Stocks down as markets await U.S. stimulus
Stocks slipped on Thursday as investors waited for signs of agreement on a U.S. stimulus package, while the U.S. dollar slumped to a two-year low on fears that the recovery in the world’s biggest economy was lagging others.
European stocks edged down in volatile trading, with Frankfurt gaining 0.2% as investors digested a fresh batch of corporate earnings reports. The broad Euro STOXX 600 fell 0.2% after opening in the black. London’s lost 1.3% as the pound jumped to a 5-month high after the Bank of England kept interest rates steady and signalled that a move to subzero territory was not imminent.
Siemens jumped 2.9% as its CEO said it was seeing an improvement in its business in China, even if the United States was less clear. S&P 500 futures pointed to gains of 0.2%. The MSCI world equity index, which tracks shares in 49 countries, slipped narrowly into the red, with prospects of a fourth straight day of gains in doubt.
The mood in Europe reflected that in Asia, where stocks outside Japan rose to a six-and-ahalf month peak before giving up some of those gains. Markets are waiting direction on the shape of a U.S. fiscal recovery package, currently subject to political wrangling in Washington, said Hugh Gimber, global markets strategist at J.P. Morgan Asset Management.
Top congressional Democrats and White House officials appeared to harden their stances on the relief plan on Wednesday, with few hints of compromise or that an unemployment benefit as generous as $600 a week could be reinstated.
Fears that economic recoveries across major economies are diverging have been playing out in currency markets, with the dollar’s two-year supremacy at risk. With figures on jobless claims in the U.S. labour market looming at 1230 GMT, the dollar fell to a two-year low as investors weighed whether the U.S. economic recovery from the coronavirus hit was lagging other major economies.
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