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Top 5 Things to Know in the Market on Friday, February 28th

EconomyFeb 28, 2020 06:36AM ET
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© Reuters.

By Geoffrey Smith

Investing.com -- The coronavirus continues to spread across the world, as the number of confirmed cases jumps again in South Korea and Iran. Sub-Saharan Africa also contirms its first case. Asian and European stock markets fall sharply in the wake of Wall Street's Thursday panic, while Brent crude dips briefly below $50 a barrel. The Bundesbank acknowledges a likely hit to the German economy. The Turkish and Russian currencies weaken as the two countries come close to direct confrontation in Syria. And there are also U.S. household income data due. Here's what you need to know in financial markets on Friday, February 28th.

1. Coronavirus triggers emergency measures around the world

The coronavirus outbreak spread more broadly around the world, causing more heavy selling in equity and commodity markets worldwide.

South Korea, the biggest hotspot outside China, reported another 571 cases, while Iran, which has been slow to impose travel and work restrictions on its population, reported another 143 cases.

The virus has also reached sub-Saharan Africa, with Nigeria confirming its first case. The northern Japanese island of Hokkaido declared a state of emergency, while quarantines and school closures spread across Germany. Neighboring Switzerland, meanwhile, has banned all public events with over 1,000 participants – meaning the cancellation of this year’s Geneva Auto Salon.

2. Panicked selling in global markets continues, then eases

The panic in global financial markets showed tentative signs of easing, but not before another hefty write-down of risk assets and mark-up of havens.

Asian stock markets fell sharply, while Europe’s bounced off intra-day lows but were still down by anything between 2.2% and 3.2% by midday in Europe, after what is now becoming a regular routine of profit warnings from companies.

Brent crude hit a three-year low before bouncing back above $50 a barrel, after profit warnings from two of Europe’s biggest airline groups that, like many others this week, were all the more concerning because of their vagueness.

The 10-year U.S. Treasury yield fell to a new record low of 1.17% before returning to 1.19%. Gold futures gave up some of their recent stellar gains.

3. U.S. stocks set for lower opening, but off overnight lows

U.S. stock markets are set to extend losses at opening, although with many indicators suggesting that markets are heavily oversold in the short term, some will be hoping for a bounce going into the weekend.

By 6:30 AM ET (1130 GMT), the Dow futures contract was down 217 points or 0.9% at 25,334 points. The S&P 500 futures contract and the Nasdaq 100 contract were both down 0.8%.

One stock likely to be in focus in early trade is Cisco Systems (NASDAQ:CSCO), which – according to The Wall Street Journal – is planning a new round of lay-offs ‘because of global economic uncertainty.’

On the data front, there will be data on personal consumer expenditures and personal income at 8:30 AM ET (1330 GMT).

4. Bundesbank sees virus hitting German economy

The German economy is likely to grow more slowly than forecast this year due to the coronavirus, Bundesbank President Jens Weidmann warned.

“If it comes to an epidemic in Germany then…direct economic effects are to be expected,” Weidmann told a press conference. However, he said there was no immediate need for the ECB to act.

Markets are unconvinced: they’re pricing in another 10 basis point cut in the ECB’s deposit rate after weaker-than-expected inflation numbers from France and Italy this morning. Germany, meanwhile, recorded a surprise drop of 10,000 in seasonally-adjusted jobless earlier Friday.

5. Lira, ruble weaken as Turkey and Russia square off in Syria

The Turkish and Russian currencies weakened after the two countries came closer to direct conflict in Syria.

The ruble fell as low as 67.23 to the dollar, its lowest since January 2019, while the lira weakened to 6.26 to the dollar, a nine-month low. Both have in any case been caught up in the general rout of higher-yielding currencies since the coronavirus oubreak exploded.

Over 30 Turkish soldiers died in an airstrike in the Idlib region on Thursday that reports attributed to the Russian air force, which commands the skies over Syria. Russia is helping President Bashir al Assad’s forces to crush the last remaining pocket of resistance to his rule.

