In this news, we discuss the Asian shares, U.S. stock futures sag on coronavirus, U.S. election worries.
TOKYO (Reuters) – Global stocks slipped on Wednesday as coronavirus infections rose at an alarming rate in the United States and Europe, while uncertainty over next week’s U.S. election added to a tone of “Risk of absence”.
The MSCI Ex-Japan Asia Index fell 0.15% at the start of trading while Japan’s Nikkei fell 0.6%.
Futures on the US S & P500, Dow Jones and Nasdaq all fell 0.5% to 0.6% in Asian trading on Wednesday, rocked by a media report that the French government may proceed to a nationwide lockdown from midnight Thursday.
The United States, Russia, France and other countries have seen record numbers of infections in recent days, and European governments have introduced new brakes to try to curb the rapidly growing outbreaks.
Data on Tuesday showed that U.S. consumer confidence fell unexpectedly in October, although other economic numbers were mostly positive, with orders for key capital goods hitting a six-year high.
The drop in US equity futures came after a mixed session on Wall Street, where the S&P 500 lost 0.30% on virus concerns while the high tech Nasdaq Composite added 0.64 %.
Microsoft has launched a slew of tech heavyweight reports beating Wall Street estimates for quarterly revenue, backed by its flagship cloud computing company amid rising work-from-home deals. But its shares slipped 1.7% after the bell.
Apple Inc, Amazon.com, and Google-parent Alphabet are among the top tech players reporting later this week.
MEMORY OF 2016
Investors seemed content to avoid risk with looming uncertainty, highlighted by the US presidential election on November 3.
While former Vice President Joe Biden enjoyed a steady lead over President Donald Trump, investors were wagering cautiously on his victory and possibly a “blue wave” outcome, where Democrats also take over the Senate.
Still, the presidential race is closer in the battlefield states that could determine the outcome, leaving investors on edge.
“It looks like the gap between Biden and Trump has narrowed a bit lately. In particular, Biden’s lead in the swing states doesn’t look all that different from (Democratic candidate) Hilary Clinton in 2016, ”said Nobuhiko Kuramochi, market strategist at Mizuho Securities.
“People still remember the experience of 2016 and those who bet on a blue wave are probably taking profits now before the event,” he added.
The Wall Street Volatility Index, a measure of market expectations for stock price movements, rose to 33.35, its highest level in nearly two months.
Some market participants see this as a sign that more investors are wary of the possibility that the election outcome could be challenged, possibly leaving markets in limbo for weeks.
This would likely further delay any negotiation over the economic relief plan that U.S. policymakers are struggling to agree on. Trump acknowledged that an economic back-up plan would likely come after the Nov. 3 election.
In the currency market, the euro edged down amid fears of a possible lock-up in France, trading at $ 1.1779, down 0.15%.
The safe haven yen is well supported at 104.42 yen to the dollar, not far from its six-month high of 104 hit last month.
Investors also bought back US Treasuries, another safe haven asset, which lowered their yields.
The benchmark 10-year yield fell to 0.766%, down 1.2 basis points so far on Wednesday and well below its 4.5-month high of 0.872% reached on Friday.
Gold was little changed at $ 1,906.0 an ounce.
Oil prices gave up much of their gains made the day before as a rise in US crude inventories and a surge in COVID-19 cases raised fears of oversupply of oil and weak demand for fuel. .
At 0205 GMT, Brent was trading down 1.9% to $ 40.42 per barrel, while US crude fell 2.3% to $ 38.67 per barrel.
Reporting by Hideyuki Sano; additional reporting by Pete Schroeder; edited by Richard Pullin
Original © Thomson Reuters