Futures volatile, coronavirus cases jump

Finance


Traders work on the floor at the New York Stock Exchange.

Brendan McDermid | Reuters

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7:59 am: 10-year Treasury yield rebounds from all-time low

The 10-year Treasury yield climbed on Wednesday, after sinking to an all-time low as investors sought the safety of U.S. government debt amid heightened fears about the fast-spreading coronavirus. The benchmark yield, which moves inversely to price, rose three basis points to 1.359%. The 2-year yield, however, hit a low of 1.157% on Wednesday, its lowest level since Feburary 2017. The short-duration rate is the most sensitive to Federal Reserve’s monetary policy expectations. Traders have increasingly priced in a rate reduction at the central bank’s April meeting. —Li

7:56 am: 3-day slide is 25th worst since 1950

UBS notes that the 7% decline in the S&P 500 in three days is the 25th worst since 1950. Strategist Keith Parker believes that stocks are likely to remain volatile over the coming weeks as coronavirus cases outside of China increase, companies lower earnings forecasts and U.S. election primaries cause uncertainty. “Valuation is supportive and growth in Q2 is expected to rebound, but risks remain,” the strategist wrote in a note. Parker is advising clients to buy quality and momentum stocks, which tend to outperform in the two months following volatility shocks. —Melloy

7:47 am: Analysts surprised by the Disney CEO switch

Disney shares fell as analysts tried to make sense of Bob Iger’s move into the executive chairman role with Bob Chapek taking over as CEO. “This is negative for DIS as DIS’s EPS weakness is riskier without Iger’s value-creating track record,” Needham analyst Laura Martin said. “There is never a great time for succession announcements, but this one is likely to cause particular consternation with investors,” Wells Fargo analyst Steven Cahall said. CNBC PRO subscribers can read more here. —Bloom

7:20 am: Disney shares fall 2% as CEO Bob Iger steps down, effective immediately

Shares of Disney fell more than 2% during Wednesday’s premarket trading after the company said that CEO Bob Iger would step down, effective immediately, and assume the role as executive chairman. Bob Chapek, who most recently served as chairman of Disney parks, experiences and products, will become the company’s new CEO. He will be the seventh CEO in Disney’s nearly 100-year history. “I obviously have huge shoes to fill,” Chapek told CNBC’s Julia Boorstin on “Closing Bell” Tuesday. “Bob’s legacy in the company is just profound. I think my role is not to take the strategic pillars he’s so well established over the last 15 years and continue to work on those and implement those in the marketplace, most importantly our direct-to-consumer initiatives, but at the same time look around the corner for what disruption might be going on in the marketplace that would necessitate a fresh look at those things.” —Stevens

7:16 am: Coronavirus cases jump

South Korea reported 169 new coronavirus cases overnight, bringing the country’s total to more than 1,100. The number of coronavirus cases in Italy has broken above 300, with some being reported outside of the original epicenter in the north. Meanwhile, China confirmed 406 new cases along with 52 deaths. —Imbert

7:15 am: Stock futures flat as Wall Street tries to rebound from back-to-back massive losses

U.S. stock futures are flat on Wednesday as investors try to recover some ground following steep back-to-back losses. Dow Jones Industrial Average futures are up 11 points, indicating a gain of 64 points at the open. Trading was volatile. The S&P 500 is coming off its worst two-day slide in four years while the Dow posted consecutive losses of more than 800 points for the first time ever on Tuesday. Investors around the world have been dumping stocks in favor of bonds amid concerns over a possible economic slowdown due to the coronavirus. —Imbert

With reporting from John Melloy and Yun Li

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