US equities cut losses on stimulus hopes; oil drops

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U.S. stocks trimmed losses as investors weighed the implications of President Donald Trump’s positive coronavirus test with renewed efforts in Washington to strike a compromise on fiscal stimulus.After falling 1.2%, the S&P 500 Index cut its drop by almost half following comments from House Speaker Nancy Pelosi that she would work to find a compromise with Republicans on a law Project. A disappointing jobs report that showed fewer hires than analysts had estimated underscored the urgency of pushing through an aid measure to help American workers.

Crude oil fell for a second day. The yen, often viewed as a safe haven in times of market stress, edged up amid heightened uncertainty ahead of the November 3 presidential election.

Traders were already bracing for unrest ahead of the poll and in the months following, and the CBOE volatility index, known as the Wall Street fear gauge, jumped the most in a month at one point. Friday before reducing the increase.

“Whether it’s the president’s health or the payroll report, this pandemic is still very much present,” said Anastasia Amoroso, head of multi-asset thematic strategy at JPMorgan Private Bank, in an interview on Bloomberg Television. “It really raises the specter of the importance of implementing fiscal stimulus and making sure people have access to improved unemployment benefits.

Trump’s diagnosis adds to grim developments around the virus as major cities turn into hotspots again. New York has reported the most new cases since May, while London is reportedly at a “tipping point” with infections continuing to rise. Thousands of job cuts this week have shown how businesses still grapple with the readjustments necessary to survive.

In Europe, the pound won in the news British Prime Minister Boris Johnson will intervene in the Brexit negotiations for the first time since June when he meets with his European counterpart on Saturday.

Investors will also be following news on Trump’s health and the spread of the coronavirus this weekend.

“As long as the government is functioning normally, the markets will be affected, but not necessarily panic,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “However, this incident shows how COVID-19 continues to be a threat to the economy and the markets.”

Here are the main movements in the markets:

Stocks

The S&P 500 Index fell 0.7% at 10:27 a.m. New York time.
The Stoxx Europe 600 index fell 0.2%.
The MSCI Asia Pacific Index fell 0.4 percent.
The MSCI Emerging Markets Index fell 0.1 percent.

Devises

The Bloomberg Dollar Spot Index rose 0.1 percent.
The euro fell 0.3 percent to US $ 1.1716.
The British pound rose 0.2% to US $ 1.2921.
The Japanese yen strengthened 0.2 percent to 105.35 per dollar.

Obligations

The yield on 10-year treasury bills increased two basis points to 0.69%.
Germany’s 10-year yield was little changed at -0.54 percent.
Britain’s 10-year yield rose two basis points to 0.25 percent.

Basic products

West Texas Intermediate crude sank 3.2 percent to US $ 37.50 a barrel.
Gold fell 0.2 percent to US $ 1,902.12 an ounce.



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