Stocks decline as infections overshadow vaccine hopes
Wall St loses steam after recent record highs as Dow gives up some 1.2% two hours into trading
GLOBAL equity markets fell back Monday as hopes that vaccines will soon be rolled out were overshadowed by concerns over fears of a coming surge in US cases.
Oil prices remained under pressure going into a two-day meeting of major producers, traders concerned at the lack of an agreement on an extension of the output cuts that have provided support for most of the year.
World markets have surged this month thanks to breakthroughs on vaccines, while investors have also been cheered by oe Biden’s US presidential election win and signs that incumbent Donald Trump will allow a smooth transfer, despite claims of voter fraud.
But Wall Street lost steam after recent record highs as the Dow gave up some 1.2 percent two hours into trading with London and Paris seeing similar losses at the European close.
Frankfurt’s DA , having enjoyed a 15 percent rise on vaccine optimism across the month, limited its fall to 0.3 percent.
With at least three vaccines in the pipeline and approval in some countries said
to be just weeks away, there is optimism on trading floors as dealers forecast an economic rebound next year.
“Vaccines offer the promise that the major disruptions of the pandemic will fade from the scene in 2021,” said Axi strategist Stephen Innes. “Economic life will gradually heal the world will start to move on from all the human suffering that the virus has
wrought.”
Indications that a surge in new infections in Europe looks to be slowing were also providing some hope, as Britain and France prepare to ease some of their lockdown restrictions.
However, Trump’s top infectious diseases expert warned of a fresh jump in cases in the coming weeks after millions of Americans
ignored scientific advice and travelled around the country for Thanksgiving.
“There almost certainly is going to be an uptick because of what has happened with the travel,” Anthony Fauci told CNN’s State of the Union.
“We may see a surge upon a surge” in two or three weeks in the run-up to Christmas, Fauci said.
Parts of Asia are also seeing new spikes, with Hong Kong leaders warning the city is entering a fourth wave, while containment measures have been introduced in South Korea and apan.
Asian markets dropped at the start of the week, Hong Kong leading the losses with a 2.1 percent slide.
Oil traders are awaiting a meeting of OPEC and other major producers that starts Monday, hoping they agree to continue their output cuts for another few months as the global economy stutters.
However, observers said there was concern that so far there had been no sign they would do so.
The pound rose against the dollar as Britain and the European Union try to hammer out a post-Brexit trade deal, with just weeks to go before the end of the transition period.
“While my belief in a deal being reached is still intact, time is fast running out and you have to wonder how long it can go on before we see a wobble in the markets,” warned Craig Erlam, senior market analyst with OANDA Europe.
Elsewhere, bitcoin briefly soared to a new high, the digital unit soaring past its previous high of 19,783 in briefly hitting 19,800 as it sought to test the 20,000 resistance point.