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The minute of the Friday market
- Global stocks are pulling back as data shows economic activity slowed notably in January, with lockdowns triggered by COVID shutting down businesses and factories.
- European PMI readings point to a double-dip recession, while UK data shows January lockdowns choked services at the start of the first quarter.
- Intel and IBM earnings receive a bitter reception in extended trading hours, while stock volatility increases as stocks retreat from all-time highs.
- Oil prices are collapsing as China prepares to extend some of its new lockdown orders, possibly until the Lunar New Year, following COVID spikes in Shanghai and Beijing.
- U.S. equity futures suggest a softer Wall Street opening ahead of quarterly earnings from Schlumberger and Kansas City Southern as well as January PMI data at 9.45 a.m. EST.
Wall Street futures fell from their all-time highs on Friday, as the dollar remained firm and oil prices fell, as investors reacted to a series of gloomy readings in global economic activity triggered by the rise in coronavirus infections and tighter lockdowns.
The European economy appears poised for a double-dip recession following January PMI data which indicates that overall activity has slowed notably in the world’s largest economic bloc, Germany, France and the United States. Italy imposing travel restrictions and business closures in order to bring the pandemic under control.
In the UK, the benchmark PMI gauge fell to 40.6 points – nearly 10 points below the mark that normally separates growth from contraction – while a similar reading from Japan showed a sharp drop in factory activity.
US readings will arrive at 9:45 a.m. EST, with existing home sales data for the following December fifteen minutes later, but traders are already using PMI numbers as a catalyst to pull some risk out of the market. after all the weather yesterday. Tops.
Chipmaker Intel Corp’s earnings reaction negative (INTC) – Get the report and IBM (IBM) – Get the report Also weighing on sentiment, as was an overnight jump in the CBOE’s key stock market volatility index, the VIX, which rose 6.5% to 23 points in extended trading.
Futures linked to the Dow Jones Industrial Average suggest an opening bell slide of 265 points, with those linked to the price of the S&P 500 in a pullback of 29 points. The tech-driven Nasdaq is set for an 85-point opening bell withdrawal.
Oil prices have also been hit by the poor run of PMI readings, as well as plans in China to extend some of its new lockdown orders, perhaps until next month’s Lunar New Year celebrations, to following new outbreaks of COVID in Beijing and Shanghai.
WTI futures for March delivery, the US benchmark that normally dictates the direction of gas prices, was marked down $ 1.27 from last night’s close at $ 51.86 while Brent contracts for the same month, the global benchmark, fell from $ 1.30 to $ 54.80 a barrel.
European stocks were noticeably weaker during trading hours, with the Stoxx 600 falling 1% and the UK FTSE 100 falling 0.85%, while declines in China and Hong Kong pushed down 0.9% of the MSCI ex-Japan index in the last hours of trading.
Japan’s Nikkei 225 closed 0.44% lower at 28,631.45 points.
Away from stocks, the US dollar index has climbed higher as traders seek safe haven assets following the day-to-day sell-off of stocks, as well as the continued drop in bitcoin, which has fallen further. by 11% and traded as low as $ 28,800 during business hours in Asia.
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