WHAT promised to be a recovery in equity markets after the global rout faltered in Asia as US stock-index futures declined. Treasury yields fell after spiking on Tuesday, and the yen gained as investors turned back to haven assets.
Japan’s benchmarks eked out slim gains at the close after retreating from the session’s highs, as S&P 500 Index futures declined and Chinese shares dropped, suggesting the recovery isn’t yet on solid ground. The dollar slipped, and gold edged higher. A topsy-turvy session for the S&P 500 Index ended with the gauge advancing 1.7 percent on Tuesday and the Cboe Volatility Index sank almost 20 percent.
The sharp sell-off in stocks around the world that started last week and accelerated this week can be explained by a multitude of factors from concerns over the path of US monetary policy to a rapid unwinding of trades predicated on continued low volatility in markets. Traders are now watching whether this rally can be sustained after the slump left markets from Europe to Japan in technically oversold territory.
Signs of a rebound encouraged a welter of calls to “buy the dip.” Goldman Sachs Group Inc.’s chief strategist was among those saying it’s time to buy US stocks.
Meantime, oil rose after three days of declines as an industry report was said to show an unexpected decline in US crude stockpiles. Metals advanced. Bitcoin traded around $7,400 after at one point sinking below $6,000 for the first time since October.
Image credits: AP