U.S. stock futures tumble as Trump’s coronavirus response disappoints

FAN Editor

March 12, 2020

By Tom Westbrook and Noah Sin

SINGAPORE/HONG KONG (Reuters) – U.S. stock index futures cratered on Thursday, dropping near to their maximum down limit, after President Donald Trump failed to reassure markets with measures to limit the impact of the coronavirus pandemic.

Trump also announced a temporary ban on travel from Europe to curb the spread of the virus, which some analysts said spooked investors.

S&P 500 <ESc1> futures fell as much as 4.7% to 2,610 points, near the overnight down limit of 2,601 points. They pared some losses by midsession in Asia, but at 3.8% in the red still point to the possibility of another rough day on Wall Street.

Trump said the United States will suspend all travel from Europe to the United States for 30 days and outlined steps to help small businesses affected by the virus in a televised address from the Oval Office.

But investors were troubled by the absence of targeted stimulus measures and the lack of details about the public health response, such as the provision of extra testing kits or subsidies for treatment.

“The U.S. has done little testing. Community spread is happening already,” said Andy Wong, multi-asset senior investment manager at Pictet Asset Management in Hong Kong.

“Proper leadership has been sorely lacking, and focus should be on appropriate measures and planning for the worst, rather than focusing on optics.”

Trump’s address came after the longest bull run in U.S. history had already come to a shuddering halt on the Dow Jones index on Wednesday, as it tipped into bear market territory, and with Asian markets dropping as the coronavirus spread widens. [MKTS/GLOB]

The Dow <.DJI> lost nearly 6% on Wednesday and is off 20.3% since hitting a record high on Feb. 12. Blue chip stocks such as Boeing <BA.N> and ExxonMobil <XOM.N> are down 40% for the year so far. The S&P 500 <.SPX> is down 19.2% since Feb. 19.

Markets’ disappointment with Trump’s address also came with doubts about the U.S. virus response already growing.

Trump had earlier in the week said he would take “major steps” to ease economic strains, but then failed to appear at a scheduled briefing on Tuesday.

“The market was looking for something much better designed,” said Cliff Tan, East Asian head of global markets research at MUFG in Hong Kong.

“What they have seen in the last three days is looking increasingly more like brainstorming…the market sees this as too haphazard, too little, too late.”

(Reporting by Tom Westbrook in Singapore and Noah Sin in Hong Kong; Editing by Muralikumar Anantharaman & Shri Navaratnam)

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