Global stock rally ebbs as bonds, dollar advance: markets wrap

The global stock rally eased on Thursday and Treasuries rose as investors assessed signals of overheated equity markets amid a deteriorating coronavirus situation in many large economies.

European stocks opened lower as several earnings reports disappointed. Siemens AG slumped after forecasting a slight increase in 2021 profit while warning that some pandemic-related challenges will remain. UK financial services provider Legal & General Group Plc sank after saying it may keep its final 2020 dividend flat. One bright spot was Burberry Group Plc, which rose as much as 5.8% after sales dropped less than expected.

Most markets in Asia dipped, though Chinese technology shares rallied following their $290 billion wipeout over plans for tougher regulations. Futures for the S&P 500 Index and Nasdaq 100 slipped.

Investors will look for fresh market catalysts later on Thursday in an online forum featuring speeches by European Central Bank President Christine Lagarde, the Bank of England Governor Andrew Bailey and Jerome Powell of the Federal Reserve.

Fears that an intensifying pandemic will curb the global economic rebound threaten this month’s almost 10% surge in global equities. While investors keep an eye on vaccine news and economic data, they’re also concerned about new restrictions emerging from Hong Kong to New York.

“In the near term, the resurgence of the virus is beginning to make new worries,” Torsten Slok, chief economist at Apollo Global Management Inc., said on Bloomberg TV. “It looks like this will end up being a W-shaped recovery.”

Global deaths jumped by more than 12,000, while US new daily cases set a record, with the early epicenter of New York ordering measures to tamp down a fresh wave. New York City ordered bars and restaurants with liquor licenses to close at 10 p.m. as officials struggle to prevent a second wave.

On the vaccine front, Moderna Inc. said its trial has reached a key target for analysing the shot’s effectiveness.

These are some key events coming up:

• European Central Bank President Christine Lagarde, Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell are among the speakers Thursday at an online ECB Forum entitled “Central Banks in a Shifting World.”
• US CPI data for October is due on Thursday.
• Finance ministers and central bankers from the Group of 20 hold an extraordinary meeting Friday to discuss bolder action to help poor nations struggling to repay their debts.

These are some of the main moves in markets:

Stocks

• The Stoxx Europe 600 Index sank 0.7% as of 8:24 a.m. London time.
• Nasdaq 100 Index futures decreased 0.4%.
• Futures on the S&P 500 Index sank 0.6%.
• The MSCI Asia Pacific Index was little changed.

Currencies

• The Bloomberg Dollar Spot Index climbed 0.1%.
• The British pound dipped 0.3% to $1.3181.
• The Japanese yen strengthened 0.1% to 105.30 per dollar.
• The Indian rupee weakened 0.4% to 74.67 per dollar.

Bonds

• Germany’s 10-year yield decreased one basis point to -0.52%.
• Britain’s 10-year yield declined two basis points to 0.394%.
• France’s 10-year yield fell one basis point to -0.276%.
• Japan’s 10-year yield fell one basis point to 0.03%.

Commodities

• West Texas Intermediate crude gained 0.4% to $41.61 a barrel.
• Gold was little changed at $1,865.17 an ounce.
• Soybeans decreased 0.3% to $11.49 a bushel.
• Iron ore declined 1.2% to $119.68 per metric ton.