After the Monday Market Mayhem which saw the Dow drop more than 1,000 points, the VIX surge more than 8 points to close above 25 - its biggest jump since the February 2018 VIXtermination event - and prompted a panicked respond from both Trump and Kudlow urging Americans to 'buy the dip', S&P futures jumped in early trading, rising as much as 40 points to 3,260 higher even after Shanghai Composite fell as much as 1.7% and China's Nasdaq ChiNext tumbled as much as 4.1%.
Some dealers cited a WSJ report on a possible vaccine as helping sentiment, though human tests of the drug are not due until the end of April and results not until July or August. Whatever the cause, E-Mini futures for the S&P 500 bounced 0.7% to pare some of the steep 3.35% loss the cash index suffered overnight. However the initial dip buying euphoria did not last as even more cases were repoted, now in Spain and Austria, and futures faded most gains as fresh concerns about an out of control pandemic hit risk assets.
"There is no question financial markets are coming round to the realization that this particular crisis is likely to have a slightly longer shelf life than many thought was the case a couple of weeks ago,” said CMC Markets strategist Michael Hewson. "For now, there appears little prospect that financial markets look likely to settle down in the short term, which means investors will have to get used to an extended period of uncertainty and volatility.”
The number of confirmed coronavirus infections worldwide has risen to more than 80,000, with attention focusing on South Korea which has become the worst-affected country after China. Overnight South Korea reported a total of 977 cases, up 84 on the day, with a 11th coronavirus-related death reported. Furthermore, South Korea said it would implement containment policy in its 4th largest city, Daegu,. Separate reports noted that South Korea is to draft a supplementary budget as soon as possible; with President Moon saying declaring Daegu as a "special disaster zone" is not enough and vows full budget support.
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