It’s a flip of the market’s recent momentum and a callback to how it was trading earlier this year, before enthusiasm burst higher in November that one or more COVID-19 vaccines will get the global economy closer to normal next year.
In Europe, stocks were subdued, and the value of the British pound was sinking as negotiators in the United Kingdom’s exit from the European Union seemed to remain stuck on the same issues that have prevented a deal for months.
Such political concerns are helping to slow momentum for financial markets around the world, as is the troubling rise in coronavirus counts and deaths across much of the United States and Europe. The worsening pandemic is pushing governments around the world to bring back varying degrees restrictions on businesses, keeping customers away from businesses and threatening to drag down the economy through what’s expected to be a bleak winter. Job growth in the United States slowed sharply last month, a report on Friday showed, and the numbers may get only worse.
That’s helped dent the powerful and weeks-long run for markets around the world. The S&P 500 had one of its best months in decades during November and added more to it last week, in large part because of the vaccine optimism. Hope has also built that Washington may be able to get past its partisanship to deliver some form of financial aid for the still-struggling economy in the meantime.
If Congress fails to reach a deal to carry the economy through the winter, stocks could be set up for more declines. Chevron Corp. fell 1.8 per cent amid worries that the worsening pandemic could choke off more demand for oil and energy.
Other companies whose profits desperately need the economy to improve and the world to get closer to normal were also leading the market lower. Mall owner Simon Property Group dropped 3.3 per cent, Olive Garden-owner Darden Restaurants fell 3.4 per cent and airline operator Alaska Air Group lost 2.5 per cent.
In Europe, France’s CAC 40 was down 0.8 per cent, Germany’s DAX lost 0.3 per cent and the FTSE 100 in London rose 0.1 per cent as one of the most intense days in the long-running Brexit trade negotiations showed no visible progress.
The yield on the 10-year Treasury fell to 0.93 per cent from 0.96 per cent late on Friday.