Markets are in a good spot to continue pushing higher: Som Seif
U.S. stocks fell to the lowest in almost two weeks as Congress remained apart on a fresh government spending deal, denting hopes for a breakthrough before the election. Treasuries slipped with the dollar.
The S&P 500 Index fell more than 1.5 per cent as opposition to a sizable aid package hardened in the Republican-controlled Senate and House Speaker told her caucus negotiators are still trying to reach a deal. Data showed key parts of the American economy are slowing two weeks ahead of the vote, while Federal Reserve officials warn the growth will slow without additional federal spending.
Futures had advanced overnight on signs of progress toward a deal and the latest data from China showing its economy continues to rebound. The 10-year Treasury yield rose above 0.76 per cent and the dollar weakened versus major peers.
“As the hope for stimulus before the election fades, the market kind of fades with it,” said Christopher Grisanti, chief equity strategist at MAI Capital Management. “The market was pricing in some kind of stimulus and without it there’s disappointment.”
In Europe, stock slumped while the pound jumped by the most since August as British officials signalled they were ready to water down controversial lawbreaking Brexit legislation, a move which could reopen talks with the European Union over future trading relationships.
Elsewhere, oil droped before an OPEC+ meeting to assess the state of the market as demand comes under pressure from the threat of new virus restrictions.
Here are some key events this week:
- Brexit trade talks are likely to continue at least into next week if the U.K. and EU fail to reach an agreement.
- Australia central bank minutes are out Tuesday.
- The final presidential debate before the U.S. election, between President Donald Trump and former Vice President Joe Biden, will be live from Nashville, Tennessee on Thursday.
These are some of the main moves in markets:
- The S&P 500 Index slipped 1.6 per cent at 4 p.m. in New York.
- The Nasdaq 100 lost 1.8 per cent while the Dow Jones Industrial Average fell 1.4 per cent.
- The Stoxx Europe 600 Index lost 0.3 per cent.
- The MSCI Asia Pacific Index rose 0.8 per cent.
- The MSCI Emerging Market Index rose 0.5 per cent.
- The Bloomberg Dollar Spot Index decreased 0.1 per cent.
- The euro climbed 0.4 per cent to US$1.1769.
- The British pound increased 0.2 per cent to US$1.2942.
- The onshore yuan strengthened 0.2 per cent to 6.685 per dollar.
- The Japanese yen was flat at 105.42 per dollar.
- The yield on 10-year Treasuries climbed one basis point to 0.76 per cent.
- The yield on two-year Treasuries climbed one basis point to 0.145 per cent.
- Germany’s 10-year yield gained one basis point to -0.61 per cent.
- Japan’s 10-year yield jumped less than one basis point to 0.026 per cent.
- Britain’s 10-year yield climbed two basis points to 0.201 per cent.
- West Texas Intermediate crude fell 0.7 per cent to US$40.59 a barrel.
- Brent crude dropped 1.1 per cent to US$42.43 a barrel.
- Gold futures slipped 0.1 per cent to US$1,904.20 an ounce.
--With from Claire Ballentine and Andreea Papuc.