U.S. stock futures traded lower on Monday, continuing the declines we saw during Friday’s session after big corporations such as Exxon Mobil and Apple discussed the uncertainty the coronavirus has cast on future earnings.
The Dow Jones Industrial Average is down more than 200 points or 0.9 percent while the S&P 500 and the Nasdaq also fell 0.8 percent and 0.7 percent, respectively as of 3:25 a.m. ET. Oil also pared losses to 5.9 percent .
In Asia, Hong Kong’s Hang Seng fell 3.9 percent. Markets in Japan and China are closed for holidays.
In Europe, London’s FTSE was down 0.7 percent, Germany’s DAX dropped 2.7 percent and France’s CAC was down 3.4 percent.
Investors are also entering what historically is a lackluster period for stock returns, May through October, of which the Wall Street phrase “Sell in May and go away” was born. The S&P 500’s average return during that period is 1.5 percent since 1950, according to LPL Financial.
CORONAVIRUS VOLATILITY THWARTS ‘SELL IN MAY’ TACTIC FOR STOCKS
As for stock news, the airlines will be in focus on Monday as investors digest some sobering comments on the industry from legendary investor Warren Buffett who sold his stakes in American Airlines, Delta, Southwest and United Airlines.
“The world has changed,” said Buffett during his pared-down virtual annual meeting in Omaha, Nebraska, referring to the impact the coronavirus has and will have on the future aviation.
Despite his frank assessment of the sector, the 89-year-old billionaire remains bullish on America.
“American magic has always prevailed, and it will do so again.”
Buffett’s sentiment was echoed separately by President Trump’s chief economic adviser Larry Kudlow, who remains confident that as the U.S. economy begins to reopen a strong bounce-back will follow.
US COULD REBOUND FROM CORONAVIRUS WITH HISTORIC GROWTH RATE IN 2021: KUDLOW
“President Trump cut taxes and regulations for middle-income folks, better trade deals, boosting the energy system, that worked. We had terrific growth in earlier years, even the beginning of this year,” Kudlow told “Sunday Morning Futures.” “We will build on those incentives so that coming off of this pandemic, we could have one of the greatest economic growth rates in American history in 2021 next year.”
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Helping reinforce that positive sentiment is more progress in the fight against the coronavirus.
On Sunday, Swiss drugmaker Roche announced it received emergency approval from the U.S. Food and Drug Administration for an antibody test which can show whether patients have ever been infected with the coronavirus.
This follows other FDA developments. Late Friday, approved Gilead’s remdisivir for emergency use in treating coronavirus.
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The news was announced with President Trump and CEO Dan O’Day at the White House by FDA Commissioner Stephen M. Hahn, M.D and HHS Secretary Alex Azar.
In other news, the U.S. Senate is expected back at work on Monday.
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