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U.S. Futures Rise Amid Election Results; Yen Slips: Markets Wrap

Wednesday 4th March 2020

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U.S. stock futures rebounded after Tuesday’s sharp decline, and the yen dipped, as investors took in early Super Tuesday election results alongside the Federal Reserve’s emergency interest-rate cut. Treasuries pared gains.

Early wins by Joe Biden lessened the chance of the Bernie Sanders nomination that had unsettled some investors. Futures on the S&P 500 rose more than 1% after the index tumbled almost 3% in wake of an emergency 50 basis-point Fed move that failed to ease concerns about an economic downturn. Asian stocks were volatile as declines in Australia offset gains in South Korea, while Japanese, Chinese and Hong Kong shares fluctuated. Ten-year Treasury yields stayed below 1% after falling below that level for the first time Tuesday.

Biden, positioned as a moderate against a more progressive Sanders, nabbed early wins in Virginia, North Carolina, Tennessee, and Alabama as the Super Tuesday results rolled in. But states with polls closing later, such as Texas and California, could still aid Sanders.

“Biden would be a less severe change for markets that already have enough to worry about, with all these external shocks,” said Jerry Braakman, chief investment officer of First American Trust, in Santa Ana, California. “Sanders would bring a lot changes that markets wouldn’t necessarily like.”

Equities earlier had tumbled after Fed Chairman Jerome Powell warned that the virus outbreak will weigh on activity “for some time.” Expectations the Fed may act again as soon as this month show markets remain extremely cautious about the economy’s prospects to weather the hit.

(Bloomberg)



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