European stocks, futures retreat; Treasuries rise

Bloomberg

European stocks and the US futures dropped as coronavirus infections continued to climb and investors doubted that Washington lawmakers will reach an economic stimulus package anytime soon.
German software maker SAP SE plunged 20% after cutting its revenue forecast, saying that pandemic will continue to hurt business.
Investors sought protection in haven assets. Treasuries rise, sending yields on the 10-year lower. The dollar strengthened against most other major currencies, while gold was little changed.
Investors remain focused on the prospect of a US economic aid package, even as time runs out to finish a deal by the November election. US House Speaker Nancy Pelosi said the burden is on President Donald Trump to push forward on stimulus talks. Treasury Secretary Steven Mnuchin said there’s been significant progress but blamed Pelosi for holding up an agreement by not compromising on her party’s priorities.
“There is very limited incentive on both sides to get a deal done,” Joseph Shaposhnik, a portfolio manager at TCW, said on Bloomberg TV. “The market has baked that in, has baked in the election and is looking out six months and thinking what are the odds life begins to normalize, a vaccine is introduced.”
On the virus front, the World Health Organisation’s director general said some countries in the northern hemisphere are facing a “dangerous moment” after US infections hit a record for the second day.
European countries are tightening restrictions on business. Spain has announced a nationwide curfew and Italy introduced the strongest measures since May.
Oil futures in New York fell slid below $39 a barrel. The MSCI Asia Pacific Index dropped 0.3%, with markets in Japan and South Korea posting declines.
Meanwhile, the Chinese Communist Party’s Central Committee is holding its all-important plenum, where it’s expected to chart the course for the economy’s development for the next 15 years.
Bank of Japan and the European Central Bank will discuss monetary policy decisions on Thursday, followed by briefings from Governor Kuroda and President Lagarde.
Futures on the S&P 500 Index dipped 1% as of 8:19 am New York time and the Stoxx Europe 600 Index falls 0.8%.
While the MSCI Asia Pacific Index dipped 0.3%, the MSCI Emerging Market Index declined 0.3%. The Bloomberg Dollar Spot Index climbed 0.3% to 1,161.84 and the euro fell 0.3% to $1.1827.
While the British pound declined 0.3% to $1.3008, the Japanese yen weakened 0.2% to 104.87 per dollar.
The yield on 10-year Treasuries declined four basis points to 0.80% and the yield on two-year Treasuries declined one basis point to 0.15%. While Germany’s 10-year yield declined two basis points to -0.59%, Britain’s 10-year yield fell three basis points to 0.252%.
West Texas Intermediate crude decreased 3.2% to $38.49 a barrel and gold weakened 0.2% to $1,898.64 an ounce.