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Stocks hit two-week lows, oil slides on virus surge

Published 06/28/2020, 08:39 PM
Updated 06/29/2020, 05:50 AM
© Reuters. FILE PHOTO: A man wearing a protective face mask, following the coronavirus disease (COVID-19) outbreak, walks in front of a stock quotation board outside a brokerage in Tokyo

By Thyagaraju Adinarayan

LONDON (Reuters) - World shares hit two-week lows and oil fell nearly 2% on Monday as the relentless spread of the coronavirus curbed optimism on the global economy, prompting investors to take shelter in safe-haven bonds and gold.

European stocks opened slightly lower, after Asian shares ended deep in the red playing catch up with Wall Street's ugly close on Friday as some U.S. states reconsidered their reopening plans.

The global death toll from COVID-19 reached half a million people on Sunday, with one quarter of those in the United States, where cases have surged in a handful of southern and western states.

MSCI's world shares index was off 0.2%, hitting its lowest level since June 15 dragged down by Japan's Nikkei shedding 2.2% and Chinese blue chips off 0.9%. E-Mini futures for the S&P 500 were up 0.1%.

"The market is caught in a real battle between recovery optimism and news of increasing cases in certain geographical areas such as the U.S," said John Woolfitt, director of trading at Atlantic Capital Markets.

"I think this battle will remain until the U.S. get a handle on it."

Sovereign bonds benefited from the shift to safety with yields on U.S. 10-year notes near 0.64%, having briefly been as high as 0.96% early in June. German government bond yields clung to one-month lows on Monday.

The U.S. dollar has generally gone in the opposite direction, rising to 97.334 against a basket of currencies from a trough of 95.714 earlier in the month.

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It had less luck on Monday, easing back to 107.18 yen, though it remained well within the recent range of 106.06 to 107.63. The euro stood at $1.1245 having found solid support around $1.1167.

"Financial markets remain extremely fragile, having to weigh worsening virus news against improving economic data," said Marija Veitmane, senior strategist at State Street (NYSE:STT) Global Markets.

It is an important week for U.S. data with the ISM manufacturing index on Wednesday and payrolls on Thursday, ahead of the Independence Day holiday. Federal Reserve Chair Jerome Powell is also testifying on Tuesday.

"U.S. economic data will reinforce that the economy is through the worst of the recession in our view," said CBA currency analyst Joseph Capurso.

"But a double‑dip recession is possible if widespread restrictions are reimposed, leading to a surge in the dollar."

In commodity markets, gold held near its highest since early 2012 at $1,773 an ounce.

Oil prices slipped amid concerns the pandemic would slow the reopening of some economies and thus hurt demand for fuel.

Brent crude futures fell 69 cents to $40.33 a barrel, while U.S. crude lost 62 cents to $37.87.

Graphic: Asia stock markets https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH

Graphic: Asia-Pacific valuations https://product.datastream.com/dscharting/gateway.aspx?guid=80e5bbdc-eae6-4b37-bc49-a2d8056b75de&action=REFRESH

