Bloomberg Business
-Oil: WTI futures in New York slid 1.9 percent to $32.50 a barrel while contracts on Brent crude dropped 2.2 percent to $32.80 at 10:43 a.m. London time. Morgan Stanley has warned that a rapid appreciation of the U.S. dollar may send Brent crude as low as $20 a barrel. Saudi Arabia, which is considering an IPO of Saudi Aramco, said in a statement released by the Saudi Arabian Monetary Agency that it will maintain the 30-year old riyal peg to the dollar. The statement comes after 12-month forward contracts for the riyal climbing to the highest since at least December 1996 on Friday.
-China shares: Shares on the Shanghai Composite Index closed 5.3 percent lower, extending last week’s 10 percent plunge. The decline came even after the yuan gained following a second stable fixing central bank. Suspected interventions from the PBOC last week have mopped up offshore supplies of the currency causing interbank yuan rates in Hong Kong to soar to record highs for loans ranging from one day to a year.
-European equities: Despite getting off to a good start this morning, European shares have turned lower, with the Europe Stoxx 600 dropping 0.1 percent by 10:58 a.m. London time. The FTSE has also turned lower, following a strong start to the session. U.S. futures are slightly higher as investor focus turns to earnings with Alcoa Inc. reporting after the bell, marking the unofficial start of earnings season.
-Rand: The South African rand suffered something of a flash-crash when it opened for trading, plunging as much as 9 percent to 17.9169 per dollar before paring losses. Macquarie Bank Ltd. said that today may not be a one-off for the currency as open interest amongst Japan’s retail traders is highest after the dollar and the pound, with positions more than doubling between June and December as the rand lost 24 percent against the yen. The rand’s decline is fueling speculation the central bank will act more aggressively at its policy meeting this month.
-U.S. bonds winning, for now: The U.S.’s biggest overseas creditor, China, is selling down its holdings of Treasuries. For now, at least, the market remains unconcerned about this as the push – China selling – is being outweighed by the pull – safe-haven bid amid concerns about global growth, caused, ironically enough by China. Globally, the story is much the same with bond yields falling to an eight-month low.
CNN Money
-China slides further: The main stock markets in China plunged again. The Shanghai Composite closed down 5.3%, and the Shenzhen Composite ended 6.6% lower. The grim day of trading followed steep declines in Chinese stocks last week amid worries over the country’s weakening currency and slowing economy. Weekend data provided more evidence of softer demand. Consumer prices rose by just 1.4% in 2015, their slowest pace in six years and well below the government’s 3% target, state news agency Xinhua reported.
– Stock market movers — Illumina, Apple: Shares in the DNA sequencing company llumina Inc. (ILMN) are up 3% in premarket trading, after it announced a $100 million spin-off. The new company, called Grail, will aim to develop a simple blood test to identify cancers in patients with no symptoms. Illumina secured an array of high profile investors, including Bill Gates and Jeff Bezos. Apple (AAPL, Tech30) is edging up 0.7% premarket after a report that its music subscription service has reached 10 million subscribers. The stock plunged below $100 a share last week, for the first time since October 2014.
– Earnings: Aluminum maker Alcoa (AA) is reporting its fourth quarter results after the close on Monday. The company has been struggling with low commodity prices. Alcoa announced last week it was closing its Warric Operation in Indiana, the largest facility of its kind in the world.
-International markets overview: European markets are edging higher in early trading. The FTSE100 is up 0.2%, while Germany’s DAX is up 1.1%. Asian markets ended the session lower. Hong Kong’s Hang Seng closed 2.8% lower, while Korea’s Kospi was down 1.3%. Oil is plunging 1.5% Monday, to just above $32.50 per barrel and near a 12-year low hit last week.
-Last week market recap: The Dow Jones industrial average lost 1,079 points last week week, or over 6%. It was the Dow’s worst start to a year on record, according to Dow Jones. The S&P 500 and the Nasdaq both lost roughly 1%.