SECTOR TALLY: Five of the 10 sectors in the S&P 500 index moved lower, with energy and telecommunications services stocks posting the biggest decliners.
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Jonathan Niles, foreground right, works at the New York Stock Exchange, Tuesday, Feb. 9, 2016. Asian stock markets fell for a third consecutive day Wednesday, beset by nerves about shaky global growth, fall…
Traders were encouraged early Wednesday by word from Federal Reserve Chair Janet Yellen that the central bank will be cautious about raising interest rates. The CAC-40 in France was 2.1 percent lower at 3,981.
Deutsche Bank’s (NYSE:DB) comments yesterday disrupted market movement as the bank said that it has sufficient reserves to honour bond payments until the end of this year. Asked if the Fed might consider cutting rates if the economy faltered, Yellen said she did not expect such a move.
Stocks in the US have opened strongly, taking their cue from a buoyant performance in Europe.
Meanwhile, crude oil prices were in green, with the WTI crude trading 2% higher at US$ 28.50/bbl and Brent Crude at US$ 31.30/bbl, up 2.34%.
Weidmann said “the volatility of the financial markets that we are observing now expresses uncertainties in terms of cyclical risks…”
In her semiannual report to Congress Wednesday, she noted the widening fallout from concern over China’s weaker currency and economic outlook, which has rattled financial markets.
Ahead of that, Wall Street was set for a solid opening, with Dow futures up 0.7 percent.
Asian stocks dipped early on Wednesday amid smoldering banking sector concerns, particularly banks in Europe, while the safe-haven yen stood atop large gains made overnight.
Futures markets are predicting a 0.8 percent rise for the Dow stock index at the open and a 1 percent advance for the broader S&P 500 index.
Neil Mackinnon, global macro strategist at VTB Capital, said the trading week has started with a firm “risk-off” mood, with European banks in the spotlight given high levels of non-performing loans, especially among the Italian banks. In December, the Fed raised interest rates for the first time in almost a decade and indicated that further increases, possibly as soon as March, were in the offing. Japan’s TOPIX had its biggest two-day drop since August past year as the yen strengthened and margin calls sparked a further selloff. The market’s bumpy ride followed a slide in European stock indexes and steep losses in Japan, reflecting mounting investor anxiety that the global economy is slowing.
The bank has seen its share price tumble this year amid concerns over its financial position. Consol Energy lost 88 cents, or 10.2 percent, to $7.68, while Southwestern Energy fell $1.08, or 13.6 percent, to $8.26.
ASIA’S DAY: Japan’s Nikkei index tumbled 5.4 percent and the interest rate on the country’s benchmark bond dropped into negative territory for the first time. The Nasdaq composite added 51 points, or 1.2 per cent, to 4,319.
US stocks extended their three-day losing streak Tuesday, closing slightly lower after spending most of the day wavering between gains and losses. Most analysts and investors think the Fed will raise rates fewer than four times this year, if at all.
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Stock markets have endured a torrid start to the year as investors have fretted over a number of issues, including the fall in the price of oil to multi-year lows, a slowdown in China and whether many parts of the global economy will fall into recession and suffer a debilitating period of deflation, or falling prices.
