Stocks hit by investor caution as Covid vaccine excitement fades – business live
The 12.6% rise in eurozone GDP is still a record high for quarterly growth, despite its downward revision, according to Eurostat:
These were by far the sharpest increases observed since time series started in 1995, and a rebound compared with the second quarter of 2020, when GDP had decreased by 11.8% in the euro area and by 11.4% in the EU.
Eurozone employment was up 0.9% on on a quarterly basis in Q3, according to Eurostat.
However, on an annual basis, employment was still 2% lower in the three months to September, compared to the same period last year.
Brexit jitters and the power struggle at 10 Downing Street are also weighing on global stock markets this morning.
As Susannah Streeter, senior investment and markets analyst at Hargeaves Lansdown, explains:
The wave of optimism which washed over the financial markets has begun to ebb away as anxieties over a Brexit deal take hold once again….The expected departure of two of Boris Johnson’s top advisors has added to the cloud of uncertainty which has been gathering over concerns trade negotiations could be heading for fresh deadlock.
The pound has already steadily gained ground earlier in the week, boosted by the Pfizer announcement but has slipped back to below 1.12 against the euro, reflecting the dawning realisation that there will be no quick fix to the pandemic.
Sterling is ticking up slowly again this morning, but there is a distinct lack of momentum as traders await the latest twist in the Brexit saga.
The clock is ticking on a Brexit deal with a summit of EU leaders on 19 November now seen in Brussels as the final deadline for a draft Brexit deal. Though, unsurprisingly, negotiations are expected to go to the wire.
If you’re looking for some escape from the doom and gloom of the markets, my colleague Sarah Butler has the inside tale on John Lewis’ new Christmas advert (yep, it’s that time of year already).
Over the past decade the retailer’s festive ad has become a big annual TV moment that kicks off the Christmas shopping season.
Its campaigns – from the Hare and the Bear in 2013 to Monty the Penguin in 2014 and last year’s Excitable Edgar the dinosaur – have specialised in heart-warming tales of cute characters to part shoppers from their cash in the department store. And they have been viewed millions of times online.
But 2020 has been a different year. So different, according to the retailer, that they even toyed with abandoning a Christmas campaign altogether.
Watch the 2020 John Lewis Christmas advert – video
Instead it has come up with a pandemic theme of kindness and giving to charity, rather than giving presents, but still with appealing animals, children and snowmen.
The two-minute ad, which will be aired online from Friday morning and then debut on TV during ITV’s The Voice on Saturday, is being used to promote a Give a Little Love charity campaign. It aims to raise £5m over Christmas to help 100,000 families through food redistribution charity FareShare and Home-Start and other charities chosen locally by stores.
Oil prices have also tumbled this morning amid fears that rising Covid cases will continue to hold back an economic recovery, including fuel demand.
Traders are still gloomy after the International Energy Agency (IEA) warned yesterday that global oil demand is unlikely to recover from any Covid vaccine until further into 2021.
Brent crude is down 1.3% at around $42.96 while WTI is down 1.6% at $40.45 per barrel.
However, both benchmarks are still on course for their second weekly gain of around 9%.
Brent crude prices are expected to log another weekly gain. Photograph: Tail1/Refinitiv
We’ve now got a print for Germany’s Dax which is down 0.1% at the open.
As expected, European stocks have fallen into the red at the start of trading:
FTSE 100 is down 0.7%
France’s Cac 40 is down 0.2%
Spain’s Ibex is down 0.5%
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Excitement over a Covid-19 vaccine is fading fast, with investors betting that things are 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 UKrecorded 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%.
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%.
Stay tuned.
The agenda
10.00am GMT: Eurozone Q3 GDP (second estimate)
1.30pm GMT: US producer price index (PPI) for October
