Equities Rebound, Coronavirus Spreads Further, Earnings Season In High Gear

The U.S. Futures Are Up In Early Trading

The U.S. futures are up in early trading as equities appear to be rebounding from last week’s plunge. While early action is bullish, traders are warned to be cautious, the black swan coronavirus event is not yet over. China now reports more than 360 deaths as the number of infected continues to rise. The first death outside of China was reported over the weekend as well, this one in the Philippines. The NASDAQ Composite is in the lead with a gain near 0.60% while the Dow Jones and S&P 500 are both up about 0.55%.

In other news, there are a number of potentially market-moving events slated for the week. Topping the list is the first Democratic Primary in the 2020 Presidential Election. Bernie Sanders has unexpectedly risen to rival front-runner Joe Biden putting extra importance on the evening’s results. If Bernie Sanders emerges as the new front-runner equity markets could pull back sharply. Also on tap, another week of peak earnings. This week look out for reports from Google, Costco, and Conoco-Phillips. On the economic front, ISM figures for January are expected at 10 AM.

Europe Cautiously Higher, Brexit Phase 1 Is Complete

The European indices are moving higher at midday on Monday. The FTSE is in the lead with an advance of 0.45% following the smooth phase 1 Brexit last Friday. The UK now has 11 months to negotiate a full deal with the EU, based on the last round the negotiations are certain to be difficult. The French CAC is up about 0.40% while the DAX trails at 0.25%.

In stock news, shares of Ryanair are up 5% at midday after the company reported quarterly results. The air carrier reports better than expected top and bottom line income and upped its full-year guidance. At the other end of the spectrum, Shares of Julis Baer are down nearly -6.0% after it missed results and announced a new cost-cutting review. On the economic front, EU manufacturing PMI came in at 47.9 and the highest level in 9 months. The downside is that activity continues to contract.

Asian Markets Lower, China Re-opens And Falls 8%

Most indices in Asia closed lower on Monday and led by China. China’s markets reopened for the first time since the start of the Lunar New Year holiday and fell -8.0%. The decline is large but less than feared. Elsewhere in the region, losses were led by the ASX 100 and its decline of -1.24%. In economic news, the Chinese Caixin small-cap PMI came in at 51.1 and shows expansion within the economy. The bad news is that PMI came in weaker than expected and down from the previous month.