Fred Imbert, Jesse Pound, Eustance Huang
U.S.
stock index futures indicated a lower open on Tuesday after a statement
by the G-7 failed to assuage investor concerns over how the biggest
global economies will curb the economic impact of the coronavirus .
As of 7:39 a.m. ET, Dow Jones industrial Average futures indicated a drop of about 136 points at the open. Futures on the S&P 500 and Nasdaq 100 also pointed to a decline.
The G-7 said in a statement they will use policy tools to curb an economic slowdown. However, the statement contained no specific actions.
Thepremarket moves follow a roaring comeback rally in the previous session that saw the Dow post its biggest percentage gain since March 2009. The index also recorded its largest-ever point surge on Monday.
The Group of Seven industrial powers is expected to issue a statement on counteringeconomic the impact of the coronavirus outbreak. However,
Reuters cited a G-7 official with direct knowledge of the deliberations
saying that the statement does not include any specific call for new
government expenditure or coordinated interest rate cuts by central
banks.
Earlier, CNBC’s Steve Liesman had reported that Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will lead a G-7 call on Tuesday at 7 a.m. ET. That will be a “coordinating call” for the financial and economic response to thecoronavirus , a source familiar
told CNBC. A group statement will be sent after the call.
The Reuters report came as markets had gotten a boost earlier this week amid investor expectations of big central bank stimulus over the coming days to boost the economy and markets.
The Reserve Bank of Australia announced on Tuesday a cut in its cash rate by 25 basis points to 0.5%, a new record low.
In a statement announcing the decision, the Australian central bank’s governor acknowledged that thecoronavirus outbreak overseas is having a
“significant effect” on the country’s economy and said the move to ease
monetary policy was done to “provide additional support to employment
and economic activity.”
As of 7:39 a.m. ET, Dow Jones industrial Average futures indicated a drop of about 136 points at the open. Futures on the S&P 500 and Nasdaq 100 also pointed to a decline.
The G-7 said in a statement they will use policy tools to curb an economic slowdown. However, the statement contained no specific actions.
The
The Group of Seven industrial powers is expected to issue a statement on countering
Earlier, CNBC’s Steve Liesman had reported that Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will lead a G-7 call on Tuesday at 7 a.m. ET. That will be a “coordinating call” for the financial and economic response to the
The Reuters report came as markets had gotten a boost earlier this week amid investor expectations of big central bank stimulus over the coming days to boost the economy and markets.
The Reserve Bank of Australia announced on Tuesday a cut in its cash rate by 25 basis points to 0.5%, a new record low.
In a statement announcing the decision, the Australian central bank’s governor acknowledged that the
Monday saw U.S. stocks snap a
losing streak that had gone on for over a week. Some investors are
skeptical that the rally has legs without a significant central bank
response. Even if that comes to fruition, investors have their doubts
the market has seen the end of its tumultuous trading of the last six
days.
Jeff Mills, the chief investment officer at Bryn Mawr Trust, said on “Power Lunch” that he was not advising clients to buy back into the market and that Monday’s rally was just a “technicalsnapback .”
“I think the spectrum of outcomes is so wide here that one trading day is not going to resolve all of our issues, so we’re telling our clients just to sit tight for now,” Mills said.
The U.S.stock market saw
a historic bounce back on Monday, with the Dow gaining nearly 1,300
points. The Dow finished up 5.1% on the day, while the S&P 500
gained 4.6%.
Some expect central banks around the world to
announce a coordinated policy response to fight the Jeff Mills, the chief investment officer at Bryn Mawr Trust, said on “Power Lunch” that he was not advising clients to buy back into the market and that Monday’s rally was just a “technical
“I think the spectrum of outcomes is so wide here that one trading day is not going to resolve all of our issues, so we’re telling our clients just to sit tight for now,” Mills said.
The U.S.
Futures traders are expecting aggressive action from the Federal Reserve in particular, with the CME Fed Watch tool showing that the market has priced in 75 basis points of cuts through April.
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