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Markets Rebound, Wuhan Virus Spreads, Earnings Season Hits High Gear

The global markets are mixed, the focus is on the spreading coronavirus and its impact on economic activity.
Thomas Hughes
Corona Virus

The U.S. Futures Are Up In Early Tuesday Trading

The U.S. futures market is indicating a slightly higher open for the market on Tuesday. The tech-heavy NASDAQ Composite is in the lead with a gain of 0.45% but I wouldn’t trust it. New from China is the Wuhan Virus continues to spread. There are now more than 4500 infected and 106 dead. With cases in Japan, Southeast Asia, Korea, Australia, the EU, and the US it is certain both the number of infected and dead will rise.  The S&P 500 and Dow Jones Industrial Average are both up about 0.25%.

In stock news, reports from major S&P 500 companies are coming in fast and furious. This is the busiest week of the season, there are 147 S&P companies and 14 Dow Components. Shares of Pfizer, 3M and Harley Davidson are all moving lower after missing their consensus estimates or offering weak guidance. Harley Davidson is in the lead as weak sales in the U.S. dragged on results.

In economic news, durable goods orders came in well above expectation but there is a catch. The 2.4% headline figure beats the -0.2% expected but is up mostly only transportation-related spending. Ex-item’s, core business-spending is down -0.1%. Later in the session traders will be on the lookout for Consumer Confidence.

European Markets Up, Brexit Is In Sight (Almost)

The European markets are cautiously higher at midday on Tuesday. The CAC and FTSE are both up about 0.50% while the DAX lags with a gain of 0.40%. Telecoms are among the day’s biggest gainers with average advances of 0.80%. Tech is among today’s hardest hit with losses in the range of -1.10%.

In earnings news, shares of SAP and Burberry are trading lower after disappointing investors. SAP raised its revenue and earnings guidance but not enough to meet expectations and shares fell -2.7%. Burberry lost -3.5% on concerns of its exposure to Asia and the coronavirus.

In politics, the long-awaited Brexit is slated to occur on Friday. This is the first of two Brexit’s and paves the way to final negotiations. The UK is pushing for a free or near-free market environment while the EU negotiator says it won’t happen. According to him, the UK has underestimated the EU in that regard.

Asian Markets Falter As Virus Outbreak Spreads

Asian markets moved lower on Tuesday after the news China’s death count had risen. The South Korean Kospi, closed Monday for holiday, fell more than -3.0% while others shed less robust amounts. Japan’s Nikkei fell -0.55% while the Australian ASX fell -1.35%. Traders in Australia are worried about the impact to tourism markets, China is Australia’s #1 tourist market and traveling has been severely curtailed. Markets in China and Hong Kong remained closed for Lunar New Year.

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