Growing pessimism over the coronavirus vaccine adding to the downbeat tone among investors
Wall Street stocks closed lower on Wednesday after comments from Steven Mnuchin. The Treasury Secretary said that getting a coronavirus stimulus deal done before the election would be difficult, adding that both sides were still far apart on certain issues. Growing pessimism over the coronavirus vaccine adding to the downbeat tone among investors. As a result, the S&P 500 fell 0.66%, the Dow Jones Industrial Average lost 0.6% and the Nasdaq Composite slid 0.8%.
Asian markets followed suit and posted huge losses for a second consecutive day on Thursday. Apart from the continuing political stalemate in Washington over a new coronavirus relief bill, comments from China added to the selling pressure surrounding stocks. The Chinese foreign ministry said it will take countermeasures if the US insists on sanctions to banks over the Hong Kong crackdown. The Nikkei 225 index in Japan fell 0.5%, the Kospi index in Seoul finished down 0.6%, while the S&P/ASX index in Australia finished up 0.5%.
In Europe, stocks opened lower, with investors worrying about resurgent COVID-19 infections as well as troubled Brexit talks and political uncertainty in the US. New cases have hit 100,000 daily in Europe. Nearly 20,000 infections were reported in the UK, while the French government declared a public health state of emergency on Wednesday.
As for currencies, the safe-haven dollar demand reemerged as risk sentiment has deteriorated further. As a result, EURUSD dipped to early-October lows around the 1.17 mark. If this support gives up, the euro could see deeper losses in the short term. Later today, the US jobless claims data could affect short-term dynamics in the pair.
Meanwhile, oil prices edged lower after yesterday’s rally. Brent crude has retreated below $43, threatening the 100-DMA during the European hours. The American Petroleum Institute said U.S. crude stockpiles fell by 5.4 million in the week to October 9, nearly double market expectations. However, the report failed to furl sustained gains in prices as traders have proceeded to profit-taking after a short-lived rally. The U.S. Energy Information Administration is due to release its weekly data later today.
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