Stocks Slip as Virus Hits Confidence; Dollar Falls: Markets Wrap

This content was published on October 27, 2020 – 14:30

(Bloomberg) — U.S. stocks slumped as a surprise drop in consumer confidence and growing coronavirus infections damped sentiment. The dollar slipped.

The S&P 500 Index headed lower a day after its worst loss in a month, dragged down by energy and industrial shares. Tech stocks outperformed after Advanced Micro Devices Inc. announced a $35 billion takeover of rival chipmaker Xilinx Inc. Merck & Co. gained after raising its profit forecast.

The Stoxx Europe 600 Index headed toward its lowest close since June amid concern about the faster spread of the coronavirus on the continent. BP Plc warned of many challenges ahead as the pace of recovery in oil demand remained uncertain.

Stocks have been knocked around in recent weeks by speculation about whether lawmakers will pass a fiscal stimulus package, but with almost no possibility of that happening before Americans vote Nov. 3, investors were looking for fresh insight into corporate America’s health. A U.S. consumer confidence report came in worse than forecast Tuesday as the coronavirus infects tens of thousands of Americans daily and weighs on the economy.

“Covid case counts and hospitalizations continue to rise — these will continue to be closely watched as investors gauge the likelihood of more stringent mitigation measures,” said Yousef Abbasi, global market strategist at StoneX.

Elsewhere, crude oil nudged higher. Bitcoin rose toward $13,500, approaching levels not seen since just after the burst of the cryptocurrency market bubble almost three years ago.

These are some events to watch this week:

  • The Chinese Communist Party’s Central Committee holds its all-important plenum, where it’s expected to chart the course for the economy’s development for the next 15 years. Through Oct. 29.
  • Brexit negotiating teams have started intense daily negotiations, and these are likely to continue as both sides push to finalize a deal by the middle of November.
  • Bank of Japan and the European Central Bank have monetary policy decisions Thursday, followed by briefings from Governor Kuroda and President Lagarde.
  • The first reading of U.S. 3Q GDP Thursday is anticipated to be the strongest on record following a record dive in the prior quarter as many businesses were shuttered by the pandemic.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index fell 0.2% as of 10:28 a.m. New York time.
  • The Stoxx Europe 600 Index decreased 0.8%.
  • The MSCI Asia Pacific Index was little changed.

Currencies

  • The Bloomberg Dollar Spot Index dipped 0.2%.
  • The British pound rose 0.1% to $1.3032.
  • The Japanese yen strengthened 0.2% to 104.64 per dollar.

Bonds

  • The yield on 10-year Treasuries dipped one basis point to 0.79%.
  • Germany’s 10-year yield decreased one basis point to -0.59%.
  • Britain’s 10-year yield fell one basis point to 0.26%.

Commodities

  • West Texas Intermediate crude added 1% to $38.93 a barrel.
  • Gold strengthened 0.2% to $1,906.20 an ounce.

©2020 Bloomberg L.P.

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