Stock index futures pointed to big losses on Wednesday as the markets remained highly volatile with the government response to the coronavirus fallout still unfolding.
At about 1 am (US time), or 13:00 THAILAND time, the Dow Jones Futures slipped 821 points (3.94%) to 20,039 points, indicated a more than 1,000-point loss of The Dow Jones at Wednesday’s open.
The S&P 500 index futures also lost 92 points (3.7%) to 2,393.5 points, while the Nasdaq Future dropped 328 points (4.44% respectively) to 7,064.25 points.
Futures contracts for all three indices were in “limit down” territory, a situation where trading is halted after futures have hit a 5% loss and can go no lower.
The recent overnight trading of futures contracts has seen unusual volatility, leaving many investors to believe computer trading has exaggerated moves in the market’s collapse stemming from the coronavirus outbreak.
The movement comes amid historic highs on the Cboe Volatility Index, which closed above its 2008 financial crisis peak on Monday.
On Tuesday, the markets rebounded from their deepest rout since 1987 as investors grew hopeful that the Trump administration’s massive fiscal stimulus plans will rescue the economy, which is at risk of falling into a recession due to the coronavirus impact.
The White House is weighing a fiscal package of more than $1 trillion that includes direct payments to Americans and financial relief to small businesses and the airline industry. Treasury Secretary Steven Mnuchin also said separately at a press conference that corporations will be able to defer tax payments of up to $10 million while individuals could defer up to $1 million in payments to the Internal Revenue Service.
Mnuchin told Republican senators that unemployment could reach 20% if Congress doesn’t enact the trillion-dollar stimulus package he proposed, CNBC reported Tuesday evening, citing a source familiar with the matter.
The Dow soared more than 1,000 points on Tuesday to cap off another volatile session, making back less than half of Monday’s steep losses. The S&P 500 also gained 6%.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for four consecutive. This tops the previous record of six days from November 1929, according to LPL Financial.
Australian stocks slid over 6%, the biggest drop in Asia
Shares in the Asia Pacific mostly fell in another day of turbulent trade on Monday as the rapidly spreading coronavirus outbreak globally continued to weigh on investor sentiment.
South Korea’s Kospi also saw significant losses as it dropped 4.86% to close at 1,591.20 while the Kosdaq index plunged 5.75% to 485.14. Hong Kong’s Hang Seng index was also 3.49% lower.
Meanwhile, shares in mainland Chinese, The Shanghai composite fell 1.83% to about 2,728.76. The Shenzhen composite declined from 1.554% to around 1,678.25.
In Japan, the Nikkei 225 shed earlier gains as it dropped 1.68% to close at 16,726.55 while the Topix index ended its trading day 0.19% higher at 1,270.84.
Overall, the MSCI Asia Index (excluding Japan) fell 3.25%.
According to data released by Japan’s Ministry of Finance on Wednesday, this country’s February export fell 1% compared to the same period last year, lower than the forecast of a sharp 4.3% drop from economists participating in the survey of Reuters.
