This content was published on November 19, 2020 – 17:47
(Bloomberg) — U.S. stocks were mixed, with tech shares outperforming the broader market as investors weighed the impact of tougher virus restrictions on economic growth along with the outlook for widespread vaccine distribution within months.
The S&P 500 Index swung between small gains and losses, while the Nasdaq 100 climbed. Nvidia Corp. declined after warning that data-center chip sales will suffer. Tesla Inc. rose to a record. In Europe, cyclical shares led stocks lower. Norwegian Air Shuttle ASA plunged 16% after seeking protection from creditors amid the travel-industry upheaval caused by the pandemic.
Treasury yields slipped and the dollar held steady after U.S. weekly jobless claims came in higher than forecast. 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 Monday has softened, with virus cases surging in many parts of the world and public health facilities being pushed to the brink. New York City 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.
“There’s the push-pull of short-term versus long-term and that’s what investors are looking at right now,” said Chris Gaffney, president of world markets at TIAA Bank. “There are some very serious risks in the short term, especially with the lockdowns.”
In a report published Thursday, the International Monetary Fund noted progress on a vaccine, but also said elevated asset prices point to a disconnect from the real economy and a potential threat to financial stability.
“While global economic activity has picked up since June, there are signs that the recovery may be losing momentum, and the crisis is likely to leave deep, unequal scars,” officials at the Washington-based fund said. “Uncertainty and risks are exceptionally high.”
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 steadied after surging past $18,000 on Wednesday.
Turkey’s lira strengthened after the country’s new central bank governor raised the benchmark interest rate.
These are the main moves in markets:
- The S&P 500 Index slipped 0.3% at 12:46 p.m. New York time.
- The Stoxx Europe 600 Index fell 0.8%.
- The MSCI Asia Pacific Index declined 0.3%.
- The MSCI Emerging Market Index dipped 0.6%.
- The Bloomberg Dollar Spot Index climbed less than 0.1%.
- The euro declined 0.1% to $1.1846.
- The British pound decreased 0.4% to $1.3225.
- The Japanese yen was little changed at 103.83 per dollar.
- The yield on 10-year Treasuries decreased two basis points to 0.85%.
- Germany’s 10-year yield fell two basis points to -0.57%.
- Britain’s 10-year yield declined one basis point to 0.32%.
- West Texas Intermediate crude fell 0.9% to $41.46 a barrel
- Gold weakened 0.5% to $1,862.92 an ounce.
©2020 Bloomberg L.P.