U.S. Futures Drop, Bonds Up on Second-Wave Worries: Markets Wrap

U.S. futures retreated along with Asian shares and the dollar climbed against major peers as investors gauged the danger of a second wave of coronavirus infections.

S&P 500 futures were down about 1.6%. Stocks in Hong Kong initially saw the bulk of selling, with losses also in Australia, Japan and South Korea. Declines were pared after key Chinese data showed some signs of economic improvement. More than 20 U.S. states are seeing a pick-up in cases, Tokyo reported a jump over the weekend and a fresh outbreak in Beijing prompted officials to close a market there. Second-wave concerns had pummeled shares on Thursday before a modest rebound Friday. Oil prices slid, and Treasuries rose.

“The risk is that, globally, we get a second wave,” said Chris Iggo, the chief investment officer for core investments at AXA Investment Managers. “Now is the time to have that long-duration bond exposure in the portfolio.”

Key Chinese data on Monday showed signs of progress, albeit a bumpy path, as the world’s second-biggest economy recovers. Retail sales and industrial output were marginally weaker than expectations in May, but still showed a pick up from the previous month. Officials moved a press briefing online due to the latest virus outbreak in Beijing.