Fears about the escalating COVID-19 caseload across the US and Europe battered markets on Thursday, aided by another weak monthly reading on inflation and another week of 700,000 plus new jobs claims.
The S&P 500, Dow, and the Nasdaq all fell on Thursday as US coronavirus infections surged and investors wondered if effective vaccines would arrive in time to help control the infections and help the economy remain out of recession in 2021.
The Dow fell 1%, to 29,076.59, the S&P 500 1.0% as well, and the Nasdaq was down 0.6%. All three markers closed off their day’s lows around 20 minutes before the final bell.
The loss of confidence on Wall Street infected the ASX 200 market overnight Thursday and it was down 37 points at 8am.
The ASX 200 had closed down 31 points on Thursday as local investors pondered the strength of the vaccine confidence and rotation back to value stocks. Wall Street’s slide, the fall in bond yields, and the big change in momentum will make for a tough day’s trading in Australia on Friday.
The loss of confidence on Wall Street (and European and most Asian markets as well) saw a big fall in bond yields over the day with the yield on 10 year Treasuries falling to just over 0.88% from Wednesday’s end of a touch under 0.98%.
The Stoxx 600 European share index lost nearly 0.9% after most markets across Asia tumbled on Thursday.
Bond yields had risen with the confidence caused by the news about the Pfizer vaccine but Thursday saw that confidence overwhelmed by the continuing surge in COVID-19 cases across the country and more lockdowns by states and cities.
The US dollar was a touch stronger – the Aussie remained above 72 US cents for another day, trading around 77.35 just after 7am.
The rotation out of mega techs and other techs halted, but investors didn’t return to those giants and the Nasdaq fell.
New York became the latest state to introduce social distancing restrictions on Wednesday, as did half a dozen other states.
US new infections in the country surged above 145,000 (The 9th day in a row of 100,000 or more cases). On Thursday, more than 145,000 cases were reported. Over 65,000 people are in hospitals
The UK recorded its largest-ever caseload in a day – more than 33,000 a record. The UK is the first European nation to have recorded more than 50,000 cases a day. France and Germany tho are seeing a slowing, but lockdowns remain in place.
The Dow dropped 0.5% as industrial and financial companies sensitive to economic growth fell, with Boeing Co and Goldman Sachs down about 2% each.
Airlines and cruise operators, among the hardest hit by the outbreak, also fell.
Gold rose 0.6% to $US1,873 an ounce, silver edged up 0.4% to $US24.306 and Copper also edged higher to $US3.1450 a pound.
Iron ore prices dipped – the price of 62% Fe fines delivered to northern China eased 82 cents to $US123.74.
And oil prices ended a three-day rally on the renewed pandemic fears. US West Texas Intermediate crude settled down 0.8% at $US41.12 and Brent crude in Europe settled down almost 1% at $US43.38.
