Introduction: Stocks fall as vaccine excitement wanes
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Excitement over a Covid-19 vaccine is fading fast, with investors betting that things are likely is likely to get worse before they get better.
Following an eight-day rally, stocks started to pull back on Thursday and are set to suffer another drop during’s Friday session, following another surge in coronavirus cases.
On Thursday, the UK recorded 33,470 further coronavirus cases – a new daily record – which was 10,000 more than a day earlier. Across the pond, New York is considering the possible school closures, and Chicago has issued a stay-at-home notice for 30 days.
Michael Hewson, chief market analyst at CMC Markets UK, says:
With the worst of the cold weather yet to arrive and the pace of new infections only expected to increase as we head towards year end, it is slowly becoming apparent that the arrival of a vaccine can’t come soon enough.
It is also quite apparent that even if one was to arrive in the near future it wouldn’t be able to change the situation on the ground as it is now, which means things are only likely to get worse before they get better.
That pessimism dragged down stocks on Wall Street, where the Dow and S&P 500 both fell by around 1%, while the Nasdaq closed 0.6% lower.
Asian stocks are also in the red, with the Shanghai Composite down 0.8%, the Hang Seng down 0.4% and Japan’s Nikkei down 0.5%.
Europe is expected to follow suit:
We’re light on the data front today, but we are expecting the second reading for third quarter Eurozone GDP, which is expected to be confirmed at 12.7%.
- 10.00am BST: Eurozone Q3 GDP (second estimate)
- 1.30pm BST: US producer price index (PPI) for October