Equities slip, bonds rise ahead of U.S. presidential debate

In this news, we discuss the Equities slip, bonds rise ahead of U.S. presidential debate.

NEW YORK (Reuters) – Global equity benchmarks slipped and government bonds edged up on Tuesday as investors remained hesitant ahead of the first U.S. presidential debate and monitored progress in negotiations for further fiscal stimulus in Washington.

As time is running out to change their mind or influence undecided voters, the stakes are high as the top two White House candidates take the stage tonight, five weeks before the November 3 election.

Former Vice President Joe Biden’s campaign has seized a new line of attack on the eve of the debate with President Donald Trump – expected after the US market has closed – accusing the incumbent Republican of playing with it the system to avoid paying their fair share of taxes.

Many see a Biden victory increasing the odds of further fiscal stimulus to counter the economic damage from the COVID-19 pandemic, deeming such a scenario as a boon to stocks.

“What seems clear is that if you saw a blue wave, a Democratic sweep, you would see a substantial fiscal stimulus,” said Mike Bell, global market strategist at JP Morgan Asset Management. “The risk, I have always thought, of this recovery is premature fiscal tightening.”

“Tonight’s debate will be critical, as it represents one of the last decisive opportunities for either candidate to change the contours of the race,” Deutsche Bank analysts wrote in a note.

The MSCI indicator of equities across the world .MIWD00000PUS lost 0.03% following large declines in Europe and Asia. Sectors in negative territory included growth-sensitive banks .SX7P, automakers .SXAP and travel and leisure .SXTP, all down 0.8% to 1.5%.

In morning trading on Wall Street, the Dow Jones Industrial Average .DJI fell 25.73 points, or 0.09%, to 27,558.33, the S&P 500 .SPX fell 3.18 points, or 0.09 %, at 3,348.42, and the Nasdaq Composite .IXIC lost 14.25 points, or 0.13%, to 11,103.27.

As global COVID-19 death toll topped 1 million, according to Reuters tally, investors remained focused on prospects for a stimulus package to help the U.S. economy recover from damage by the virus.

U.S. House of Representatives Speaker Nancy Pelosi said Monday that Democratic lawmakers unveiled a new $ 2.2 trillion coronavirus relief bill. Pelosi has said in recent days that she believes a deal can be made with the White House on a new coronavirus relief program and that talks are continuing.

Stimulus plans were also the focus of concerns in bond markets, where the German 10-year bond yield DE10YT = RR fell to its lowest in seven weeks before the first inflation estimates for September.

The US 10-year benchmark US10YT = RR notes last rose 2/32 in price to yield 0.6561%, compared to 0.663% on Monday night.

The dollar = USD index fell 0.05%, the euro EUR = was up 0.27% to $ 1.1695.

Oil prices have slipped as investors are reluctant to take risks.

U.S. CLc1 crude fell 1.38% to $ 40.04 a barrel and Brent LCOc1 was at $ 42.28, down 0.35% on the day.

Reporting by David Randall; Edited by Steve Orlofsky

Original © Thomson Reuters

Originally posted 2020-09-29 07:36:11.

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