. premarket trading, with Amazon.com Inc. losing 1.9% and Carnival Corp. dropping 1.5%.
BHP Group jumped 6.5% in London after the world’s biggest miner announced it will quit the oil-and-gas business and distribute the equity proceeds from the sale to its shareholders.
Here are some events to watch this week:
U.S. Fed Chair Powell hosts a town hall discussion with educators TuesdayChina’s top legislative body, the National People’s Congress Standing Committee, begins a four-day meeting in Beijing TuesdayU.S. retail sales are due TuesdayReserve Bank of Australia minutes are scheduled to be released TuesdayReserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr WednesdayFOMC minutes released WednesdayBank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday
For more market analysis read our MLIV blog.
Some of the main moves in markets:
Stocks
Futures on the S&P 500 fell 0.5% as of 4:20 a.m. New York timeFutures on the Nasdaq 100 fell 0.4%Futures on the Dow Jones Industrial Average fell 0.5%The Stoxx Europe 600 fell 0.3%The MSCI World index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%The euro was little changed at $1.1779The British pound fell 0.4% to $1.3800The Japanese yen was little changed at 109.33 per dollar
Bonds
The yield on 10-year Treasuries declined four basis points to 1.23%Germany’s 10-year yield declined two basis points to -0.49%Britain’s 10-year yield declined three basis points to 0.54%
Commodities
West Texas Intermediate crude fell 0.8% to $66.73 a barrelGold futures rose 0.3% to $1,794.60 an ounce
More stories like this are available on bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.
