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Asia’s mixed markets signal a pause after Wall Street’s swoon.
Major Asian markets were mixed at midday on Thursday, suggesting that investors were taking a deep breath after pounding Wall Street stocks sharply lower on Wednesday.
Indexes in Japan and Hong Kong were down less than 1 percent, while South Korean shares were up more than 1 percent. Futures markets were pointing to a positive opening for European stocks later in the day, and then for Wall Street.
Investors appeared to be pausing after the S&P 500 index fell 4.4 percent on Wednesday, driven lower by worsening economic data and President Trump’s prediction that the United States was set for a “very, very painful two weeks.” The drop added to the pounding American stocks have taken over the past month, which has left the S&P 500 index more than 20 percent lower.
More bad news could be in the works, as investors braced for weekly jobless claims data expected later Thursday in the United States. But for now, investors were looking for signs of a bottom to the market.
Prices for longer-term U.S. Treasury bonds rose, suggesting investors were continuing to see them as a safe place to park money. Gold prices rose in futures markets, too. But oil futures also rose, an indicator that some investors feel safer than they had in putting their money in a market that depends on continuing economic growth.
Wall Street drops as investors brace for more damage to come.
Faced with grim new projections of the potential scale and economic ramifications of the coronavirus pandemic, investors dumped stocks on Wednesday. The S&P 500’s fall of more than 4 percent brought its decline over two days to 6 percent.
The drop, which followed a sell-off in Europe and Asia, came after President Trump said at a news conference on Tuesday that the United States would face a “very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 people in the country. On Wednesday, the United Nations warned of “enhanced instability, enhanced unrest and enhanced conflict.”
The economic readings continue to worsen as well. On Wednesday, surveys of manufacturing and factory activity in the United States, Europe and Japan showed activity slowing to levels not seen in a decade or more. In the United States, factory orders and employment measures fell to their lowest since 2009, the Institute for Supply Management said.
“The market is sort of steeling itself for the onslaught of bad news over the next couple weeks,” said Julian Emanuel, chief equity and derivatives strategist at the brokerage firm BTIG.
On Thursday, the U.S. government will report how many people filed for unemployment last week, and the data could show that as many as 5 million workers lost their jobs as people stay home and factories shut down.
A Labor Department report on Thursday is expected to show millions more jobless.
Another jaw-dropping number is expected Thursday when the government reports the number of new unemployment claims filed across the country last week.
Several estimates put the figure at roughly five million. That would come on top of the previous week’s claims, which came in at 3.3 million — a total that could be revised upward when the Labor Department issues its report at 8:30 a.m. Eastern.
The speed and scale of the job losses is without precedent. Until the coronavirus outbreak caused widespread workplace shutdowns and layoffs, the worst week for initial unemployment filings was 695,000 in 1982.
The economic damage from the pandemic was initially concentrated in tourism, hospitality and related industries. But now the pain is spreadin much more widely. The Institute for Supply Management said Wednesday that the manufacturing sector, which had recently begun to recover from last year’s trade war, was contracting again. Data from the employment site ZipRecruiter shows a steep drop in job postings even in industries such as education and health care that are usually insulated from recessions.
The spring buying season in real estate could be “catastrophic.”
In spite of market headwinds, overpriced apartments and legislative obstacles, New York’s residential real estate market was on an improbable upward swing for most of the first quarter.
Then the coronavirus struck, stopping the rebound in its tracks. Now, the pandemic threatens to do the same in real estate markets nationwide during the peak of buying season.
What happened in the first two months of the year no longer matters, said Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers & Consultants. “All that matters to the housing market is what happens next.”
New York State’s stay-at-home order, and similar restrictions elsewhere, have effectively banned open houses and in-person property showings, and “most people are not going to make a big purchase without seeing it,” said Frederick Warburg Peters, the chief executive of Warburg Realty. Depending on the duration of the outbreak, he said, the number of new contracts in New York could drop by more than 70 percent in the second quarter, compared with the same period last year.
“We find ourselves with little to no empirical evidence of what’s happening,” said Mr. Miller, because the virus outbreak became a factor so late in March. “I don’t have a sense, other than it’s going to be catastrophic.”
Reporting was contributed by Ben Casselman, Patricia Cohen, Stefanos Chen, Carlos Tejada and Daniel Victor.