- Stocks wobbled on Thursday as investors were spooked by a “stunning” rise in coronavirus cases and the International Monetary Fund’s further diminished world economic outlook this year.
- US stocks are set to open slightly down as futures tied to major indexes fell only as much as 0.3%.
- “The harsh dose of Covid-19 reality capped a lousy night for the US, and by association, world markets,” a senior Asia Pacific market analyst at OANDA said.
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Global stocks were shaky on Thursday as investors weighed the possibility of a rapid rise in US coronavirus cases leading to reimposed shutdowns, and a bleak economic outlook from the IMF.
On Wednesday, the US outpaced its highest single-day total of new infections by over 36,000. The bulk of new cases emerged from Florida, California, and Texas.
Futures tied to the S&P 500 fell 0.3%. European indexes reversed early losses as the pan-continental Euro Stoxx 50 rose 0.3%, and Germany’s DAX rose 0.4%.
Case counts also rose abroad in New Zealand, Australia, Germany, South Korea, and China adding to a “harsh dose of COVID-19 reality” that capped the previous day’s global stock market decline, said Jeffrey Halley, a senior market analyst at OANDA.
Investor fears were also fueled by the IMF projecting an even deeper global recession than expected in April, with global gross domestic product expected to contract 4.9% this year. That is down from its previous forecast of -3% in April.
One analyst said the rapid rise in new infections in the US is both “stunning and unsurprising.”
“It didn’t take a genius to foresee this happening, with the country headed up by a leader who puts winning elections first, the economy second and, at best, human life a distant third,” Connor Campbell, a financial analyst at SpreadEx, said in a note.
What remains doubtful is whether a stricter lockdown will be reimposed as President Trump may not be keen to double-down on the economic toll caused by the first round of restrictions, Campbell said.
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Here’s the market roundup as of 10.50 a.m in London (5.50 a.m. ET):
- Asian indexes were mostly down with China’s Shanghai Composite flat, Hong Kong’s Hang Seng down 0.5%, and Japan’s Nikkei down 1.2%.
- European equities were mixed, with Germany’s DAX up 0.4%, Britain’s FTSE 100 down 0.1%, and the Euro Stoxx 50 up 0.3%.
- US stocks are set to open slightly lower. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq fell 0.3%.
- Oil prices fell, with West Texas Intermediate down 0.6% at $37.75, and Brent crude down 0.3% at $40.19.
- The benchmark 10-year Treasury yield fell to 0.66%.
- Gold fell 0.2% to $1,771 per ounce.
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