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Contracts on the S&P 500 fell 0.6% as of 10:52 a.m. in Tokyo. Futures slumped 2.4% on Wednesday, with the underlying S&P 500 Index also dropping, after data showed factory output slid in March by the most since 1946 and retail sales tumbled by the most on record. A Federal Reserve report said the economy went into a defensive crouch due to the coronavirus.
“A spate of poor data and news, mostly out of the U.S., was primarily responsible for the risk-off environment,” said Kyle Rodda, a market analyst at IG Markets in Melbourne.“Market sentiment has flipped in the past 24 hours; for some, it’s a long time coming,”
The S&P 500 sank 2.2% from a one-month high in the cash market, with all of its major groups dropping. Financial shares slid as Goldman Sachs Group Inc (NYSE:GS).’s investment portfolio took a hit from the pandemic, while Bank of America Corp (NYSE:BAC). and Citigroup Inc (NYSE:C). followed rivals in setting aside billions for loan losses. Oil plunged to the lowest in nearly two decades.
President Donald Trump said he will unveil guidelines to relax stay-at-home rules on Thursday, citing signs that the outbreak is plateauing in parts of the country. Trump has been eager to ease social-distancing measures that have caused businesses nationwide to shutter, costing more than 16 million Americans their jobs in the past month.
“Investors are expecting economic activity to resume soon, as the virus appears to be peaking out,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “But we’re not in a situation where we can confidently rely on that hope. Markets have priced in bad economic data, and it remains susceptible to news flow.”
©2020 Bloomberg L.P.
