Stocks drop with treasury yields on virus jitters: markets wrap

US equity futures dipped and Asian stocks retreated amid renewed concern about the impact of the coronavirus as cases outside of China increased. Treasuries advanced.

Shares in Korea and Hong Kong saw the steepest losses, with more modest declines in Australia. Indexes in Japan were flat while Chinese stocks advanced. The won declined after South Korean export data fueled concern about the economy. In another sign the rise in virus cases outside of China is denting sentiment, the yield on 10-year Treasuries fell below 1.5% for the first time since September. The Dollar Index remained near the highest in almost three years.

Traders were on tenterhooks this week amid a spike in coronavirus infections outside China and a slew of fresh warnings from companies on the pathogen’s impact. That’s threatening gains that propelled global equities to a record high earlier this month and reigniting appetite for haven assets from Treasuries to the dollar. Two people evacuated to Australia from a cruise ship in Japan tested positive for the coronavirus and South Korea reported 52 more cases.

“It may be a much longer road,” Dan Farley, chief investment officer of the investment solutions group at State Street Global Advisors, told Bloomberg TV in Sydney about the virus impact. “We have to be very mindful that this is not an easily solvable issue and the impact on consumer demand for a number of different sectors is going to be something that we need to be watching out for.”

Elsewhere, oil dipped after hitting the highest in almost four weeks in the wake of a surge in US crude exports and a dramatic slowdown in the expansion of domestic inventories.

© 2020 Bloomberg