Wall Street was poised for a rough start to the week Monday.
Angela WeissAFP/Getty ImagesWall Street was headed for a rough Monday, with futures for the Dow Jones Industrial Average down more than 500 points amid a broad fall in global stocks, as investors fretted over the implications of the looming failure of China’s Evergrande.
Dow futures were indicating an open around 530 points lower, after the index fell 166 points Friday to close at 34,585—marking three straight weeks of declines. Futures for the S&P 500 and Nasdaq indicated a similarly weak open.
Overseas, Hong Kong’s Hang Seng Index tumbled 3.3%, with the Hang Seng Properties index down 6.7%, while the pan-European Stoxx 600 declined 1.9%.
Investor attention is squarely focused on China, where the seemingly imminent failure of highly indebted property developer Evergrande looms large.
Global sentiment has been rattled by Evergrande, which has some $300 billion in liabilities, including debt obligations due this week—starting today—that it can’t pay. The group said Sunday it had begun repaying some of its investors with real estate.
Also read: Evergrande Has Debt Due This Week It Can’t Pay. Why It Isn’t Just China’s Problem.
“Contagion risks from the Evergrande meltdown are the prime cause of today’s selloff. You’ve got all kinds of banks and insurers caught in the net but ultimately, I don’t see this as a Lehman’s moment right now,” said Neil Wilson, an analyst at broker Markets.com. The bankruptcy of investment banking giant Lehman Brothers in 2008 is viewed as one of the catalysts of what became the 2008-09 financial crisis.
“What we are seeing today is how risks get priced gradually then suddenly. It is definitely though a major cause for investor concern right now and it is possible we see further losses before the dip finally gets bought,” Wilson added.
Analysts noted that thin liquidity—with markets closed in China, Japan, and South Korea for holidays—contributed to the selloff.
Cryptocurrencies also fell, with Bitcoin slipping near 7% to below $45,000, as crypto investors were caught up in spillover fears.
Separately, commodities tumbled after Chinese premier Li Keqiang said over the weekend that the country would work to stabilize commodity prices. China has in the past released strategic reserves of metals and oil into domestic markets in a bid to tame prices.
Continuous contract futures for copper fell 2.5%, platinum 1.7%, and palladium 2.2%. International benchmark Brent crude futures were down 2% to below $73.90 a barrel, with U.S. oil futures down 2.3% to around $70.30.
Evergrande concerns and a commodities slump come as a major decision from the U.S. Federal Reserve is due Wednesday. The central bank’s monetary policy-making body, the Federal Open Market Committee, will meet Tuesday and Wednesday before Fed Chair Jerome Powell makes a statement.
Investors are closely watching the Fed for clues as to how and when the central bank will begin slowing, or tapering, its Covid-19 pandemic-era program of monthly asset purchases, which add liquidity to markets. Indications that a taper will come sooner rather than later could cause markets to wobble even more.
“Whatever the Fed says on Wednesday tapering is a removal of accommodation,” said Andrew Brenner, a managing director at investment group NatAlliance Securities. “Fed is between a rock and a hard place but they have wasted a window of opportunity to start and end tapering and building some optionality.”
“This is the September correction we were worried about,” Brenner said.
Here are eight stocks on the move Monday:
Evergrande (3333.H.K.) fell a further 10.2% in Hong Kong, hitting an 11-year low during the trading session, as it faced bank loan interest due Monday and bond coupon payments set for Thursday.
Other Chinese property stocks suffered in Hong Kong. Sinic Holdings (2103.H.K.) halted trading after it plunged 87% while Henderson Land Development (12.H.K.) declined 13%. China’s largest insurer, Ping An (2318.H.K.), fell 5.8%—it is the insurance company most exposed to the property sector.
British insurer Prudential (PRU.U.K.) tumbled 8.3% amid plans to raise $2.9 billion in a Hong Kong share sale.
Shares in U.S. Covid-19 vaccine makers fell, as Pfizer (PFE) slipped 1.9%, with its German partner BioNTech (BNTX) down 4.8%, and Moderna (MRNA) declining 2.8%—all in U.S. premarket trading. A Food and Drug Administration advisory panel voted Friday to reject a broad rollout of vaccine booster shots.
Write to editors@barrons.com
"stock" - Google News
September 20, 2021 at 04:16PM
https://ift.tt/3lAQyTA
Stock Market Today: Dow Futures Fall More Than 500 Points as Evergrande Fears Mount - Barron's
"stock" - Google News
https://ift.tt/37YwtPr
https://ift.tt/3b37xGF
Bagikan Berita Ini
0 Response to "Stock Market Today: Dow Futures Fall More Than 500 Points as Evergrande Fears Mount - Barron's"
Post a Comment