Dow Jones
Dow Jones set to slump on Monday on concerns about an economic disaster as the coronavirus spreads with unknown implications yet. During the weekend confirmed infections rise to 2700 while the number of deaths has increased to 80. In the SARS virus back in 2002-2003 the World Bank estimated the total damage to the economy at 30 billion USD. But now some analysts worry that the coronavirus is even more dangerous than SARS and spreads faster. A slow down in the Chinese economy would have a major negative impact on the global economy. Crude oil is under heavy selling pressure while gold is attracting some bids.
The Dow Jones futures are 1.54% lower at 28492. The S&P 500 futures are 1.47% lower at 3245, while the Nasdaq futures are 1.89% lower at 8,972. On Friday the stocks in Wall Street ended lower while with the drop today the Dow Jones approaches the 50-day moving average.
European indices selling accelerates as we approached midday after the German IFO index disappointed. FTSE 100 is 2.34% lower at 7,408. Investors focus will be on the BOE policy meeting on Thursday. The DAX Index is 2.34% lower at 13,258. Ifo business climate index came in at 95.9 below the expectations of 97.0. The IFO, Current Assessment came in at 99.1, also below the estimate of 99.2. The CAC 40 is 2.28% lower at 5,887 while the FTSE MIB is 1.83% lower at 23,531.
On the economic calendar the new home sales, the durable goods orders, the consumer confidence (January), and pending home sales will capture investors attention. On the central banks’ calendar, the Federal Reserve & Bank of England monetary policy decisions will be on the spotlight.
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Asian indices finished sharply lower today while the Chinese and Australian exchanges were closed for the New Year. The Nikkei 225 ended 2.03% lower at 23,343.
Cryptocurrencies managed to rebound during the weekend. Bitcoin adds 1.16% at 8690. Ripple price (XRPUSD) bounced of the trend line, and as of writing is 0.02% lower at 0.2298. Litecoin (LTCUSD) is 3.37% higher at 57.97. Ethereum (ETHUSD) is 0.35% higher at 168.24.
In forex markets, USDJPY is 0.28% lower as yen attracts bids from investors looking for safe-haven assets. The Aussie dollar is 0.75% lower against the USD. Kiwi is also under selling pressure against the greenback giving up 0.69% at 0.6560. While EURUSD is another victim of coronavirus scare and trades lower.
Global growth concerns as coronavirus spread weigh on crude oil price which is 2.55% lower at $52.83, while the Brent crude is 2.76% lower at $58.24. Gold price is 0.72% higher at $1,582 getting a boost from the coronavirus outbreak and Iraq attacks. Silver price also attracts the bids, adding 0.85% at $18.23.