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Shares steady with U.S. bank earnings in sight

Published 10/13/2020, 07:36 PM
Updated 10/14/2020, 04:50 AM
© Reuters. FILE PHOTO: A TV reporter stands in front of a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Toky

© Reuters. FILE PHOTO: A TV reporter stands in front of a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Toky

By Carolyn Cohn

LONDON (Reuters) - European shares held steady on Wednesday, underpinned by gains for Wall Street futures, following losses the day before on vaccine trials and a stimulus impasse, while the dollar was also stable.

The pan-European STOXX 600 (STOXX) was unchanged in early trading, and markets in Frankfurt (GDAXI), London (FTSE) and Paris (FCHI) were steady to higher.

Markets had little direction as they grappled with "angst about vaccine/antibody delays, angst about rising covid cases in Europe, stalled U.S. fiscal talks, stalled Brexit trade talks", said Kit Juckes, macro strategist at Societe Generale (OTC:SCGLY).

Wall Street futures (ESc1) were up 0.4%, however, with U.S. banks Goldman Sachs (N:GS), Wells Fargo (N:WFC) and Bank of America (N:BAC) scheduled to report results on Wednesday, following above-estimate earnings from JPMorgan (N:JPM) and Citigroup (N:C) in the previous session.

Stock market losses began on Wall Street Tuesday when Johnson & Johnson (N:JNJ) said it was pausing a COVID-19 vaccine trial after a study participant suffered an unexplained illness.

Eli Lilly and Co (N:LLY) later said it too had paused the clinical trial of its COVID-19 antibody treatment because of a safety concern, leading the U.S. equity market to deepen losses.

J&J shares lost 2.3%, and Eli Lilly closed down nearly 3%.

Hopes for the passage of a new coronavirus relief package also faded as U.S. House Speaker Nancy Pelosi rejected a $1.8 trillion relief proposal from the White House.

"U.S. stimulus talks are still going nowhere, dimming the prospect of a new round of support this side of the election," said Sydney-based NAB strategist Rodrigo Catril.

In addition, investors are watching tensions between the European Union and Britain after the EU demanded "substantive" movement on Tuesday on fisheries, dispute settlement and guarantees of fair competition in their talks on a post-Brexit trade deal.

Sterling declined the most among major currencies, down 0.4% against the euro (EURGBP=), the dollar and yen (GBPJPY=). EU leaders will hold a summit in Brussels on Thursday and Friday to assess progress.

Euro zone August industrial production data is due on Wednesday.

Graphic - World stocks fighting off the virus: https://fingfx.thomsonreuters.com/gfx/mkt/azgvojmyjpd/Pasted%20image%201602663581213.png

BREATHER

Oil slipped on concerns that fuel demand will continue to falter on concern rising coronavirus cases across Europe and in the United States, the world's biggest oil consumer, will impede economic growth.

Brent (LCOc1) and U.S. crude (CLc1) were off around 0.5% at $42.24 and $39.97 a barrel, respectively.

The U.S. dollar was steady after its best day in three weeks on Tuesday, when its index (=USD) against a basket of six major currencies rose 0.5%. The index was last 0.1% higher at 93.62. The euro (EUR=) was barely changed at $1.1734.

Government bonds were also seeing small moves (DE10YT=RR) (US10YT=RR), though German bund yields, which move inversely to prices, dipped to their lowest since May [EUR/GVD]. Gold, another safe haven, picked up 0.26% .

MSCI's broadest index of Asia-Pacific shares outside of Japan (MIAPJ0000PUS) had tracked Wall Street's losses overnight to end a seven-day rally.

© Reuters. Pedestrians pass the London Stock Exchange in London

The index was last down 0.25%, having toppled from a two-and-a-half-year high of 588.76 touched on Tuesday. Chinese shares (CSI300) closed down 0.7%.

Latest comments

Now, people should know why the stock market is forward looking, not just because of human greedy nature of fighting for money gains, but mainly to provide made-up reason for retail investors to buy stocks on the path of this typical hope, hype, false hope, and back-to-reality, ....in between, who earn the most of money?Very obvious! The casino house!
CNN reporting all this covid rebounce hysteria. going back to covid stocks (ZM)
Nothing to do with CNN, nothing to do with hysteria. I work and live in Europe and Covid is definitely making a comeback here, in many countries. Countries are taking new, strict measures again. Expect the same to happen in US in a couple of weeks/months
the markets will be sent higher on the hopes of mitch mcconnell's bald display of cynicism of forcing a vote on a stimulus bill that is all but stillborn.
If Biden win better take all your profits by end of December. Otherwise Biden will take your profits away with taxes.
Or else, Trump will. loss loss either way
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