European stocks fell to three month low on Thursday as worries over the economic recovery and increasing virus infections dented investor’s sentiments. The Fed’s warnings over the slow economic recovery have added to bearish sentiments.
Declining sentiments for the new stimulus package has also negatively impacted market confidence.
The fresh social distancing restrictions across Europe is among the biggest cause of concern for investors as France and the United Kingdom has introduced new restrictions. The daily coronavirus infections in the U.K. grew by almost 25% on Wednesday.
Companies related to travel and leisure sectors fell sharply in the past couple of sessions on reports of increasing virus infections. The energy sector also suffered losses on prospects for slower demand.
On Wall Street, US stock market indices remained volatile throughout the day. The U.S. unemployment claims also came higher compared to analysts’ expectations. US unemployment claims jumped to 870,000 in the last week, up from an economist’s estimate of 850,000.
Goldman Sachs Economists have slashed their economic outlook for the United States. The firm now sees fourth-quarter GDP growth in the range of 3%, down by half compared to the previous forecast of a 6% increase.
“We think it is now clear that Congress will not attach additional fiscal stimulus to the continuing resolution. This implies that after a final round of extra unemployment benefits that are currently being disbursed, any further financial support will likely have to wait until 2021,” the economists said.
The US and European stocks future are in the green on Friday. Gold and risker assets saw losses on Thursday while the US dollar remained strong.
The USD index, which tracks the greenback against the six major currencies, continues trading around 94.50 level. Euro and British Pound are struggling against the US dollar. Gold fell below $1900 an ounce level due to the stronger dollar.