European Stocks are Mostly Lower, US Stocks Extends Losses
European stocks reported losses in Thursday trading amid setbacks in politics, earnings, and the pandemic. Although the selling pressure is not strong, the major market indices are trading in negative territory for the second consecutive day.
European stock markets are among the biggest losers of the pandemic as several important countries like France, Italy, Spain, and the United Kingdom have enforced new social distancing policies to avoid the second virus wave.
The reports of suspension of coronavirus studies from companies like Johnson & Johnson and Eli Lilly have raised investors’ concerns about the vaccine launch by the end of this year.
Wall Street Selloff Supports European Stocks Slide
European stocks have been following Wall Street over the past few months. US stocks fell sharply on Wednesday and extended the downtrend in Thursday trading due to fading optimism over the stimulus program. Earnings performance from big banks contributed to the selloff.
Wells Fargo and Bank of America are among the worst performers in the S&P index. The shares of Wells Fargo plunged almost 6% after missing earnings targets. Low-interest rates are making it difficult for the bank to generate profits. Its net interest income dropped 19% year over year to $9.4 billion.
“Our third-quarter results reflect the impact of the aggressive monetary and fiscal stimulus on the U.S. economy,” CEO Charlie Scharf says in the earnings statement.
Safe Haven Assets Rebound on Stocks Selloff
The USD index, which tracks the US dollar against the basket of six currencies, trades around 93.40. Gold price, on the other hand, slid to the $1900 level due to concerns over the virus and stimulus.
The risker currencies including the euro remained under pressure against the US dollar. The common currency fell amid social distancing restrictions and increasing virus infections. Questions over the Brexit trade deal are also looming on investor’s sentiments.