Global stocks fell on Thursday, September 17, as markets digested cautious outlooks from central banks, while oil prices rallied again as Saudi Arabia’s top oil official called for compliance from other exporters on an Organization of the Petroleum Exporting Countries (OPEC) production agreement.
Though authorities in numerous countries have been recently upgrading their economic forecasts, central banks are warning that a quick, full recovery is far from assured.
Fed chief Jerome Powell told reporters late Wednesday, September 16, that although the recovery was looking better than anticipated, “overall activity remains well below its level before the pandemic and the path ahead remains highly uncertain,” and stressed the need for more stimulus.
Meanwhile, the Bank of England held rates steady on Thursday, but also gave its strongest hint yet that negative interest rates could be on the way, saying “the outlook for the economy remains unusually uncertain.”
For its part, the European Central Bank announced it was offering additional temporary relief to banks to help them cope with the impact.
In the United States, the tech-rich Nasdaq again led major indices lower, falling 1.3%.
Traders have been hoping that Congress would pass more economic stimulus, but comments from Democratic House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows suggested the two sides still remain far apart.
“It seems like both sides have dug in,” said Art Hogan, chief market strategist at National Securities, who added that the market had priced in a fiscal package of around $1.5 trillion that still shows no signs of coming to fruition.
Investor sentiment also has been dented by doubts over the timing of a coronavirus vaccine, Hogan said.
President Donald Trump has insisted that a vaccine will be ready by October, contradicting Centers for Disease Control and Prevention Director Robert Redfield, who said on Wednesday one would not be widely available until well into 2021.
“There’s a discrepancy on when we think there will be a vaccine broadly available,” Hogan said. “That’s pushing out the timing on renewed economic growth.”
Oil rises again
In Europe, London finished the day off by 0.5%, while Frankfurt shed 0.4% and Paris fell 0.7%.
Asian equities had mostly dropped following a broadly negative lead from Wall Street on Wednesday.
Oil prices jumped as a meeting of the OPEC+ group of crude producing nations got underway with a stern call for compliance with earlier production agreements from Saudi Arabia’s energy minister.
“Full compliance is not an act of charity,” Saudi Energy Minister Abdulaziz bin Salman said at a video conference of the expanded OPEC+ grouping of crude producing nations.
“It is an integral part of our collective effort to maximize the interest and gains of every individual member of this group.”
The minister lashed out at members who were not complying, saying they were bringing “harm to our reputation and credibility” without naming names.
The gains came after oil prices surged on Wednesday as some Gulf of Mexico producers suspended production due to Hurricane Sally.
Key figures around 8:45 pm GMT
- New York – Dow Jones: DOWN 0.5% at 27,901.98 (close)
- New York – S&P 500: DOWN 0.8% at 3,357.01 (close)
- New York – Nasdaq: DOWN 1.3% at 10,910.28 (close)
- London – FTSE 100: DOWN 0.5% at 6,049.92 (close)
- Frankfurt – DAX 30: DOWN 0.4% at 13,208.12 (close)
- Paris – CAC 40: DOWN 0.7% at 5,039.50 (close)
- EURO STOXX 50: DOWN 0.7% at 3,316.57 (close)
- Tokyo – Nikkei 225: DOWN 0.7% at 23,319.37 (close)
- Hong Kong – Hang Seng: DOWN 1.6% at 24,340.85 (close)
- Shanghai – Composite: DOWN 0.4% at 3,270.43 (close)
- Euro/dollar: UP at $1.1849 from $1.1816 at 9 pm GMT
- Pound/dollar: UP at $1.2987 from $1.2967
- Euro/pound: UP at 91.23 pence from 91.12 pence
- Dollar/yen: DOWN at 104.70 yen from 104.95 yen
- West Texas Intermediate: UP 2.6% at $43.30 per barrel
- Brent North Sea crude: UP 2.1% at $40.97 per barrel