Global stocks slide as progress on stimulus stalls, with just two weeks to go to the US election

REUTERS/Brendan McDermid
  • Global stocks slid on Thursday after the US Senate’s stimulus smack-down dimmed the prospects of another relief package ahead of the November election.
  • House Speaker Nancy Pelosi acknowledged that negotiations may not come together until after the election, although she has said: “I’m pretty happy. I think we have a prospect for an agreement.”
  • US futures edged lower after a top US official said Russia and Iran took “specific actions to influence public opinion” relating to the presidential election.
  • European stocks fell as the region faced new records of coronavirus infections and continued government restrictions on movement.
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Global stocks dropped on Thursday, driven lower by another blow to expectations that US lawmakers may agree on a stimulus framework before the November election.

Futures on the Dow Jones, S&P 500, and Nasdaq 100 dropped 0.3%. The dollar index edged higher by 0.1%, to $US92, but was still around its lowest in almost two months.

Senate Democrats quashed a $US500 billion coronavirus relief bill put forth by Republicans on Wednesday, on the basis of its inadequacy to address the public health crisis that has killed over 200,000 Americans. A similar slimmed-down GOP plan was dismissed by Democrats in September.

House Speaker Nancy Pelosi has acknowledged the plan may not come together ahead of the election since the Senate remains the biggest barrier to the talks.

“I’m pretty happy. I think we have a prospect for an agreement,”Pelosi said in an MSNBC interview, adding that it was “up to the president to convince people in his party.”

“Other senior Republicans felt that any deal should be agreed to and passed now, as it may be hard to know how the political mood will be after the election,” Deutsche Bank analysts said in a note. “With less than two weeks to the election, time is running short for both sides.”


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S&P 500 futures edged lower overnight after a top US official said Russia and Iran have “taken specific actions to influence public opinion” relating to the presidential election.

The official, Director of National Intelligence John Ratcliffe, added that Russia has also “obtained some voter information just as they did in 2016.”

This had spillover effects for markets in Asia where China’s Shanghai Composite fell 0.4% and Japan’s Nikkei dropped 0.7%.

Elsewhere in Europe, shares fell for a fourth day after new records of coronavirus cases were set across the region and governments continued to re-impose movement restrictions on citizens. The Euro Stoxx 50 index of the top eurozone blue-chip stocks fell 0.6%, while London’s FTSE 100 lost 0.3%, and Frankfurt’s DAX fell 0.7%.

Economically-sensitive commodities like copper and nickel also dropped about 0.4%, suggesting deteriorating expectations for the global industrial economy. Oil edged higher after falling 3% on Thursday. Global benchmark Brent crude rose 0.6% ,to $US42 a barrel, and US benchmark West Texas Intermediate rose 0.7%, to $US43.

Gold dropped 0.5% to $US1,920, while the US dollar has stopped depreciating for now. “The fact that demand for gold is lower today may be because the EU and the UK are continuing their Brexit talks,” said Daniel Briesemann, a commodities analyst at Commerzbank. “Their goal now is to reach an agreement by mid-November.”

Bitcoin extended this week’s rally, climbing 4% to $US12,766. The price hit a 15-month high the previous day after PayPal said it would soon allow users to buy, sell, and hold Bitcoin.


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