U.S. stock futures fell Monday as investors questioned whether fresh outbreaks of the coronavirus could hold back the global economic recovery.
Stock futures tied to the Dow Jones Industrial Average fell 2.5%, suggesting U.S. markets could open lower. In Europe, the pan-continental Stoxx Europe 600 dropped 1.3%, with German and French indexes leading losses in the region. Stocks in Asia closed lower, with the Japanese Nikkei Stock Average down nearly 3.5%.
Chinese authorities shut down parts of Beijing, after the capital recorded a record number of new coronavirus infections tied to a meat and vegetable market. A prolonged disruption could interrupt the country’s nascent economic recovery.
Several U.S. states including Arizona, Texas and Arkansas reported increased numbers of cases in the past week. Confirmed coronavirus cases in the U.S. surpassed 2 million last week, driven in part by surges in more than a dozen states.
“The timeline for the virus is being extended. It’s becoming clear that it’s a choice of allowing economies to open and take the public health hit, or lockdown countries and take the economic hit,” said Edward Park, deputy chief investment officer at Brooks Macdonald, a London asset-management firm.
Data from China published Monday showed economic activity improved in May, but retail sales figures weren’t as strong as some had hoped. Consumers will continue to be wary given the fresh outbreak in Beijing, Miguel Chanco of Pantheon Economics said.
Oil prices dropped Monday amid fears new cases of the virus could weigh on economic recoveries and energy demand. Futures contracts tied to U.S. crude fell 1.4% at $35.76 a barrel. Brent crude, the global benchmark for oil prices, dropped 0.4% to $38.58 a barrel. Last week it snapped a six-week streak of advances, declining 8.4%.
Among individual stocks, BP PLC fell 4.2% after it wrote down up to $17.5 billion of its assets and revised its long-term expectations for oil prices to $55 a barrel from $70 a barrel.
Investors edged into safer assets, with government bonds rallying, sending yields lower. Bond prices rise when yields fall. The yield on the 10-year U.S. Treasury note fell to 0.677%, according to Tradeweb, from 0.698% Friday.
Currency markets reflected a flight to havens as traders preferred the dollar over riskier currencies. The WSJ Dollar Index rose 0.1% to 91.47, putting it on pace for its third straight session of gains. The index, which measures the dollar against 16 other currencies, last Wednesday hit 90.41, its lowest end-of-day level since March 9, but has since rebounded.
U.K. Prime Minister Boris Johnson is set to join a conference call with European Union leaders Monday to discuss the future of post-Brexit trade. A failure to reach an accord could result in tariffs being imposed on goods, and major disruption to supply chains, when the interim agreement between the U.K. and EU expires at the end of the year. Sterling was down slightly against the dollar, buying $1.254.
Health authorities have shut parts of Beijing amid a record number of new Covid-19 infections there.
Photo: noel celis/Agence France-Presse/Getty ImagesWrite to Anna Isaac at anna.isaac@wsj.com and Joanne Chiu at joanne.chiu@wsj.com
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June 15, 2020 at 05:12PM
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Global Stocks Slide on Fears Over Fresh Virus Outbreaks - The Wall Street Journal
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