The hours-long outage has left many traders effectively flying blind
by Andre Janse van Vuuren and Macarena Muñoz
The S&P 500 was on course for its first monthly loss since April before a technical outage at the Chicago Mercantile Exchange disrupted trading.
Futures for the US benchmark were little changed before the issue started. A data center fault affected multiple markets, including crude oil and Treasury futures. Single stocks traded without incident in the premarket, with names like Alphabet Inc. and Amazon.com Inc. edging higher.
After a volatile start to November, the S&P 500 narrowed its loss to about 0.4% before the Thanksgiving break. The late-month rebound was fueled by expectations that the Federal Reserve will cut interest rates faster than earlier anticipated.
The gauge had been down as much as 4.7% in November barely more than a week ago, as worries over stretched technology valuations rattled traders. Money markets were assigning roughly an 80% chance of a Fed cut in December, before the CME disruption hit.
Moves across global equities were muted. Europe’s Stoxx 600 was little changed, while an Asian gauge trimmed gains after a four-day rally. Treasuries held steady and the dollar headed for a small gain.
“Some market participants will take advantage of possible differences in prices,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “The majority will pause trading for risk reasons until the issues are resolved, otherwise losses are possible.”
The hours-long outage has left many traders effectively flying blind. Millions of contracts tied to the S&P 500, Dow Jones Industrial Average and Nasdaq 100 change hands almost around the clock on CME, one of the world’s biggest derivatives venues.
A spokesman for the exchange said the disruption stemmed from cooling problems at data centers operated by CyrusOne, the Dallas-headquartered provider. They didn’t give a timeline for when trading would resume.
“It’s a half-day in the US after Thanksgiving. It’s not the most liquid day in any event, and this probably will not have helped with liquidity,” said Robert Schramm-Fuchs, a portfolio manager at Janus Henderson.
What Bloomberg Strategists Say...
“For now we are in somewhat of a holding pattern ahead of the limited return of the US to market. Traders will be hoping that the outage is resolved before certain US cash markets come online later.”
— Adam Linton, macro strategist. For full analysis, click here.
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- Julius Baer Group Ltd. Chief Executive Officer Stefan Bollinger was questioned by the bank’s board of directors over negative feedback in an internal employee survey, underlining the headwinds he’s facing in his bid to turn the lender around.
- Nexperia warned that customers across industries are facing impending production halts, while calling on its Chinese unit to take concrete steps to re-establish dialog.
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 9:58 a.m. London time
- The MSCI Asia Pacific Index fell 0.3%
- The MSCI Emerging Markets Index fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.2% to $1.1570
- The Japanese yen was unchanged at 156.31 per dollar
- The offshore yuan was little changed at 7.0721 per dollar
- The British pound fell 0.2% to $1.3212
Cryptocurrencies
- Bitcoin rose 0.1% to $91,535.17
- Ether rose 0.7% to $3,053.11
Bonds
- The yield on 10-year Treasuries was little changed at 4.00%
- Germany’s 10-year yield was little changed at 2.68%
- Britain’s 10-year yield was little changed at 4.45%
Commodities
- Brent crude rose 0.2% to $63.47 a barrel
- Spot gold rose 0.2% to $4,167.13 an ounce
This story was produced with the assistance of Bloomberg Automation.
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