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TOKYO / WASHINGTON: U.S. equity futures extended losses on Friday after President Donald Trump said he and his wife had tested positive for the coronavirus, weeks before the election.
S&P 500 futures fell 1.21% in the early afternoon in Asia, while Treasury yields also fell.
The US dollar rose, particularly against the British pound, Australian and New Zealand dollars, in a sign of risk aversion.
Trump previously said on Twitter that he and his wife had been tested for the coronavirus after Hope Hicks, a senior adviser who recently traveled with the president, tested positive.
Later, he tweeted that he and the first lady tested positive: “We will begin our quarantine and recovery process immediately,” he said.
Trump’s positive could spark a new wave of volatility in the market as investors gear up for the tight November presidential election.
“It has the potential to reduce Trump’s campaign capacity. It has a lot of things and it is a disruption,” said Sean Callow, currency strategist at Westpac in Sydney.
“It also hurts when it comes to the whole narrative that there’s really not much to worry about, it puts the COVID crisis itself front and center.” MSCI’s broader Asia-Pacific stock index outside of Japan fell 0.27%. Australia’s S & P / ASX 200 Index fell 0.98% as a drop in oil and copper prices hit the country’s resource sector.
Japan’s Nikkei 225 Index erased gains and fell 0.69% as the Tokyo Stock Exchange resumed normal trading after its worst disruption in history paralyzed the world’s third-largest stock market.
Euro Stoxx 50 futures were up 0.06%, German DAX futures were up 0.03%, but FTSE futures were down 1.02%.
Markets had been choppy at first after a series of data, including unemployment claims and consumer spending, suggested that the slow US economic recovery could be losing steam.
High-tech Nasdaq futures fell 1.7%. The benchmark yield on 10-year Treasuries fell to 0.6545%.
China’s equity and bond markets, commodity and currency futures markets are closed October 1-8 for the Golden Week holidays. The South Korean and Hong Kong markets are also closed on Fridays for holidays.
US markets began the fourth quarter closing higher on Thursday, while investors followed progress in negotiations for additional fiscal stimulus.
The Dow Jones industrial average rose 0.13% on Thursday. The S&P 500 gained 0.53% and the Nasdaq Composite added 1.42%.
US consumer spending is starting to slow down due to an unstable job market. If lawmakers cannot agree on more support, the US economy could lose more momentum.
Traders are also awaiting the Labor Department report on nonfarm payrolls and the unemployment rate later on Friday, following fresh layoff announcements from companies like Disney and Goldman Sachs.
The dollar index rose 0.3% on risk aversion.
Spot gold fell 0.55% to $ 1,894.60 an ounce, adding to its worst month since November 2016, while oil prices continued to decline, adding to a 10% drop in September.
Brent crude futures were down 0.93% at $ 40.54 a barrel on Friday, while US crude futures were down 0.98% at $ 38.34 a barrel.
Oil prices fell more than 3% on Thursday as rising coronavirus cases around the world clouded the outlook for demand, while an increase in output last month from members of the Organization of Exporting Countries Oil also pressured prices. – Reuters
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