Latest comments

Oil is up. US has had some surges but mostly related to riots. EU and China are fine. The economy is not going to shutdown, the US would lose it's position as a world power. Some counties can eventually be closed down temporarily at best.
Stock indices will likely finish the week at a slightly higher level than they started at.
This article as written 45 kinutes ago and oil has jumped almost a dollar or 2.5% right after this news. Hehe.
End of Q2. Companies need cash. Sell off week continues.
how embarrassing! London, Spain, France China, all of Europe and Asia! All doin really, really good fighting this VIRUS! And the U.S. GETTING WORSE!
Saya who? How do you know that? We have an election around the corner with an incumbent that many want out of office, an a media that caters to the opposition party.
These analysts are high all the time. Overweight us stocks?? Insanity
Free money from the Fed and ECB has had markets running on hopium way too long. Reality is kicking in
You can talk a big game but I bet you're not gonna short the market..
i bet i do
We’re through the worst of The economy? Are you kidding me. Some of the largest contractions in history will not go way over night. There is a reason there is record Cashway on the sidelines. With loan defaults mounting Daily we are definitely headed in the right direction. And now with the second wave Far worse than the first, shut Downs loook almost inevitable. More jobs will be lost. Or we will look at many more deaths. Its a no Win situation at this point. Have to let things run their course. Everything is trending back in the Wong direction. V shaped recovery will be elusive.
2nd wave wont be that disastrous. people learn from experience dealing with the virus. its a pandemic not a plague.
Lol nevermind these articles.
All coronavirus threats must be priced already in the market many times. Why is it always excuse for taking market down. If Coronavirus is real danger to stock market then the stock market should go down to 2300 levels without any optimism and with range bound until the valid real vaccine is created and has positive test results.
China’s data has always been whatever the government wants the world to think it is. But the pandemic elevated China’s data to new and unprecedented levels of deep-fake status all around.
The fact is the global economy have been destoried and will continue until trump crash no matter how strong policy the fed will take.
US equity will continue to rise as usual despite world equity outside of US have been sideways for yearssss
The coronavirus is not "threatening the recovery" because their is no recovery.
Friday may be seen later as the day that conditions for panic selling gelled. There will be more days like Friday, and days when the market or more or less bad than Friday, but if you are still bullish in this market, then you are either a Robinhood investor or operating on sentiment.
US does more test.ing, .US finds more ca.ses. C.hi.na stops testi.ng, Chi.na stops finding more cases. US media is simply a mou.thp.iece of the Co.mmu.nist Party of Chin.a so the sheep on the left bli.ndly ob.ey because ora.n.mge. ma.n bad..
sorry for the typos, this site censors posts to protect their globalist overlords from criticism
The censorship on this site is really bad.
Every fake news media site owned by the smallhats has heavy censorship, if they even allow comments at all.
US does more testing, US finds more cases. C.hina stops testing, Chi.na stops finding more cases. US media is simply a mouthpiece of the Co.mmu.nist Party of Chin.a so the sheep on the left bli.ndly ob.ey because ora.n.mge. ma.n bad..
as soon as trump is out the virus will not exist lmaoooo
fake news from china they want trump out so fake news on virus
covid-19 now become political virus in US
it has been from day 1
I can tell the future: COVID-1984 will magically disappear on November 4th 2020
I see what u did over there!
HA HA HA yes Yes  1984...…...not just 19...…….
you know why nobody is talking about the death rates or "flatten the curve" anymore? because it no longer fits the narrative. people getting testing, it is finding cases some old and some new, death rate down significantly. the latest numbers show that you are more likely to die if you contract the common flu than covid
it is also notable that nobody is saying the virus does not exist, it has been proven that the lockdowns do not reduce the mortality rate of the virus. the goal of the lockdowns was to slow down the virus. the virus was slowed down. now we are paying the price for slowing it down. places that had more infections earlier are seeing less later because the way to become immune is to previously have been infected. many countries, like china, are not even testing anymore unless people are hospitalized because they see it is pointless. the media does not tell you any of this because they have an agenda.
that is actually false, they current testing cannot tell new infections from old infections. many cases currently being found are in people who may already be immune and asymptomatic. there has been no rise in hospitalizations or deaths to suggest what you are stating is true. just fearmongering.
it should also be noted that they are counting repeat testing as multiple cases. if somebody gets tested more than once and comes back positive each time they count it as multiple cases.
non-communist party of china title: US stock futures green as people realize more cases is from more testing, death rate plummeting, hospitals not overwhelmed in the slightest
More testing doesn't change the overall infection rate.
more testing does affect the case counts that MSM is intentionally reporting while ignoring per capita testing rates and death rates
 it should also be noted that they are counting repeat testing as multiple cases. if somebody gets tested more than once and comes back positive each time they count it as multiple cases.
Isn't this the same exact article they posted Friday?
No
It's American markets leading Asian markets, thus NY markets up tomorrow and Asian futures will follow.
No
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