This content was published on November 19, 2020 – 11:57
(Bloomberg) — Global stocks slumped for a third day as tougher virus restrictions from New York City to South Australia fueled concern about the pandemic’s economic toll.
S&P 500 futures edged lower, while declines were steeper in Europe with cyclical shares taking the brunt of the retreat. Norwegian Air Shuttle ASA plunged 16% after seeking protection from creditors. Germany’s Thyssenkrupp AG tumbled after saying it would slash 11,000 jobs amid a cash burn at its steel business. Nvidia Corp. dropped in U.S. pre-market trading after warning that data-center chip sales will decline slightly.
The dollar index strengthened from a two-year low and Treasuries advanced. Gold dropped for a fourth day amid a drawdown in bullion-backed exchange-traded funds.
No Upside for Europe Stocks Has Strategists Looking to 2021
The bullish fever that lifted the MSCI World Index to an all-time high on Monday is starting to soften, with virus cases surging in many parts of the world and public health facilities being pushed to the brink. New York City has announced it will close schools and South Australia began one of the world’s toughest lockdowns, with even outdoor exercise and dog-walking banned. In Tokyo, the virus alert was raised to the highest levels as daily infections topped 500 for the first time.
It all means that investors are grappling with how long and how severe the pandemic will be in the months ahead. There’s plenty of economic stress now as businesses struggle under lockdowns, but scientists are also rapidly advancing several vaccine candidates to get life back to normal.
“We are expecting tough times in coming months because of the resurgence of cases, but in terms of the longer term recovery path, the vaccine was a very important news milestone,” Melda Mergen, the deputy global head of equities at Columbia Threadneedle Investments, said on Bloomberg TV. “We think that the cyclical recovery is going to come back but there are going to be some bumps along the road.”
In other markets, the MSCI Asia Pacific Index fell for the first time in 14 days, ending the longest winning run since 1988. Commodities dropped and Bitcoin pulled back after surging past $18,000 on Wednesday.
Turkey’s lira strengthened after the country’s new central bank governor raised the benchmark interest rate.
Here are some events to watch out for this week:
- Brexit talks look set to continue as the U.K. and EU approach the latest deadline.
- Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Through Nov. 19.
- Data on U.S. weekly job claims and existing home sales for October are due Thursday.
These are the main moves in markets:
- Futures on the S&P 500 Index were little changed at 6:55 a.m. New York time.
- The Stoxx Europe 600 Index fell 0.7%.
- The MSCI Asia Pacific Index declined 0.5%.
- The MSCI Emerging Market Index decreased 0.8%.
- The Bloomberg Dollar Spot Index rose 0.2% to 1,150.95.
- The euro fell 0.1% to $1.1836.
- The British pound dipped 0.1% to $1.3259.
- The Japanese yen weakened 0.2% to 104.03 per dollar.
- The yield on 10-year Treasuries sank two basis points to 0.85%.
- The yield on two-year Treasuries dipped less than one basis point to 0.17%.
- Germany’s 10-year yield fell two basis points to -0.57%.
- Britain’s 10-year yield declined less than one basis point to 0.333%.
- West Texas Intermediate crude dipped 0.4% to $41.44 a barrel.
- Gold weakened 0.5% to $1,863.38 an ounce.
©2020 Bloomberg L.P.