Asian stocks dipped along with US and European futures Thursday after the chances of a stimulus deal in Washington before next month’s presidential election faded. The dollar and Treasuries ticked higher.
Shares in Hong Kong, Japan and South Korea saw the biggest losses, while Australian stocks climbed. US shares retreated Wednesday with Wells Fargo & Co. and Bank of America Corp. both falling after disappointing investors. Goldman Sachs Group Inc. outperformed after earnings beat expectations.
Australian bond yields and the local dollar dropped, and stocks pushed higher, after the Reserve Bank of Australia governor said the central bank is considering whether buying longer-dated bonds would spur hiring. The pound steadied as investors awaited more news on Brexit negotiations. Stocks in Thailand dipped after a state of emergency was declared in Bangkok to crack down on anti-government protesters.
Meantime, China’s central bank added medium-term funding to the financial system as it guides the economy through the pandemic.
In the US, Treasury Secretary Steven Mnuchin said getting a stimulus agreement before the election would be difficult, in remarks after another call with House Speaker Nancy Pelosi. While he hoped for bipartisan support for Senate Majority Leader Mitch McConnell’s latest idea — a vote on a narrow bill next week to help small businesses — Democratic leaders have no appetite for piecemeal measures now.
“This has been an ongoing drama,” said Paul Nolte, portfolio manager at Kingsview Investment Management. “The latest twist I heard is nothing is going to get done until the election. That’s why I think you’re getting the market selling off a little bit.”
Europe’s leaders intensified efforts to stem a resurgent coronavirus outbreak across the continent with France announcing stricter measures, Germany warning of economic risks and London set to tighten restrictions.
Here are some key events coming up:
- Morgan Stanley’s earnings are scheduled for Thursday.
- European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through October 18.
These are some of the main moves in markets:
- S&P 500 futures slid 0.5% as of 7:07 a.m. in London. The index dipped 0.7% on Wednesday.
- Japan’s Topix index fell 0.7%.
- Hong Kong’s Hang Seng slid 1.3%.
- Shanghai Composite was little changed.
- South Korea’s Kospi dropped 0.8%.
- Australia’s S&P/ASX 200 Index rose 0.5%.
- Euro Stoxx 50 futures were 0.9% lower.
- The Bloomberg Dollar Spot Index rose 0.1%.
- The euro was little changed at $1.1752.
- The yen fell 0.1% to 105.29 per dollar.
- The offshore yuan was little changed at 6.7148 per dollar.
- The Aussie fell 0.5% to 71.25 US cents.
- The yield on 10-year Treasuries ticked down to 0.71%.
- The Australian 10-year yield fell seven basis points to 0.77%.
- West Texas Intermediate crude edged down 0.3% to $40.89 a barrel.
- Gold was at $1,897.50 an ounce, down 0.2%.