A nasty 1,000 point slump saw the Dow and Wall Street end a volatile day in negative territory, dragging the overnight ASX 200 futures market with it.
Now the local market will start with a loss of 53 points (at 7 am) after being up 25 just before 5 am.
After Tuesday’s 34.5 point or 0.6% slip, it won’t be a good day locally, especially with oil falling sharply and gold dipping again, along with iron ore.
But silver and copper rose as the weaker US dollar helped.
The weaker greenback saw the Aussie dollar trading just under 62 US cents in early Asian dealings this morning.
On Wall Street, stocks had been rising throughout the session thanks to more signs of the slowing spread of COVID-19 across the globe but the upward moves eventually ran out of steam and the major markets turned down and kept falling.
At the close, the Dow was down about 26 points, or 0.1%, at 22,653, but had been up by as many as 937 points at 23,617.
The S&P 500 index had a similar experience – it ended the day down 4 points, or 0.2%, at 2,659, but had been up 93.21 points at the peak.
Nasdaq finished the session down 27 points, or 0.3%, at 7,887, but had been 2.9% higher at Tuesday’s peak.
Markets are wrestling with the outlook for the economy and wondering how earnings and the economy that might be impacted when the virus fades.
The March quarter earnings season starts after Easter and expectations are all over the place for revenue and earnings – in fact, it would be fair to say no one has a clue.
Adding to the sense of confusion Dallas Fed President Robert Kaplan said in an interview with the Wall Street Journal that manufacturing, trade, and business investment are likely to drag on growth after the pandemic subsides.
He described the potential impact from consumer trends, due to closures and petering personal activity to limit the contagion as “somewhat of a body blow.” That’s a bit of an understatement.
Wall Street’s surge then sag in fact replicated the experience of the ASX 200 on Tuesday. It ended Tuesday’s session 34.5 points lower at 5252.3, down 0.6%. But it had been up as much as 2.5%.