By Peter Nurse
Investing.com - U.S. stocks are seen opening sharply lower Thursday, following weakness in Europe, with the market ruling out the chance of more fiscal stimulus before the November elections despite a surge in coronavirus cases.
At 7 AM ET (1100 GMT), S&P 500 Futures traded 34 points, or 1%, lower, the Dow Futures contract fell 270 points, or 1%, while Nasdaq 100 Futures dropped 161 points, or 1.4%.
These cash indices all closed lower Wednesday, registering their first back-to-back down sessions in three weeks.
Losses have been severe in Europe Thursday, with the main indices all dropping over 2%. This has been based on worries that the resurgence in cases of the Covid-19 virus will result in more lockdowns in the region’s economies, stopping the economic recovery.
"In Europe you just have a long list of quite notable actions being taken, with Paris and other French cities going into curfew, and today reports that London is going to the next, high level phase of restrictions," said Derek Halpenny, head of research at MUFG, in a Reuters report.
"It's all pointing to a greater hit to fourth quarter activity and warrants a degree of adjustment in market pricing."
Adding to the woes are the vanishing chances of additional U.S. stimulus ahead of the elections in early November.
"Getting something done before the election and executing on that would be difficult," U.S. Treasury Secretary Steve Mnuchin said on Wednesday, adding that he and Democrat House Speaker Nancy Pelosi are still "far apart" on their spending priorities.
Turning to economic data, the latest news on weekly new unemployment claims will be released at 8:30 AM ET (1230 GMT), with initial claims expected to be 825,000, down slightly from the 840,000 reported for the previous week. Continuing claims are expected to be 10.7 million, also down slightly from 10.9 million the prior week.
In corporate news, there are earnings reports from the likes of Charles Schwab (NYSE:SCHW) and Kimberly-Clark (NYSE:KMB). Elsewhere, the tech sector is likely to be in focus after France and the Netherlands called for the creation of a European Union authority to regulate the big tech companies, such as Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB).
Oil prices weakened Thursday on concerns about the rising number of coronavirus cases and the impact this could have on demand.
The U.S. Energy Information Administration is due to release its weekly data later Thursday. Also of interest will be the meeting of the Organization of the Petroleum Exporting Countries’ joint technical committee meeting later in the day, to discuss the group’s production levels.
U.S. crude futures traded 2.3% lower at $40.09 a barrel, while the international benchmark Brent contract fell 2.1% to $42.41.
Elsewhere, gold futures fell 0.4% to $1,900.15/oz, while EUR/USD traded 0.2% lower at 1.1713.