Wall Street gave up Tuesday gains and ended lower after a wobbling session on Wednesday. The markets were under pressure as investors continued to watch the tough negotiations between Republicans and Democrats to deploy another package of coronavirus relief.
White House Chief of Staff Mark Meadows stated that President Donald Trump was willing to work on an agreement even though there are major differences between the White House and Democrats in Congress.
US House Speaker Nancy Pelosi noted that the differences were narrowing, but she admitted that the bill might not pass before the election.
The pressure on equity investors is also increasing as the election gets closer. Trump and Democrat candidate Joe Biden will have their last debate later today. Some polls suggest the gap between the two has narrowed even as Biden is leading. The situation might become chaotic as Trump previously said that he wouldn’t transfer power peacefully in the case he loses, citing fraudulent voting.
The S&P 500 fell 0.22%, the Dow lost 0.35%, and Nasdaq dropped by 0.28%. Nine of the S&P’s 11 major sectors closed lower, with energy being the worst performer.
Snapchat shares surged by about 30% after it reported on Tuesday revenue and user growth figures that beat analysts’ expectations by a margin. The news encouraged other social media companies. Thus, Twitter surged 8%, Facebook rose 4%, and Pinterest added almost 9%.
Tesla reported Q3 earnings and revenue figures that beat analysts’ forecasts. The company’s EPS of $0.76 on revenue of $8.77 billion was higher than the expected EPS of $0.55 on revenue of $8.26 billion. The share price rose 4%. Year-to-date, Tesla has increased its valuation by about 400%, though it’s still down 16% from the record high set on September 1.
Asian stocks are bearish in early trading on Thursday, following the choppy US session.
At the time of writing, China’s Shanghai Composite is down 0.62%, and the Shenzhen Component has fallen by 0.49%, though it has departed from session lows. The Sino-US tensions are worsening after US Secretary of State Michael Pompeo designated six more Chinese publications as “foreign missions”, or media outlets controlled by Beijing. The latest additions include Economic Daily and the Jiefang Daily, the official publication of the Shanghai Communist Party Committee.
Hong Kong’s Hang Seng Index is up 0.04% after initial losses. The city’s Cathay Pacific Airways is cutting 8,500 jobs while sister airline Cathay Dragon is ceasing operations.
Japan’s Nikkei 225 is down 0.67%, and South Korea’s KOSPI has lost 0.78%.
In Australia, the ASX 200 closed 0.29% lower.
European markets are set to open lower amid the stimulus debate in the US and an increasing number of COVID infections, which has forced several European countries to reimpose lockdown measures.
In the commodity market, oil prices continued the bearish trend after the Energy Information Administration (EIA) reported a 1.001 million barrel draw last week, which is smaller than analysts’ expectations of a 1.021 million-barrel draw. The EIA also said that gasoline inventories surprisingly rose 1.895 million barrels last week, while analysts expected a 1.829 million-barrel draw. Crude prices continue to be under pressure amid weakening demand caused by the second wave of the pandemic.
Gold is retreating after a bullish session on Wednesday. The metal is now down 0.57% to $1,918. The safe-haven is waiting for the next move in US stimulus negotiations.
In FX, the US dollar has recovered some of the earlier losses amid stimulus uncertainty. However, it is set to end the week lower. The USD Index is up 0.10% to 92.692, and EUR/USD is down 0.05% to 1.1854.
The British pound is trading sideways against the greenback in early trading on Thursday, after surging over 1.50% against both majors. The sterling rose after the UK and the EU resumed trade talks to potentially ink a deal that would enable a smooth withdrawal from the European market.
