Stocks in Europe tumbled down along with U.S. equity futures. Investors contemplated the prospect of another stimulus against a slew of earnings and the continued rise of the coronavirus cases. The dollar gained. But futures on the S&P 500 Index declined by 0.6%.
The Stoxx Europe 600 Index also plummeted down by 0.6%, while Germany’s DAX Index dropped by 1.3%. The MSCI Asia Pacific Index lowered slightly by 0.1%.
Car-makers and banks dragged the Stoxx Europe 600 Index lower at the open. After an advance on Wednesday, contracts on the three main American equity gauges pointed to modest losses on Wall Street. The Federal Reserve promised to use all of its tools to support the economic recovery.
Anheuser-Busch InBev NV soared on results that showed a return to growth following the reopening of bars in several markets. Total SE also increased after posting better-than-expected results thanks to trading gains that offset a drop in oil prices. However, Amazon.com Inc., Apple Inc., and Alphabet Inc. are due to report earnings later.
Coronavirus cases continue to surge forward. As a result, governments have to double down on the $11 trillion of stimulus along with the unprecedented central bank support unleashed since the crisis began. The Federal Reserve has kept rates pinned near zero since the outbreak’s onset in March. It also rolled out several emergency lending programs geared toward fostering liquid trading conditions in markets.
What do analysts say?
Margaret Yang, the strategist at DailyFX, stated that the Fed committed to doing whatever it can to support the economy as well as keep the liquidity environment very accommodative. According to her, the results on Thursday from large tech companies will be critical to market sentiment. So, if those firms miss their earnings target, then the market sentiment could get dampened.
Meanwhile, oil tumbled down below $41 a barrel. Data showed the biggest decline in U.S. crude inventories this year, causing its downfall. On the other hand, the dollar rallied due to investors seeking safety against a coronavirus resurgence worldwide.