From CNBC: Dow futures tumble more than 1,000 points as all-out oil price war adds to coronavirus stress; 10-year Treasury yield drops below 0.5%.
Stock futures tumbled in overnight trading Sunday as investors continued to brace for the economic fallout from the spreading coronavirus, while a shocking all-out oil price war added to the anxiety.
Futures on the Dow Jones Industrial Average plunged 1,076 points, pointing to a more than 1,100-point loss at Monday’s open. The S&P 500 futures and Nasdaq-100 futures also indicated significant losses at Monday’s open. The sharp declines in the futures market signaled more turbulence ahead after a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight.
Amid the market turmoil, investors continued to seek safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note briefly dropped below 0.5%, before recovering slightly to last trade at 0.5533%.
Oil plummets 30% as OPEC deal failure sparks price war.
il prices plunged 30% in early trading after OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production, leading to fears of an all-out price war.
International benchmark Brent crude futures plummeted 30% to $31.02 per barrel, its lowest level since Feb. 2016. U.S. West Texas Intermediate crude dropped 27% to $30 per barrel, also its lowest level since Feb. 2016.
“This has turned into a scorched Earth approach by Saudi Arabia, in particular, to deal with the problem of chronic overproduction,” Again Capital’s John Kilduff said. “The Saudis are the lowest cost producer by far. There is a reckoning ahead for all other producers, especially those companies operating in the U.S shale patch.”
