Daily Stocks Update: Poised for the Worst Weekly Open – Jan 5, 2016


Global equities pared gains on the last trading day of December 2015, possibly due to profit-taking at the end of the year and a quick bout of risk aversion. The Dow 30 index closed 178.84 points down to 17,425.03 (-1.02%), the Nasdaq fell 58.4 points to 5,007.4 (-1.15%), and the S&P 500 index was down 19.42 points to 2,043.94 (-0.94%).

Meanwhile, Dow 30 index futures for March 2016 delivery are down 164.5 points to 17,176.5 (-0.95%), S&P 500 index futures are down 17.50 points to 2,018.00 (-0.86%), and Nasdaq futures are down 46.62 points to 4,540.38 (-1.03%). The S&P 500 VIX, which is considered a gauge of market uncertainty, is up 0.92 points to 18.21 (+5.32%).

Asian equities tumble led by Chinese shares

The Chinese stock market tumble came back to haunt the financial markets when the China A50 index slipped by more than 5% in Monday’s trading. This was likely spurred by the weaker than expected manufacturing release from Caixin, which revealed a sharper than expected industry contraction, compared to the government figures that indicated an improvement last week.

The China A50 index is down 605.80 points to 10,105.84 (-5.66%), the Hang Seng is down 610.40 points to 21,302.00 (-2.79%), and the Nikkei 225 is down 582.73 points to 18,450.98 (-3.06%). An earthquake hit India and left some casualties while New Zealand’s coast also experienced a 5.1-magnitude tremor.

Futures are much deeper in the red, with the China A50 index futures for Jan 16 delivery down 710.50 points to 9,771.0 (-6.82%) and Hang Seng futures down 639 points to 21,265.00 (-2.95%).

European shares and futures to open lower?

With all the risk aversion going on in the financial markets, European shares may be poised to open lower ahead of the release of German preliminary CPI and Spanish manufacturing PMI data. The UK is set to release its manufacturing PMI and might show a feeble improvement, probably not enough to offset any potential losses from the risk-off environment.

The Euro Stoxx 50 closed 20.94 points lower to 3,293.34 (-0.63%), the German DAX was down 117.13 points to 10,743.01 (-1.08%), and the French CAC 40 was down 24.22 points to 4,677.14 (-0.52%). Euro Stoxx 50 futures for March 2016 delivery are down 29.5 points to 3,269.5 (-0.89%), German DAX futures are down 128 points to 10,499.6 (-1.21%), and French CAC 40 futures are down 53.2 points to 4,574.3 (-1.15%).