Fed’s Powell opens door to potential rate cuts at Jackson Hole
(Recasts with U.S. market open, byline; changes dateline;
previous TOKYO/SINGAPORE)
* Wall Street slides as investors brace for dour earnings
* Oil prices edge higher after output cut
* Minister says UK GDP could contract by 30% -Times
* China's export slump seen extending to March -Poll
By Herbert Lash
NEW YORK, April 13 (Reuters) - Stocks on Wall Street slid
while crude prices edged higher on Monday as a global deal on
record output cuts failed to quell concerns on whether the pact
is enough to head off an oil glut as the coronavirus pandemic
hammers economies worldwide.
Gold prices edged higher to hit a more than one-month peak
and the dollar traded little changed, with volume thin due to
the Easter Monday holiday across Europe and parts of Asia, with
markets in Australia, New Zealand and Hong Kong also closed.
U.S. Treasury yields rose as the cut to global oil output
addressed a glut that has damaged the energy sector but reminded
investors of the sharp economic contraction countries face.
Britain's finance minister told colleagues the UK's economy
could shrink by 25% to 30% between April and June because of the
coronavirus lockdown, the Times newspaper reported. The slump in China's exports is expected to have extended
into March, while a collapse in oil prices likely deepened a
decline in imports, a Reuters poll showed. Chinese exports are expected to have fallen 14% in March
from a year earlier, slowing the downturn somewhat from a 17.2%
contraction in the January-February period. Imports are set to
have shrunk 9.5% from a year earlier, the sharpest drop since
July 2016 and deeper than a 4.0% decline in January-February.
"The market wants to find confidence in some of the recent
developments, but I still think it's going to be a very long
slog," said Gennadiy Goldberg, senior rates strategist at TD
Securities in New York.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.11% and its emerging market stock index lost 0.73%.
On Wall Street, the Dow Jones Industrial Average .DJI fell
438.7 points, or 1.85%, to 23,280.67. The S&P 500 .SPX lost
44.46 points, or 1.59%, to 2,745.36 and the Nasdaq Composite
.IXIC dropped 51.93 points, or 0.64%, to 8,101.65.
Corporate America reports first-quarter results this week,
starting what is expected to be a painful quarterly earnings
season due to the coronavirus pandemic.
Earnings for S&P 500 firms are expected to tumble 9.0% in
the first quarter, compared with a Jan. 1 forecast of a 6.3%
rise, before plummeting 20.7% in the second quarter as sweeping
lockdowns halt business activity and spark furloughs.
The outbreak could reach its U.S. peak this week, a top
health official said, as the White House considers when and how
to lift stay-at-home restrictions. The United States, with the world's third-largest
population, has recorded more fatalities from COVID-19 than any
other country, more than 22,000 as of Monday morning, according
to a Reuters tally.
The Nikkei .N225 fell 1.9% overnight in Japan and South
Korean shares .KS11 dropped 1.3%, while China's CSI300 index
.CSI300 lost 0.5%.
Oil prices have slumped more than 50% from their January
peak as the coronavirus pandemic hit fuel demand.
International benchmark Brent futures LCOc1 rose 50 cents
to $31.98 per barrel but were trading below the day's highs.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
up 32 cents at $23.08 per barrel in a volatile session, having
fallen more than 3% to $22.03 earlier in the day.
The dollar index =USD rose 0.007% and the Japanese yen
JPY= strengthened 0.78% versus the greenback at 107.62 per
dollar.
Gold rose, as it is seen as a store of value when inflation
pressures are rising.
Central banks are doing everything in their power to support
the stock market and economy, which will eventually lead to
inflation, said Phil Streible, chief market strategist at Blue
Line Futures in Chicago.
"Yields on debt instruments are virtually zero, which
increases physical demand for gold and silver as a safe-haven
asset," Streible said.