Global stock markets sink as U.S. virus concerns offset Europe rebound hopes

Global equities sank and perceived safe-haven assets like U.S. Treasuries and gold gained on Friday as investors weighed hopes that Europe will continue to rebound from the coronavirus pandemic’s economic damage against concerns over a record surge in new COVID-19 infections in the United States.

The euro zone is “probably past” the worst of the economic crisis, European Central Bank President Christine Lagarde said, while urging authorities to prepare for a possible second wave.

There were at least 39,818 new coronavirus cases across the United States on Thursday, the largest one-day increase yet. The governor of Texas temporarily halted the state’s reopening as infections and hospitalizations surged.

MSCI’s gauge of stocks across the globe shed 1.25% following broad declines in Europe and slight gains in Asia. The index is up approximately 40% since its March lows.

In midday trading on Wall Street, the Dow Jones Industrial Average fell 606.52 points, or 2.36%, to 25,139.08, the S&P 500 lost 60.95 points, or 1.98%, to 3,022.81 and the Nasdaq Composite dropped 196.04 points, or 1.96%, to 9,820.97

The euro gained versus the U.S. dollar and was on track for its biggest weekly rise in three weeks after the ECB reaffirmed its dovish stance in the minutes of its latest policy meeting.

Concerns about the economic fallout from the surge in U.S. coronavirus cases helped bolster perceived safe havens. The dollar index rose 0.07%, while benchmark 10-year U.S. Treasury notes last rose 12/32 in price to yield 0.6348%, from 0.674% late on Thursday.

Spot gold added 0.3% to $1,766.71 an ounce. U.S. gold futures gained 0.15% to $1,764.70 an ounce.

Credit Suisse changed its position on global equities to “neutral” from “overweight,” saying it was taking profits after the recent rally, but kept its overweight positions in credit markets.

Record high inventories and fears of declining demand pushed oil prices lower. U.S. crude CLc1 recently fell 1.42% to $38.17 per barrel and Brent LCOc1 was at $40.68, down 0.9% on the day.

Global stock markets sink as U.S. virus concerns offset Europe rebound hopes, Reuters, Jun 26