In this Friday, Oct. 2, 2020 file photo, pedestrians pass the New York Stock Exchange, in New York. Stocks are pulling slightly higher in the early going on Wall Street, Wednesday, Oct. 14, as investors pore over another batch of earnings reports from big U.S. companies. The S&P 500 added 0.3% in early trading Wednesday. A loss in the index a day earlier broke a four-day winning streak. (AP Photo/John Minchillo, File)
BEIJING (AP) — Global stock markets and U.S. futures declined Thursday as hopes U.S. leaders will agree on new economic aid before the Nov. 3 presidential election faded.
London and Frankfurt opened lower. Shanghai, Tokyo and Hong Kong also declined.
Wall Street's benchmark S&P 500 index dropped 0.7% on Wednesday after Treasury Secretary Steven Mnuchin said he and congressional leaders were “far apart” on new aid for the struggling U.S. economy. Consumer spending, the main U.S. economic engine, weakened after earlier additional unemployment benefits expired.
Mnuchin “added another nail to the coffin on pre-election stimulus,” said Jingyi Pan of IG in a report.
In early trading, the FTSE 100 in London fell 2% to 5,817.13 and Frankfurt's DAX lost 2.7% to 12,674.63. The CAC 40 in France retreated 1.6% to 4,861.66.
Thursday brings a European Union summit that British Prime Minister Boris Johnson had set as a deadline to get aa trade agreement after the United Kingdom left the bloc. As of Wednesday, talks remained in a deep rut over fundamental differences on the issues of state aid and fisheries.
On Wall Street, futures for the S&P 500 index and the Dow Jones Industrial Average were off 0.5%. On Wednesday, the Dow lost 0.6% and the Nasdaq composite slid 0.8%.
In Asian trading Thursday, the Shanghai Composite Index lost 0.3% to 3,332.18 and the Nikkei 225 in Tokyo sank 0.7% to 12,827.82. The Hang Seng in Hong Kong lost 2.1% to 24,154.15.
The Kospi in Seoul shed 0.8% to 2,361.21 despite a strong market debut by the company that manages popular South Korean boy band BTS. The group faces criticism by Chinese internet users after its leader thanked Korean War veterans for their sacrifices.
Big Hit Entertainment Ltd.’s share price doubled by mid-day but ended the day close to its opening. It's market value after an initial public offering that raised more than $800 million was about $7.5 billion.
In Sydney, the S&P-ASX 200 gained 0.5% to 6,210.30 while India's Sensex lost 1.2% to 40,293.61. New Zealand and Southeast Asian markets declined.
Thailand's benchmark lost 1.5% after the government declared a “severe state of emergency" following a rally Wednesday by protesters demanding democratic change.
Early Thursday, Thai police dispersed pro-democracy protesters who camped out overnight outside the prime minister's office to demand his resignation. Police said 20 people were arrested.
In Washington, Mnuchin and Nancy Pelosi, the speaker of the House of Representatives, talked by phone Wednesday but reached no agreement, according to Pelosi aide Drew Hammill. Mnuchin said it would be difficult to complete a deal before the election.
Major U.S. companies have begun reporting quarterly earnings this week.
Investors are swinging between optimism about a possible coronavirus vaccine that helped to propel an earlier market rally and unease about lackluster U.S. economic activity.
The Federal Reserve has indicated it will keep interest rates at nearly zero for a while to support the economy, even if inflation hits its target level.
In energy markets, benchmark U.S. crude lost 32 cents to $40.72 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, declined 31 cents to $43.01 per barrel in London.
The dollar gained to 105.20 yen from Wednesday's 105.15 yen. The euro declined to $1.1726 from $1.1753.
7 Stocks That Could Provide a Year-End Rally
It’s rough in the markets right now. Underlying the volatility is uncertainty. The VIX Index (INDEXCBOE: VIX) otherwise known as the Fear Index is unofficial, but an eerily accurate predictor of market sentiment. And the VIX is up 30% in the last month.
Is this uncertainty due to concerns over additional lockdown measures? Is it about the lack of additional coronavirus stimulus? Is the market reacting to a surge in jobless claims? Or is this just the somewhat normal volatility that comes in an election year that promises to be like none in American history.
The answer is all of the above and then some. But does that mean you should stay out of equities? I don’t think so. Where are you going to go? The Fed has promised interest rates are going nowhere fast. And that bit of news is weighing down the bond market.
So stocks it is. But although growth-seeking investors may be tempted to look at the tech sector to see what’s on sale today, I suggest taking a more targeted approach. Rather than looking at a single sector, try to look at solid performers in different sectors that may be ready to surge over the last three months.
The pandemic brought the entire market down. But once investors took a breath they found bargains. And if you had the courage to put your money to work in those stocks, you’ve been rewarded.
Times like these call for the same type of courage. And that’s why we’ve put together this special presentation with seven stocks that look ready to surprise investors with nice end-of-year gains.
View the "7 Stocks That Could Provide a Year-End Rally".