The Dow Jones Industrial Average futures fell more than 600 points, pointing towards a Monday opening loss of around 637 points and S&P 500 index and Nasdaq-100 futures also pointed to losses at the Monday open.
The futures hit their “limit down” levels, earlier in the session, declining 5%. The downside limits to futures contracts are executed to ensure the orderly market behavior once trading hits a certain threshold. In the market no trades below that level are allowed.
On Sunday, a fiscal stimulus bill failed a key procedural Senate vote as Democrats warned the measure did not do enough to help the workers and too much to bail out companies. Earlier in the House the speaker Nancy Pelosi had signaled she was not on board with Republican version of the stimulus plan, saying: “From my standpoint, we’re apart.”
The Senate Minority Leader Chuck Schumer, D-NY, said that the disagreements over the bill could be overcome in next 24 hours. A spokesman for the Schumer later added the senator and Treasury Secretary Steven Mnuchin had a “productive meeting.”
The Director Larry Kudlow of National Economic Council said on Saturday an economic stimulus package will total more than $2 trillion, noting it will be equal to roughly 10 percent of U.S. economic output. President Donald Trump signed a $100 billion bill in last week that expanded paid leave in the U.S.
On Sunday, Mnuchin said that financing programs to stimulate the economy could be worth $4 trillion, noting that these efforts will include coordination with the Federal Reserve to provide the businesses with necessary liquidity.
On Monday, Asian markets and US stock futures fell as a massive stimulus package to help the Americans handle the coronavirus pandemic hit a major stumbling block.
Asia Pacific markets
The Australia’s S&P/ASX 200 tumbled as much as 8.6% on Monday, before clawing back some losses. It was last fell 5.6% and South Korea’s Kospi (KOSPI) dropped 3.4%. The Hong Kong’s Hang Seng Index (HSI) decline 3.8% while China’s Shanghai Composite (SHCOMP) lost 1.6%.
The Japan’s Nikkei 225 (N225) was the outlier, last trading are up 2.2%. The International Olympic Committee’s executive board said Sunday it is considering postponing but not canceling this summer’s Olympic Games in Tokyo because of the pandemic.
There is also pressure to take action and Canada said it won’t be sending teams to the Olympics this summer, and asked for the games to be postponed by one year.