'The pain looks far from over': Stocks whipsaw as oil plunges to 17-year low on coronavirus fears

AP

• European and Asian stocks dropped and US futures whipsawed on Monday as investors weighed plunging oil prices and escalating coronavirus risks against stimulus measures.
• Oil slumped to a 17-year low after Saudi Arabian officials said they weren't in contact with Russia about ending their price war and stabilizing markets.
• President Donald Trump gave up hope for a return to normal life by Easter, instead predicting US deaths from the pandemic would peak at that point.
• Trump also signed a $2 trillion stimulus bill into law on Friday, designed to give financial aid to distressed industries, small businesses, state and local governments, healthcare providers, and households.
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European and Asian stocks dropped and US futures whipsawed on Monday as investors weighed tumbling oil prices and the prospect of months of disruption due to the novel coronavirus against stimulus measures.

Crude prices slumped to 17-year lows as airlines grounding their fleets, authorities imposing lockdowns, and factory closures hammered demand. Moreover, Saudi Arabian officials said they weren't in contact with Russia about ending their oil-price war and stabilizing markets, Reuters reported.

Meanwhile, President Donald Trump scrapped his "aspirational" timeframe of a return to normal life by Easter on Sunday, instead predicting US coronavirus deaths would peak at that point. He added that the country would do well to keep its death toll to 100,000, and extended social-distancing recommendations until April 30.

Trump's shift in expectations came two days after he signed a $2 trillion stimulus bill into law, greenlighting loans and grants to distressed industries, small businesses, state and local governments, healthcare providers, and individuals.

Coronavirus - which causes a disease called COVID-19 - has infected more than 722,000 people, killed at least 33,000, and spread to upwards of 175 countries and territories. The US remains one of the worst-hit nations, with more than 140,000 confirmed coronavirus cases and north of 2,500 deaths.

Investors should expect further volatility as the pandemic causes mass disruptions, analysts predicted.

"Sheer economic shock is about to overwhelm markets ahead; and we will require even greater policy responses," Michael Every, global strategist at RaboResearch, said in a research note.

Crude prices could fall further too.

"While prices have not yet reached the relative falls seen during the Global Financial Crisis of 2008, the rate of the crash is unprecedented, and the pain looks far from over," Jack Allardyce, oil and gas analyst at Cantor Fitzgerald Europe, said in a morning note.

Here's the market roundup as of 10:30 a.m. in London (5:30 a.m. ET):

• European equities were broadly down, with Britain's FTSE 100 down 0.5%, and the Euro Stoxx 50 down 0.3%. Germany's DAX was flat.
• Asian indexes dropped, with China's Shanghai Composite down 0.9%, Hong Kong's Hang Seng down 1.3%, and Japan's Nikkei down 1.6%.
• US stocks look set for a positive open. After dropping earlier, futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq rose as much as 0.4%.
• Oil prices retreated, with West Texas Intermediate down 3.7% at $20.70 a barrel, and Brent crude down 4.7% at $26.70.
• The benchmark 10-year Treasury yield dropped below 0.64%.
• Gold slid 0.3% to $1,649.
• Bitcoin rose about 1.7% to around $6,260.

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