REUTERS / Brendan McDermid
Global stocks fell on Tuesday, as the World Health Organization said the number of new COVID-19 infections increased last week for the first time in seven weeks.
WHO Director-General Tedros Adhanom Ghebreyesus called the leap in cases “disappointing but not surprising” and warned that it may be too early to count on vaccines and to abandon other measures to combat the virus.
Futures on the Dow Jones, S&P 500 and Nasdaq fell between 0.2% and 0.4%, suggesting that US markets would open lower during regular trading.
The fall in stocks followed an increase in global stocks on both sides of the Atlantic, despite the fact that investors continued to price two Fed interest hikes until the end of 2023, said Deutsche Bank research strategist Jim Reid .
Treasury Secretary Janet Yellen on Saturday pushed for a quick vote on President Joe Biden’s $ 1.9 trillion stimulus project, saying it “ensures that people get to the other side of this pandemic and are served by a strong and growing economy”.
In Europe, some countries have imposed new restrictions, with Finland declaring a state of emergency due to the increase in COVID-19 infections and new measures being put in place in certain parts of Italy. President Emmanuel Macron said France needs another four to six weeks before restrictions begin to be lifted. On a more positive note, the 7-day average number of cases in the UK fell below 8,000 for the first time since the beginning of October.
London’s FTSE 100 was up 0.3%, while Euro Stoxx 50 and Germany’s DAX were practically stable.
Markets in Asia were affected by comments by the chairman of the China Banking and Insurance Regulatory Commission, Guo Shuqing. Guo said he is “very concerned” about the risks that emerge from bubbles in global financial markets and in his own country’s real estate sector, raising concerns about the further tightening in the world’s second largest economy.
“Guo really isn’t saying anything that investors, in their hearts, should no longer – or shouldn’t – know,” said Connor Campbell, financial analyst at SpreadEx. “However, it was enough to halt the kind of bombastic growth that started the month.”
China’s Shanghai Composite fell 1.2%, Japan’s Nikkei fell 0.8% and Hong Kong’s Hang Seng fell 1.6%.
Oil prices have declined. The main concern weighing on the market is the OPEC + meeting on Thursday, at which traders hope the coalition will agree to increase production, reversing some tax cuts last year. Brent crude fell 1.1%, to $ 62.95 a barrel, and West Texas Intermediate fell 1%, to $ 60.00 a barrel. Both benchmarks recovered all of their price losses in 2020.