|Day's range||12,778.66 - 13,132.04|
|52-week range||11,266.48 - 13,795.24|
Commuter traffic was gradually increasing in Beijing on Monday (February 24) as more residents returned to work after weeks of quarantine in their own homes. But the number of coronavirus cases in the city jumped. Meanwhile South Korea was put on high alert as the number of infections there jumped to 763. And the number of cases and deaths in Europe and the middle east rose. Analysts described the latest developments with the virus as 'game-changing'. Sending shockwaves around global markets, with investors fleeing for safe-haven gold, up over two percent in early trade. European shares took a beating, with Italy plunging more than 4% after the spike in cases left parts of the country's industrial north in virtual lockdown. That put Milan on course for its worst day since 2016. Arthur Brunner is a fixed income specialist at ICF bank: (SOUNDBITE) (German) DIRECTOR SPECIALIST FIXED INCOME AT ICF BANK, ARTHUR BRUNNER, SAYING: "The DAX had a very weak start into the new week. The coronavirus and especially its spread to Europe put the markets into a state of shock. Markets across the globe are clearly taking hits. The DAX is currently down 3.3% and in Asia too, losses were similar. There is a fear that the coronavirus will lead to a permanent weakening of the world economy." The European STOXX 600 wiped off all its 2020 gains. And London-listed stocks saw $50 billion knocked off companies' market value. Travel, tourism and luxury stocks continue to be among the worst hit from the health crisis. As well as sectors that rely on China for their supply chains.
The majors are set for a positive start to the day off the back of Monday’s slide. Stats will need to support, however…
While the global markets are seeing an extreme level of volatility to start the new week, EUR/USD is confined in a relatively tight range, holding close to a nearly 3 year low.
The majors are set up for a slide at the open, with coronavirus news weighing heavily on risk appetite. Stats will play second fiddle today.
It’s another busy week ahead. The continued spread of the coronavirus and last week’s dire PMI numbers out of the U.S could get things off to a bad start…
Equities retreat following a surprise pullback in U.S. markets on Thursday. The risk of a coronavirus-driven market correction grow daily.
The European majors are set to open in the red ahead of prelim February private sector PMI numbers that aren’t likely to support…
Futures point to a bullish start to the day for the majors. Monetary policy support from the PBoC is expected, with no stats out of the Eurozone to spook the majors.
The futures point to the red as the markets react to Apple’s profit warning. German business sentiment figures will be another test later today.
The euro showed broad-based weakness last week but the momentum has slowed and EUR/USD is seen falling into a consolidation near lows not seen since 2017.
It could be a testy day ahead. While COVID-19 numbers reflect a slowdown in the number of new cases, the economic outlook looks bleak.
It’s a busy week ahead, with private sector PMI numbers likely to reflect the impact of COVID-19 on economies. Falling cases should soften the blow, however.
Economic data and COVID-19 updates will influence. Weak numbers out of Germany and negative sentiment towards growth is a bad combination.
Equity markets plunge after China upped the number of coronavirus cases and deaths, this outbreak is far more impactful than investors realize.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Germany’s DAX Index racked up another record high on Wednesday as virus fears faded and China pledged to meet its economic targets. Despite some profit warnings, German stocks are far removed from the drama of last year, while domestic political wobbles have been brushed aside so far. But tomorrow’s GDP numbers may give an indication on the recent health of Europe’s biggest economy, while the impact of the coronavirus still lies down the road.So far, the earnings season hasn’t been great for the nation’s stocks. After about 20% of companies from the broader HDAX reported for the quarter, Bloomberg data show that earnings missed to the downside by an average of 5.9%. On a more positive note, the profit warning story count is much quieter than during the three previous periods.But as a total-return index, the DAX includes dividends, which can be vulnerable -- as luxury-car maker Daimler AG illustrated this week. The recent records for the benchmark look far less impressive when you strip out such payouts. Indeed, the DAX Price Index (DAXK) is still 5% below its 2018 record high and has failed multiple times in recent years to durably overcome its 2000 peak.What’s more, recession risks are rising. Germany’s economy is expected to have grown 0.1% in the fourth quarter, but some economists see a contraction. Given the surprise drop of France and Italy’s GDP at the end of 2019, the low expectations suggest there’s a limited buffer against the prospects of a downturn.For Germany the following applies: incoming factory orders are still descending and the indicator for further industrial production planning determined by the OECD is pointing downwards, says VP Bank AG Chief Economist Thomas Gitzel. Both indicators are part of his euro-area recession indicator, which continues to climb.Then there’s the virus. The DAX members generate 20% to 25% of their revenue from emerging markets, according to Barclays Plc strategist Emmanuel Cau, with a large majority from China. The viral outbreak increases downside risks for activity and earnings, with Europe not immune as it is “highly exposed to Chinese demand, supply chains and tourism,” he saysWhile consensus puts earnings growth for the DAX at 13% this year and 12% next year, the bigger problem might be that “companies will again have to revise their outlook repeatedly in 2020,” DZ Bank AG strategist Christian Kahler writes in a note.Within the German gauge, Adidas AG, Infineon Technologies AG and BMW AG are among stocks with the biggest revenue exposure to China. Adidas could be a stock to watch as its supply chain is also heavily exposed, with 27% of factories located in China, while the country accounts for 22% of the group’s sales, Mainfirst estimates. Citi cut its forecasts this week, while the shares have barely recovered from their 10% drop since the virus crisis escalated in mid-January.As a consequence, index earnings forecasts could fall, leading to a further rise in valuation, which is already trading above the 15-year average. “Buying shares just because of a perceived lack of alternatives is not recommended,” Kahler adds.As for the impact on GDP, Deutsche Bank AG economists even forecast a 0.2 percentage point impact on German growth from the coronavirus. Given the current low growth path, it makes a technical recession “absolutely possible,” they say.To contact the reporters on this story: Michael Msika in London at firstname.lastname@example.org;Jan-Patrick Barnert in Frankfurt at email@example.comTo contact the editors responsible for this story: Blaise Robinson at firstname.lastname@example.org, Jon MenonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.