Top 4 things to know in the market on Monday

1. China markets tumble on reopening after holiday

China’s financial markets shook as they reopened after an extended Lunar New Year holiday. The main stock markets in Shanghai and Shenzhen fell some 8%, and the yuan fell 1.2% against the dollar to its lowest in eight weeks – once again breaching the psychologically important level of 7 to the dollar.

That happened despite a ban on short-selling by the stock market regulator and the injection of a net $22 billion into the domestic money market by the central bank. The People’s Bank of China effectively chose to roll over all of the extra seasonal liquidity that it pumped in ahead of the holidays, and add a little more for good measure.

There has been no major change in the narrative around the outbreak over the weekend: the death toll rose to 361 from 17,205 confirmed cases.

2. Markets set to bounce at opening

U.S. stocks are set to open with a bounce on Monday after a Friday session where selling had accelerated into the close.

Dow 30 futures were up 107 points, or 0.4%, while S&P 500 futures were up 0.4% and the Nasdaq 100 futures contract was up 0.5%.

European markets had also opened broadly higher, with the benchmark Stoxx 600 index edging up 0.1%. Commodities had also stabilized, with copper futures set to break a run of 13 straight down days. The dollar index, meanwhile, strengthened by 0.3%, due chiefly to gains against the euro and sterling.

3. Alphabet (GOOGL.US) due to report

Alphabet (GOOGL.US), the parent company of Google, reports its quarterly results after the closing bell on Monday, the first time under the leadership of Sundar Pichal.

Analysts polled by Investing.com expect earnings per share to have fallen some 2% year-on-year to $12.50 a share, on a 19% rise in revenue to $46.9 billion.

Alphabet (GOOGL.US) stock gained 7% in January, outperforming broader market after underperforming with a gain of only 19% in 2019.

Investors will be looking for as much detail as possible on the contribution of cash cow YouTube, as well as the progress of self-driving technology unit Waymo, among other things.

4. Sterling tumbles as post-Brexit era starts awkwardly

The pound tumbled over 1% against the dollar and nearly 0.8% against the euro as the post-Brexit era began with some confrontational rhetoric out of London.

U.K. Prime Minister Boris Johnson said in a keynote speech that he would rather accept tariffs than the jurisdiction of the European Court of Justice, reviving the risks of an economically damaging rupture with the EU at the end of an agreed transition period which ensures that nothing essentially changes in the U.K.-EU relationship until the end of the year.

The EU’s members haven’t yet agreed on the mandate they will give the European Commission as regards negotiating a free-trade deal with the U.K. However, governments and Commission representatives had been largely consistent in the three years since the referendum that they would press for an extensive role for the ECJ in any FTA.

 Trader Milko Zashev

Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance