U.S. Stock Futures Slide; Silver Contracts Surge: Markets Wrap

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U.S. Stock Futures Slide; Silver Contracts Surge: Markets Wrap

Adam Haigh

(Bloomberg) -- U.S. equity futures fell Monday amid lingering concerns about the impact of retail trading and disappointing economic data from China. Silver futures surged in the latest manifestation of retail investor enthusiasm.

S&P 500 contracts fell as much as 1% in Asia trading after the U.S. benchmark closed about 2% lower on Friday. Silver futures opened more than 7% higher. The dollar edged higher against major peers. The Australian dollar slipped after Perth in Western Australia state went into a five-day lockdown due to a coronavirus case. The yield on 10-year Treasuries ended last week around 1.07%.

Global stocks retreated last week as retail trading created havoc in some U.S. shares and traders mulled an uncertain outlook for deploying coronavirus vaccines. Over the weekend, data showing a slowdown in Chinese manufacturing provided a reminder to investors that the global economic recovery from the pandemic remains fragile.

The spike in silver comes as retail sites were overwhelmed with demand for bars and coins on Sunday. Comments began appearing on Reddit forum r/WallStreetBets last week as people suggested buying exchange-traded funds linked to silver.

“You have a number of players out there who are finding hedge funds and others with short positions and they’re corralling thousands of investors to squeeze them out,” Scott Crowe, chief investment officer at Centersquare Investment Management LLC, said on Bloomberg TV. “I caution the thinking that this is just a one-off -- we are already talking about silver this morning.”

Meantime, in China, the central bank indicated it won’t drive up borrowing costs further after concern grew about a cash squeeze. The country’s purchasing managers’ indexes showed Asia’s largest economy extended its expansion in January but lost speed more abruptly than expected.

These are some key events coming up:

Earnings season is full steam ahead as companies report results, including Alibaba, GlaxoSmithKline, Ferrari, Exxon Mobil, BNP Paribas and Yum! Brands.The Reserve Bank of Australia’s policy decision comes Tuesday.Wednesday sees the EIA crude oil inventory report.The Bank of England sets rates on Thursday and an Indian central bank policy decision comes then too.The U.S. January payrolls report is due Friday, providing a first look at hiring in 2021.

Here are the main moves in markets:

Stocks

S&P 500 futures lost 1% as of 8:33 a.m. in Tokyo. The gauge fell 1.9% on Friday.Futures on Japan’s Nikkei 225 rose 0.2% on Friday.Hang Seng Index futures dropped 0.4% on Friday.Australia’s S&P/ASX 200 Index dipped 1%.

Currencies

The yen dipped 0.1% to 104.76 per dollar.The offshore yuan was at 6.4502 per dollar.The euro bought $1.2132.The Aussie slipped 0.3% to 76.25 U.S. cents.The kiwi declined 0.4% to 71.62 U.S. cents.

Bonds

The yield on 10-year Treasuries rose to 1.07% on Friday.Australia’s 10-year yield rose one basis point to 1.14%.

Commodities

Silver futures rose 7.6% to $28.97.West Texas Intermediate slipped 0.6% to $51.93 a barrel.Gold rose 0.6% to $1,859.39 an ounce.

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