Home Stock & Shares Global shares slip on virus, U.S. election concerns

Global shares slip on virus, U.S. election concerns

by Jonathan Adams
U.S. election

S&P500, Dow Jones and Nasdaq futures all fell between 0.5% and 0.6%

Global shares slipped on Wednesday as coronavirus infections grew at an alarming pace in the United States and Europe, while uncertainty over next week’s U.S. elections added to a “risk off” tone.

MSCI’s ex-Japan Asia index dipped 0.15% in early trade while Japan’s Nikkei fell 0.6%.

Futures for U.S. S&P500, Dow Jones and Nasdaq all fell 0.5%-0.6% in Asian trade on Wednesday, rattled by a media report that French government may bring in a national lockdown from midnight on Thursday.

The United States, Russia, France and other countries have registered record numbers of infections in recent days, and European governments have introduced new curbs to try to rein in the fast-growing outbreaks.

Data on Tuesday showed U.S. consumer confidence unexpectedly fell in October, although other economic figures were mostly positive, with orders for key capital goods hitting a six-year high.

The fall in U.S. stock futures came after a mixed session on Wall Street, where the S&P 500 lost 0.30% on virus worries while the tech-heavy Nasdaq Composite added 0.64%.

Microsoft kicked off a slate of reporting from tech heavyweights by beating Wall Street estimates for quarterly revenue, buoyed by its flagship cloud computing business amid increased work-from-home arrangements. But its shares slipped 1.7% after the bell.

Apple Inc, Amazon.com, and Google-parent Alphabet are among major tech players reporting later this week.

Investors appeared content to steer clear of risk with looming uncertainty, headlined by the Nov. 3 U.S. presidential election.

As former Vice President Joe Biden has enjoyed a consistent lead over President Donald Trump, investors have been cautiously betting on his victory and possibly a “blue wave” outcome, where Democrats take back the Senate as well.

Still the presidential race is closer in battleground states that could determine the outcome, leaving investors on edge.

It appears the gap between Biden and Trump is shrinking a bit lately. In particular, Biden’s lead in swing states doesn’t look that different from (Democratic candidate) Hilary Clinton’s in 2016, said Nobuhiko Kuramochi, market strategist at Mizuho Securities.

People still remember the 2016 experience and those who have bet on a blue wave are probably taking some profits now ahead of the event, he added.

Wall Street’s volatility index, a measure of market expectations in share price swings, rose to 33.35, its highest in almost two months.

Some market players see that as a sign more investors are wary of the possibility that the election outcome can be contested, possibly leaving markets in limbo for weeks.

That would likely further delay any negotiation on economic relief package U.S. policymakers have been struggling to agree on. Trump acknowledged an economic relief package would likely come after the Nov. 3 election.

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