Daily summary: Global stocks turn lower as COVID-19 worries return

European indices finished today’s session in red amid growing concerns  regarding second wave of COVID-19 infections and the need for further lockdowns and shutdown of economic activity. Also Bank of England left the key bank rate unchanged at 0.1% and expanded its bond-buying program by £100 billion but slowed the pace of purchases. The total £745 billion should be completed by the end of the year and the bank did not signal an extension into 2021. Policymakers added that the fall in global and UK GDP in Q2 will be less severe than anticipated although the outlook remains unusually uncertain and the economy, and especially the labor market, will therefore take some time to recover. Investors were also disappointed after the bank failed to give clues on more strategies to shore up the economy hit by the coronavirus. DAX dropped 0.7%, CAC 40 lost 0.8%, FTSE 100 fell 0.6%, IBEX35 plunged 2.6%,  FTSE MIB declined 0.4%

 

US indices are trading lower as well dragged down by another week of poor US jobless claims data and continued fears of a new coronavirus outbreak. 10 U.S. states including Texas, Florida and Oklahoma reported a surge in new infections. However, President Donald Trump announced yesterday that the United States would not close businesses again. Recent US Initial Jobless Claims  report showed  claims for state unemployment benefits totaled a seasonally adjusted 1.508 million the eleventh straight weekly drop. However todays reading came in above analysts' expectations of 1.3 million. Dow Jones fell 0.43%, S&P 500 lost 0.21% and Nasdaq is trading flat.

 

Oil is trading higher on Thursday as OPEC and allies met to review record output cuts. An OPEC+ ministerial panel made no recommendation on extending record supply cuts into August while Iraq and Kazakhstan submitted plans on oil overproduction compensation. Also supply in the US is back. In the coming weeks, increased drilling activity may restore production to as much as 500,000. barrel per day. On the other hand it is worth paying attention to the data indicating an increase in demand. However, a large oversupply is still present on the market, which should hinder further price increases. During today’s session WTI futures rose  2.21% and Brent crude added 2.32%.

A lot is on the agenda tomorrow. EU Economic Summit meeting, at which EU officials are set to discuss a common recovery fund and a new EU long term budget,  is undoubtedly the most important and may have major impact on the markets. Besides investors will get to know retails sales figures from Australia, UK and Canada. Also FED Chair Powell is scheduled to speak at a Youngstown community event, in Ohio.