🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Stocks Start To Slide As Virus Fears Weigh

Published 11/19/2020, 07:09 AM
Updated 07/09/2023, 06:31 AM
EUR/USD
-
XAU/USD
-
DE40
-
JP225
-
GC
-
CL
-
US10YT=X
-
USO
-
BTC/USD
-
  • Equities drift lower
  • Euro steady but EU battle rages
  • Nikkei -0.37% Dax -1.04%
  • UST 10Y 0.85
  • Oil $41.19
  • Gold $1858/oz.
  • BTC/USD $17391/oz.
  • US

    Equity markets were lower in Asian and early European trade as COVID fears once again weighed on investor sentiment.

    With coronavirus infections showing no signs of slowing many medical systems in the US and Europe are coming under unsustainable stress forcing governments in those regions to consider further lockdown measures. Even without formal lockdown measures mobility data suggests that consumers are retreating again and anecdotal data indicates that hoarding of staples in the US is once again becoming a problem on the supply chain.

    All of this suggests that the economic rebound from spring lows may be in danger of slowing as economic activity is clearly becoming curtailed.

    For now, equities have been supported by easy monetary policy and the prospect of additional fiscal stimulus, but with the atmosphere in Washington DC poisoned by Trump’s refusal to acknowledge that he lost the Presidency the chance of any significant spending package has been reduced significantly. The move is further complicated by the focus on the Senate runoff election in Georgia where the outcome can shift the power structure in Congress.

    Today’s US weekly jobless data could provide clues as to whether the economic slowdown is taking place with markets looking for little change from last week’s 709K number. However, if claims rise the news could provide the catalyst for further selloff as the day proceeds.

    Meanwhile, in Europe, the wrangling continues over the stimulus package as Poland and Hungary vetoed the EU budget over the clause on the rule of law. Some European diplomats believe that both Warsaw and Budapest are bluffing as both economies badly need the stimulus funds but in Eastern Europe, the political sentiments often trump economic considerations and there is a very real chance that they could scuttle the deal in which case the rest of the EU would need to consider rewriting the languages or cutting Hungary or Poland out of the package altogether which only intensify the strains on the union.

    For now, the EUR/USD remains firm around 1.1800 as markets continue to view the latest drama as just a distraction, and given the critical need for stimulus it’s doubtful Hungary and Warsaw could kill the deal, but any further delay could start to put further selling pressure on the pair and it could drift below 1.1800 if tensions persist.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.