To the scoreboard:
Dow: 24,912.77 +567.02 (+2.33%)
S&P 500: 2,695.88 +46.94 (+1.77%)
AUD/USD: 0.7894 +0.0017 (+0.22%)
ASX200 SPI futures (March contracts): 5,860 (+96)
1. US stocks rebound: UK and European markets both closed down more than 2% in the wake of the global stock selloff. But in a choppy session of trade, the S&P500 fell sharply at the open before ripping higher into the close. And ASX futures traders expect those gains to extend to the local market today, with futures contracts up by almost 100 points.
2. As for the exchange traded note (ETN) run by Credit Suisse linked to low-volatility trades — which plummeted in value yesterday when volatility spiked — the bank said it will now wind up the product by February 20 and redeem money to investors.
3. In currencies, early gains in the US dollar and Japanese yen reversed over the course of the session as fears of another stock rout subsided. The Aussie dollar is off its lows in the wake of yesterday’s data misses on trade and retail sales, with a quiet day ahead on the domestic and international calendar.
4. Bitcoin believers dig in: Buyers stepped in overnight after Bitcoin briefly dipped below $US6,000 for the first time since November. “It doesn’t die, it just comes back stronger,” one analyst told Business Insider with prices rocketing back towards $US8,000 this morning. But Goldman analysts noted Bitcoin prices tend to move in lockstep with other cryptos, and they think that’s a problem.
5. Investments tied to low volatility have been in focus as analysts try to explain the reasons behind yesterday’s huge market selloff. JP Morgan highlighted that computer-based trades which follow trends can exacerbate selling, and Barclays analysts argued the total volume of such trades isn’t big enough to really rattle markets. And here’s what Goldman Sachs, UBS and Deutsche Bank analysts had to say about the selloff.
6. US still on track for solid growth: Allianz chief economic adviser Mohamed El-Erian told Business Insider that the US economy can still grow by 3%, despite jitters caused by this week’s stock selloff. El-Erian said that to stay on track, the US economy needs to avoid three key pitfalls — a major geopolitical shock, a policy mistake by the US Fed, and a huge market accident.
Have a great day.