Global Markets Edge Lower, Coronavirus Still Centerstage, Mixed Data Clouds Sentiment

The U.S. Futures Are Dow In Early Trading

The U.S. futures are indicating a lower open for the major indices in early Friday trading. The Dow Jones Industrial Average and S&P 500 are both down about -0.40% in the premarket session, the NASDAQ Composite about -0.30%. Sentiment is dampened by the coronavirus outbreak that continues to spread. There are now 9700 confirmed cased globally with the first two showing up in India. The number of deaths has risen to 213 and is expected to rise.

Aside from the risk to global health, traders are concerned about the risk to the global economy. China has already clamped down on travel and other countries are doing the same. yesterday, the WHO declared a Global Health Emergency so we can expect travel to be curtailed globally. Companies like Starbucks and Caterpillar are already warning investors about possible impact to earnings and other risks.

In earnings news, Amazon smashed expectations for revenue and earnings. The company reports solid increases in YOY sales and notable strength in the Amazon Web Services segment. Shares are up 11.0% on the news. Caterpillar also reported better than expected earnings but shares fell when it warned investors about 2020 outlook. Inflation data shows the U.S. consumer ended 2019 on solid footing. Personal income rose 0.2% and spending 0.3% adding upward pressure to YOY comparisons.

European Markets Are Down At Midday

The EU markets are down at midday on concerns the coronavirus will continue to spread. There are now two cases in the UK as well.  The DAX and FTSE are both down about -0.35% to -0.40% while the FTSE lead with a loss of -0.75%. The FTSE is under added pressure because of today’s Brexit. After 3.5 years of political wrangling and uncertainty, the landmark event has arrived. The Brexit occurs tonight at 11 PM London time.

In stock news, basic resources and energy are leading on a sector basis with declines of -1.0%. All sectors are moving lower but today’s biggest loser is Banco de Sabadell. The bank reported a surprise loss in the 4th quarter and sent shares plummeting. At the other end of the spectrum, Danske Bank shot up by 5.7% on word the U.S. will have a hard time levying fines against it.

Asian Markets Are Mixed, China Still Close

Asian markets are mixed at the end of the day on Friday. The Hong Kong Hang Seng and Korean Kospi are both down, -0.52% to -1.35%, while the Nikkei and ASX are both moving higher. The Nikkei is the strongest performer with an advance of 0.99% on strength in tech. Shares of Tokyo Electronics are leading the surge with a gain of 2.3%. In China, official PMI figures show the manufacturing economy neither grew nor contracted in December because PMI is 50.0.