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It wasn’t looking like a positive end to the week for equities, but futures have bounced in the last hour or so, and are now pointing to a flat to slightly positive open. The data calendar is quiet this morning, and barring any major headlines, trading is likely to slow down as the day progresses heading into the holiday weekend.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, news in global markets, global and national trends related to the COVID-19 outbreak, and much more.
New laws from China related to curtailing civil liberties in Hong Kong have raised concerns over a new round of protests in the region, and the result was a steep sell-off in Hong Kong stocks overnight. The benchmark Hang Seng (HSI) fell over 5.5% for its weakest one-day decline since 7/8/15. Since 2000, last night’s decline was the 24th time since 2000 that the Hang Seng (HSI) dropped more than 5% in a single session. Following those 23 prior occurrences, the HSI saw an average gain of 1.2% (median: 1.7%) the following day with positive returns 70% of the time. While the HSI tended to bounce back a bit the following day, the average change over the following month wasn’t nearly as strong with an average and median decline of -0.2% and positive returns less than half of the time (48%).
For the here and now, last night’s decline in the HSI was a bit discouraging as the index broke down after several failed attempts to break above short-term resistance.