Cautious equities mired on virus, Brexit, US stimulus worries

Global markets found little inspiration on Wednesday, October 14, as they weighed fading United States stimulus hopes, stubborn coronavirus worries, and growing uncertainty over Britain’s post-Brexit trade with the European Union (EU).

Wall Street spent the morning slowly climbing upwards then reversed course when US Treasury Secretary Steven Mnuchin said the White House and congressional Democrats remain “far apart” in discussion on another stimulus package.

“When Mnuchin commented over the stimulus, it hit the wire and the market sold off,” said Quincy Krosby, chief market strategist at Prudential.

The Dow closed 0.6% lower, while the Nasdaq lost 0.8%.

Across the Atlantic, sterling recovered a little ground against the dollar after faltering, as a deadline set by the British to reach a post-Brexit trade deal approaches on Thursday, October 15, with no sign of a breakthrough in talks amid media reports they could be extended.

Noting new virus restrictions in Europe and beyond, ThinkMarkets analyst Fawad Razaqzada cautioned that “at this rate, there is a good chance economic recovery will stall in Europe and investors are evidently responding by reducing their exposure on the euro and European stock.”

London and Paris also sagged while Frankfurt closed just 0.1% ahead after Tuesday, October 13, had brought declines all round on the worsening coronavirus crisis.

Virus concerns have returned to the fore amid a surge in new infections and the halting of two vaccine trials, denting hopes for a cure or treatment being developed anytime soon.

The announcements “had a dampening effect on the market that is looking for signs and positive announcements,” Krosby said of US stocks.

The COVID-19 resurgence in recent weeks has led to mounting fears for the economic recovery, particularly in Europe where governments are resorting to new controls while trying to avoid the devastating nationwide lockdowns of March and April.

The Netherlands was set to go into “partial lockdown” on Wednesday, with all bars, cafes, and restaurants to close for at least two weeks, while French President Emmanuel Macron ordered a nighttime curfew for Paris and 8 other French cities.

Online coronavirus shopping boom

Earnings season was underway, with Goldman Sachs posting a 94% net income surge from the year-ago period in the 3rd quarter, following similarly positive results from Citigroup and JPMorgan.

In London, there was strong evidence of key internet-focused businesses benefiting from virus lockdowns.

Anglo-Dutch online food delivery service Just Eat Takeaway revealed orders rocketed 46% in the 3rd quarter, compared with a year earlier.

The company, which competes with Deliveroo and Uber Eats, saw its share price jump 5.25% to 9,306 pence.

Online fashion retailer ASOS said pre-tax profits more than quadrupled to £142.1 million ($185 million, 157 million euros) in its financial year to the end of August, and sales soared by a fifth.

Key figures around 8:30 pm GMT

• New York – Dow Jones: DOWN 0.6% at 28,514.00 (close)
• New York – S&P 500: DOWN 0.7% at 3,488.67 (close)
• New York – Nasdaq: DOWN 0.8% at 11,768.73 (close)
• London – FTSE 100: DOWN 0.6% at 5,935.06 (close)
• Frankfurt – DAX 30: UP 0.1% at 13,028.06 (close)
• Paris – CAC 40: DOWN 0.1% at 4,941.66 (close)
• EURO STOXX 50: DOWN 0.2% at 3,273.28 (close)
• Tokyo – Nikkei 225: UP 0.1% at 23,626.73 (close)
• Hong Kong – Hang Seng: UP 0.1% at 24,667.09 (close)
• Shanghai – Composite: DOWN 0.6% at 3,340.78 (close)
• Euro/dollar: FLAT at $1.1746 from $1.1746 at 9 pm GMT
• Pound/dollar: UP at $1.3018 from $1.2937
• Dollar/yen: DOWN at 105.13 yen from 105.48 yen
• Euro/pound: DOWN at 90.22 pence from 90.79 pence
• West Texas Intermediate: UP 2.1% at $41.04 per barrel
• Brent North Sea crude: UP 2% at $43.31

– Rappler.com