Top 5 Things to Know in the Market on Friday, February 28th
 

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Comments (9)
Albert Perez
Albert Perez Feb 28, 2020 3:28PM ET
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Guy with the hat *******it in the market since he's shorting and heading to 20,000! lol
Oil Merchant
Oil Merchant Feb 28, 2020 1:13PM ET
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Dow almost 20000. Yeah!
Chris Sundo
Chris Sundo Feb 28, 2020 8:32AM ET
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China's Xi did the same vanity thing as Japan's Abe. Both leaders short-changed the duty they had to the citizens and foreign tourists who placed themselves into the care of those leaders when those vain leaders suppressed the urgency of segregating patients, testing for the virus and treating the patients. And both leaders, instead looked towards long-planned festivities (Xi) and the upcoming Olympics (Abe) and thus both leaders condemned the affected virus victims to disease and death. Bad, bad leaders who committed a felony each of them. And the whole world has now to take the brunt of the NEGLIGENCE BY China's XI and Japan's ABE.
Lawrenti Berija
Lawrenti Berija Feb 28, 2020 8:27AM ET
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please remove this picture. I can't stand the ugly face of that 30 k hat guy
Al Heindel
Flyer Feb 28, 2020 8:27AM ET
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It actually says “Dow Almost 20K”.May head back there? 😳
Lawrenti Berija
Lawrenti Berija Feb 28, 2020 8:27AM ET
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, ok my bad. the pic must be several years old....
Travis McCalgan
Travis McCalgan Feb 28, 2020 8:27AM ET
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Al Heindel  I know right lol
Chris Sundo
Chris Sundo Feb 28, 2020 8:18AM ET
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'..The northern Japanese island of Hokkaido declared a state of emergency..' This is BECAUSE JAPAN'S ABE HAS DECREED TO SUPPRESS TESTING SO THAT THE OFFICIAL VIRUS INFECTION TALLY REMAINS ARTIFICIALLY lower AND WON'T WORRY FUTURE OLYMPIC ATTENDEES, thus causing more people becoming infected which could be avoided with proper testing, thus causing infected people needing to return to their home states to become tested and treated. 'Mr. Abe: Bad games you are playing with people entrusted into your care! You did the same with the Yokohama cruise ship whom you denied the truth after you were briefed with the case of the old man who disembarked from the cruise in Hong Kong as patient number zero. You kept the cruise liner in the dark for 5 days when they could have initiated segregation and treatment, all for what Mr. Abe? All for your vanity to reduce the statistics for the official cases of infection for future Olympic attendees to come to your country and trust you with their presence.
Mary Kinney
Mary Kinney Feb 28, 2020 8:18AM ET
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lots of blame to go around here... including ....
Chris Sundo
Chris Sundo Feb 28, 2020 8:05AM ET
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'..South Korea, the biggest hotspot outside China..' The bad luck thing for South Korea's current reputation is that their whole outbreak there is related to a dooms-day cult that has a branch location in Wuhan. The cult leader's brother was the Wuhan leader, and when that bro died, his funeral took place in the basement of a mental hospital in South Korea and was heavily attended by the Wuhan congregation who infected eventually all of the patients in the South Korean mental hospital. The doomsday cult believes in the immortality of the members of the cult when the people around the cult start dying. Ironically the infected doomsday cult members are now dying now while the people around the cult remain alive.
Deepak Mehta
DMEHTA Feb 28, 2020 7:58AM ET
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This guy is a paid pumper . All he isbdoingis wrting words algosbcan read and pumpt but he will be dumped
Chris Martin
Chris Martin Feb 28, 2020 7:58AM ET
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Agreed, and HE speaks odd mental hospitals....
Chris Martin
Chris Martin Feb 28, 2020 7:58AM ET
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He belongs in a mental hospital !
Heine Pedersen
Heine Pedersen Feb 28, 2020 7:34AM ET
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What's happening to precious metals?? Gold down 1,5%, Silver 4% and Platinum 3,5% as I write this. This is not normal trading. What's going on??
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Randy Gomez
Randy Gomez Feb 28, 2020 7:34AM ET
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deflation coming
Heine Pedersen
Heine Pedersen Feb 28, 2020 7:34AM ET
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Gregory Campbell  Not when the dollar is down and stock indices crashing.
Lawrenti Berija
Lawrenti Berija Feb 28, 2020 7:34AM ET
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probably shakeout - like in december 15/ Jan 16 except that it then was the end of a downtrend. I'm not able nor willing to se an advantage to hold cash now. maybe I have to sacrifice my gains but fundamentally I can't see any reason to give up my metals or miners...
Lawrenti Berija
Lawrenti Berija Feb 28, 2020 7:34AM ET
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Samantha Solomon
Samantha Solomon Feb 28, 2020 7:34AM ET
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I asked my mentor the same in 2001 when the market was crashing in the days after 9/11. With 50 years trading experience, he explained that when a cataclysmic event occurs, everything sells.  During that time too, I remember gold was already emerging a long term bottoming pattern. This pattern became strengthened and reinforced in the following months and years culminating into an impressive bull run 2005 - 2010.
Rob Mac
Rob Mac Feb 28, 2020 7:30AM ET
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Top 5 things...? 1. Virus 2. Virus 3. Market oversold? 4. Virus 5. Turkey vs. Russia. Did I miss anything?
Josh Toman
Josh Toman Feb 28, 2020 7:30AM ET
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6) virus
Chris Sundo
Chris Sundo Feb 28, 2020 7:30AM ET
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Josh Toman   6 things out of 5
RYAN ALESSANDRO
RYAN ALESSANDRO Feb 28, 2020 7:30AM ET
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Don't forget about 7... also virus, so five tHINGS (VIRUS)out of 7. Rob Mac's alma mater...math technical technician operation of mathupial appraisals, ( pick 2 apples take one away) University. six out of HUH!?!
 
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