Stocks, Futures Slump on Virus Curbs; Bonds Rally: Markets Wrap

Stocks and futures were a sea of red as a new strain of the coronavirus in the U.K. caused chaos ahead of the Christmas holiday, with regional neighbors suspending travel.

Energy and travel shares dragged the Stoxx 600 Index down more than 3% to its biggest drop since June, as Italy, the Netherlands, Belgium and France closed their borders to the former European Union state. The yield on the benchmark 10-year Treasury dropped six basis points and the dollar gained the most since March.

In the U.S., equity futures pointed to sharp losses at the open even after Congressional leaders reached a deal on roughly $900 billion of outlays to support the economy amid escalating virus cases. The House of Representatives is expected to vote on it on Monday.

Meanwhile, the pound slumped by the most since March as an official said “significant differences” remain in Britain’s trade talks with the European Union. Crude oil fell by more than 5%.

The emergence of the mutant strain of the virus in Britain is threatening to put a damper on year-end, as investors count down to the end of a chaotic 2020.

Despite positive news recently over vaccine rollouts and stimulus packages, the pandemic for now is overshadowing any optimism, with experts warning it’s unlikely to be eliminated any time soon. More than 16 million Britons are now required to stay at home as a full lockdown came into force in London and the southeast of England.

EIA crude oil inventory report is due Wednesday.
U.S. jobless claims, durables, personal income data comes Wednesday.
U.S. bond and stock trading and markets in other parts of the world will shut early on Thursday for the Christmas holidays. Most global markets are shut Friday.

Stocks
Futures on the S&P 500 Index sank 2.7% as of 11:00 a.m. London time.
The Stoxx Europe 600 Index dropped 3.4%.
The MSCI Asia Pacific Index dipped 0.8%.
The MSCI Emerging Market Index lost 1%.

Currencies
The Bloomberg Dollar Spot Index surged 1.2%.
The euro decreased 0.9% to $1.215.
The British pound sank 2.1% to $1.3237.
The onshore yuan weakened 0.3% to 6.555 per dollar.
The Japanese yen weakened 0.5% to 103.82 per dollar.

Bonds
The yield on 10-year Treasuries decreased six basis points to 0.88%.
The yield on two-year Treasuries fell one basis point to 0.11%.
Germany’s 10-year yield sank four basis points to -0.61%.
Britain’s 10-year yield sank eight basis points to 0.166%.
Japan’s 10-year yield climbed less than one basis point to 0.011%.

Commodities
West Texas Intermediate crude sank 5.9% to $46.22 a barrel.
Brent crude sank 5.4% to $49.45 a barrel.
Gold weakened 0.6% to $1,870.67 an ounce.

Stocks, Futures Slump on Virus Curbs; Bonds Rally: Markets Wrap, Bloomberg, Dec 21