Global stocks fall as GDP figures rattle markets

Investor sentiment further dented by news of possible delay in US election

Reuters July 31, 2020
Saudi investors monitor stocks in Riyadh. PHOTO: AFP


Stock markets, oil prices and the dollar all slid on Thursday after US President Donald Trump raised the possibility of delaying the November election and new government data underscored the coronavirus’ deep economic impact.

Trump, without evidence, repeated his claims of mail-in voter fraud and raised the question of delay, writing in a post on Twitter, “delay the election until people can properly, securely and safely vote?”

“It’s moved the market, for sure,” said Priya Misra, Head of Global Rates Strategy, at TD Securities in New York. “Not only do we have uncertainty about who wins, I think we have uncertainty about the process.”

A report on additional jobless claims and collapsed gross domestic product (GDP) had already set Wall Street up to open lower.

The MSCI world equity index, which tracks shares in 45 nations, fell 6.24 points, or 1.1%, to 549.23.

On Wall Street, the Dow Jones Industrial Average fell 357.63 points, or 1.35%, to 26,181.94, the S&P 500 lost 34 points, or about 1%, to 3,224.44 and the Nasdaq Composite dropped 61.21 points, or 0.58%, to 10,481.74.

Dismal earnings reports and weaker-than-expected German gross domestic product (GDP) data added to an already sour mood in Europe, with the Stoxx 600 slipping about 2.25%.

Earlier gains in Asian shares were undone, with the MSCI’s broadest index of Asia-Pacific shares outside Japan closing 0.17% lower, while Japan’s Nikkei lost 0.26%.

The US GDP collapsed at a 32.9% annualised rate last quarter, the Commerce Department said on Thursday.

“The fact that it was better than expected may be is a good thing, but certainly not much better, and it’s still a terrible number,” said Randy Frederick, Vice President of Trading and Derivatives with Schwab Centre for Financial Research.

Published in The Express Tribune, July 31st, 2020.

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