Covid-19 concerns
in Europe cloud
prospects for global
economic recovery
U.S. stocks closed mixed on
Friday. Investors piled into the
safety of the dollar and government bonds after fresh Covid-19
restrictions in Europe clouded prospects for the global recovery.
The tech-heavy Nasdaq
Composite climbed 0.4%, or
63.73 points, to 16057.44, its
46th record this year.
The S&P 500 slipped 0.1%, or
6.58 points, to 4697.96 after
closing at a record high Thursday. The Dow Jones Industrial
Average declined 0.7%, or
268.97 points, to 35601.98, its
second consecutive weekly fall.
Covid-19 cases are rising in
the U.S. and Europe, according
to data from Johns Hopkins
University. The Austrian chancellor said Friday that his
country would go into a nationwide lockdown starting
Monday, with restaurants and
retail sectors to close. Areas in
Germany are also going into a
partial lockdown next week.
“As Covid spreads in Europe and restrictions are
strengthened in places in Germany and Austria, there’s a
general recognition that things
may not be going the right
way,” said Sebastien Galy, a
macro strategist at Nordea Asset Management. “This affects
sentiment, both within markets and in households.”
Stock valuations are at extremes, he added: “We had a
relief rally from earnings, but
now people are concerned
about what comes next.”
Oil prices fell, hammered by
concerns about the effect of
renewed lockdowns on energy
demand. Brent crude, the
global oil benchmark, declined
2.9% to $78.89, its fourth consecutive weekly decline.
“Today we are seeing a
very typical end of week selloff as traders decide it’s not
worth the risk to await more
potential demand-side bearish
news,” research company Rystad Energy said.
Philip Orlando, chief equity
market strategist at Federated
Hermes Inc., said he expects
oil prices to rise toward the
end of the year, thanks to inflation, surging demand and
diminishing supply.
The yield on the benchmark
10-year Treasury note dropped
to 1.535% Friday from 1.586%
Thursday. Bond prices rise
when yields decline.
Investors seem to be adjusting their positions ahead
of Thanksgiving week, potentially leading to exaggerated
moves, said Christopher
Brown, co-portfolio manager
of the total return bond strategy at T. Rowe Price Group
Inc. Investors, he said, will
likely soon go back to paying
more attention to inflation.
“I suspect Covid has sort of
faded into the background,”
Mr. Brown said. “I think we’re
going to have wobbles like
this. Is it ever going to go
away? Probably not.”
Foot Locker declined 12%,
or $6.88, to $50.68 after the retailer said it expects supplychain issues to persist. Farfetch sank 14%, or $6.33, to
$39.26 after the fashion e-commerce company reported revenue that missed Wall Street’s
estimates. Financial software
firm Intuit climbed 10%, or
$63.40, to $692.34 after it
raised its full-year guidance.
In Asia, as well, benchmarks were mixed. The Shanghai Composite Index rose 1.1%
and Japan’s Nikkei 225 added
0.5%. Hong Kong’s Hang Seng
Index declined 1.1%. It was
weighed down by e-commerce
giant Alibaba, which cut its
growth forecast this week.
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