(Bloomberg) — Global markets tumbled on Monday, with European stocks falling the most since July as investors worried about tighter virus restrictions and a report detailing suspicious transactions at international banks.
S&P 500 equity futures sank 1.8%, indicating U.S. stocks are poised to extend three weeks of losses. Political tensions also making traders nervous as Republicans and Democrats prepare to fight over who will be the next Supreme Court justice. Treasuries rose and the dollar strengthened.
“The market remains concerned about the broader risk emulating from the U.S: Covid, the Supreme Court fight and the upcoming presidential elections,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA. “With U.S. tech stocks looking weak, the need to jump right into U.S. assets feels less critical.”
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Airlines and travel companies led losses in the Europe Stoxx 600 Index. Chief Medical Officer Chris Whitty is set to warn on Monday that the U.K. is at a “critical point” and Germany’s health minister said the trend of cases is “worrying.”
HSBC Holdings Plc fell to the lowest since 1995 and European bank shares slumped after a report by the International Consortium of Investigative Journalists that said lenders “kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties.
Nikola Corp. plunged 22% in U.S. pre-market trading. The electric-vehicle startup that recently partnered with General Motors Co. said its founder stepped down as executive chairman.
From the U.S. election to pandemic’s second wave, there’s a growing conviction among investors that equity markets are expensive given the risks to the global economy. In a House Financial Services Committee hearing on Tuesday, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin are expected to speak about the need for more stimulus.
“There’re too much expectations about U.S. economic resilience,” said Fabrizio Fiorini, chief investment officer at Pramerica SGR SpA. “There is more selloff to come. Election risk is underestimated.”
In Asia, equities trading was subdued. Japan’s stock market was shut for a holiday. The Hang Seng Index slid 1.5%, while equities in China and Australia also retreated. Taiwan’s dollar strengthened to a level not seen in seven years.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index declined 1.8% as of 11:07 a.m. London time.The Stoxx Europe 600 Index sank 2.8%.The MSCI Asia Pacific Index decreased 0.7%.The MSCI Emerging Market Index decreased 1.4%.
Currencies
The Bloomberg Dollar Spot Index gained 0.4%.The euro fell 0.4% to $1.1788.The British pound sank 0.5% to $1.2851.The Japanese yen strengthened 0.4% to 104.15 per dollar.The offshore yuan was little changed at 6.7808 per dollar.
Bonds
The yield on 10-year Treasuries sank three basis points to 0.66%.The yield on two-year Treasuries dipped less than one basis point to 0.14%.Germany’s 10-year yield fell three basis points to -0.51%.Britain’s 10-year yield declined two basis points to 0.167%.Japan’s 10-year yield was unchanged at 0.015%.
Commodities
West Texas Intermediate crude declined 1.8% to $40.25 a barrel.Brent crude dipped 1.6% to $42.38 a barrel.Gold weakened 1% to $1,930.99 an ounce.
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