Stocks, futures slide on virus angst; dollar gains: markets wrap

Global stocks dropped for a second day and US 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 shutdown. Gold rose for a fifth day and oil declined. Contracts on the S&P 500 and Nasdaq 100 gauges lost 0.5% each.

Investor confidence is getting hit by concerns that the economic impact of the pandemic will linger, compounding the risks posed by 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 the worst decline among industry groups. Other equities closely tied to economic activity, such as travel, cars and real estate, also tumbled.

Chinese technology shares slumped again, this time after a regulator released draft rules banning unfair competition among China’s online platform operators. In New Zealand, officials said they are 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 below 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.

Here are some events to watch this week:

• US Fed Chair Powell hosts a town hall discussion with educators Tuesday
• China’s top legislative body, the National People’s Congress Standing Committee, begins a four-day meeting in Beijing Tuesday
• US retail sales are due Tuesday
• Reserve Bank of Australia minutes are scheduled to be released Tuesday
• Reserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr Wednesday
• FOMC minutes released Wednesday
• Bank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 8:38 a.m. London time
• Futures on the S&P 500 fell 0.5%
• Futures on the Nasdaq 100 fell 0.4%
• Futures on the Dow Jones Industrial Average fell 0.5%
• The MSCI Asia Pacific Index fell 1.1%
• The MSCI Emerging Markets Index fell 1.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro was little changed at $1.1770
• The Japanese yen was unchanged at 109.24 per dollar
• The offshore yuan fell 0.2% to 6.4860 per dollar
• The British pound fell 0.3% to $1.3811

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 two basis points to 0.56%

Commodities

• Brent crude fell 0.7% to $69.01 a barrel
• Spot gold rose 0.4% to $1 793.86 an ounce