European stocks and U.S. equity futures fall as Biden’s stimulus plan fails to cheer COVID-19 worried investors

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European stocks and U.S. equity futures fall as Biden’s stimulus plan fails to cheer COVID-19 worried investors


European stocks fell on Friday, alongside U.S. stock futures, as the announcement of a highly anticipated stimulus plan from President-elect Joe Biden failed to cheer investors, who remain concerned over climbing COVID-19 cases on both sides of the Atlantic.

The Stoxx Europe 600 index
SXXP,
-0.37%

fell 0.4% in a week that has seen it drop around 0.2%. The German DAX
DAX,
-0.37%

fell 0.4%, the French CAC
PX1,
-0.55%

dropped 0.7% and the FTSE 100
UKX,
-0.40%

traded 0.6% lower as well. The euro
EURUSD,
-0.16%

and pound
GBPUSD,
-0.31%

were both weaker against the dollar.

U.S. stocks fell in the last hour of trading on Thursday ahead of a $1.9 trillion coronavirus relief plan announced by Biden. The plan includes increasing direct cash payments to Americans to $2,000 and money for distributing COVID-19 vaccines. U.S. stock futures
ES00,
-0.28%

NQ00,
-0.09%

fell, with Dow futures
YM00,
-0.28%

off over 100 points.

“The President-elect also made clear that he would be laying a second, broader economic recovery plan in February at a joint session of Congress. That plan will lay out infrastructure spending and plans to attack climate change. It seems it will also lay out tax raising plans which is catching the market off guard a little this morning,” said a team of strategists at Deutsche Bank led by Jim Reid.

Investors are grappling with a third wave of COVID-19 cases, and concerns as even China finds itself dealing with a resurgence in cases and hospitalizations. The U.S. now has a quarter of the global tally of new cases, or 23 million infections.

In Europe, France will impose a nationwide 6 p.m. curfew on Saturday, with initial plans for 15 days to battle climbing cases. Spain reported 38,869 new coronavirus infections on Wednesday, the highest on record and three times the worst level seen in the first wave with hospitalizations rising.

“There is renewed enthusiasm about the U.S. due to the prospects for more stimulus and the new administration’s pledge to focus on the vaccinations’ rollout. Meanwhile, Europe recovery is throttled by additional lockdowns and a fumbled vaccine rollout program,” said Stephen Innes, chief global markets strategist at Axi, in a note to clients.

The U.K.’s Office for National Statistics reported that the country’s economy shrank 2.6% in November, after six straight months of growth since lockdowns in the spring. But that was less than the 4% drop forecast by economists polled by The Wall Street Journal.

Among stocks on the move, shares of technology names were lower

Earning season is slowly revving up in the U.S. and Europe, with JPMorgan
JPM,
+0.58%

among the big banks to report Friday.        

Read: Expect another quarter of big earnings beats, as Wall Street estimates were likely overly depressed

Shares of SAP
SAP,
-1.53%

SAP,
+1.46%

climbed over 2%, after the German software giant pre-announced fourth-quarter results, reporting a sequential improvement “even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions.”

Carrefour’s
CA,
-4.09%

shares were again on the decline, dropping 3% after the French government voiced objections to prospects of a takeover for the supermarket owner when it and Canada’s Alimentation Couche-Tard 
ATD.A,
-0.83%

announced early-stage talks earlier in the week.



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