On Wednesday, European stocks fell. Investors’ concerns over the COVID-19 pandemic’s spread in the region and stimulus progress in the United States overshadowed earning news. Also, Wall Street equity futures are slipping into the red.
After a 0.4% drop on Tuesday, the Stoxx Europe 600 index dropped nearly one percent, headed for a third straight losing session. Also, the German DAX decreased by one percent. Meanwhile, oil prices went down over one percent, the FTSE 100 fell 1.2$, and the French CAC 40 was down just over one percent.
Investors watched the progress on a new round of fiscal stimulus to combat economic fallout from the COVID-19. Thus, on Tuesday, Wall Street equities closed, but off session highs.
House Speaker Nancy Pelosi and White House representatives said that enough progress was made on Tuesday to justify further talks on Wednesday. They aim to get a package vote on before the November 3 election.
Nevertheless, a more significant risk to deal with might come from Senate Republicans. Also, the Washington Post reported that Senate Majority Leader Mitch McConnell talked with his fellow Republicans at a Tuesday party lunch. He told them that he had advised the White House against a pre-election deal.
Jeffrey Halley works at Oanda. He is a senior market analyst there. He said in a note to clients that if Republican Senate leader Mitch McConnel refuses to introduce a bill, then the stimulus will be dead in the water until post the United States election.
Moreover, there are over two months away and a lifetime in the grander scheme of 2020. Financial markets are blithely ignoring that apparent and genuine risk.
There are rising COVID-19 cases on both sides of the Atlantic. Thus, it continued to weigh on investors. Reportedly, in Spain, officials are considering a nationwide curfew. It might echo efforts seen in other countries that battle autumn infection waves.
Christine Lagarde is the European Central Bank President. She expressed fresh concerns over a second wave.
In prerecorded comments released on Tuesday, Lagarde said that he thinks that the various scientific bodies and most scientists forecasted the COVID-19 to take off again in November and December. It was because of the cold weather factors that have nothing to do with the virus.
Nevertheless, Lagarde continued, it has come earlier, and it was a surprise.