European stocks struggle for traction as virus worries, U.S. Thanksgiving holiday keep investors on the sidelines
By Barbara Kollmeyer
Germany plans to extend its lockdown as cases hit a record
European stocks struggled for traction on Thursday, as concerns over climbing COVID-19 cases worldwide and a U.S. holiday kept investors on the sidelines.
The Stoxx Europe 600 index traded flat, similar to Wednesday's session. The month of November has seen a 14% gain for the index thanks to a string of positive vaccine news that has cheered investors. If those gains hold, that will mark the best monthly return in 30 years, according to FactSet data. The German DAX and the French CAC 40 fell 0.1% each, and the FTSE 100 dropped 0.5%.
U.S. stock futures were flat outside of higher Nasdaq-100 futures. U.S. markets will be closed for the Thanksgiving Day holiday (https://www.marketwatch.com/story/is-the-stock-market-open-on-wednesday-thanksgiving-and-black-friday-11606253338?mod=home-page), and reopen for a shortened session on Friday.
The Nasdaq Composite closed at a fresh record for the first time in three months on Wednesday (https://www.marketwatch.com/story/dow-set-to-pull-back-slightly-from-30-000-ahead-of-thanksgiving-holiday-11606308592), but the Dow Jones Industrial Average edged back from its historic close above a milestone at 30,000 seen Tuesday.
Opinion: The Russell 2000 has had a powerful November -- and the gains aren't over (https://www.marketwatch.com/story/the-russell-2000-had-a-powerful-november-and-its-not-over-2020-11-25?mod=home-page)
That Dow record was fueled by a rotation into previously unloved sectors of the market that have been beaten down by the pandemic. But that action paused as investors absorbed a mixed batch of U.S. data ahead of Thursday's Thanksgiving Day holiday that comes as 45 of the country's states battle record infections and hospitalizations. The country's death toll is the highest in the world.
Investors remain concerned markets may have run up too soon, too fast, despite positive COVID-19 vaccine news, as the rollout of those will take time and global economies are still facing deep struggles.
Read:U.S. is 'in the middle of the Fight of the Century,' says former CDC head as cases rise in 45 states, hospitalizations set record (https://www.marketwatch.com/story/us-is-in-the-middle-of-the-fight-of-the-century-says-former-cdc-head-as-cases-rise-in-45-states-hospitalizations-set-record-2020-11-24?mod=ciara-linnane)
Meanwhile, Europe continues to battle its own second virus wave. Germany extended partial lockdown measures (https://www.bild.de/news/inland/news-inland/corona-regeln-in-bayern-kabinett-beschliesst-aktuelle-schul-massnahmen-74143314.bild.html) until Dec. 20, with bars, restaurants and other places of leisure closed, after the country's COVID-19 related deaths reached a record on Wednesday. Gatherings will be limited to five persons, but the measures will be temporarily eased over Christmas.
The partial lockdown is expected to trigger a fall in German consumer sentiment for December, market-research group GfK said Thursday (https://www.marketwatch.com/story/german-consumer-sentiment-set-to-decline-2020-11-26?mod=mw_latestnews).
While markets appear to have taken the news of Germany's extended lockdowns in stride, the decision itself "suggests that the coming winter is likely to be a long hard slog for businesses all over Europe, as populations tire of having their freedoms restricted, and concerns grow about the prospect of much longer term economic damage," Michael Hewsoon, chief market analyst at CMC Markets UK, told clients in a note.
In the U.K. on Wednesday, Chancellor of the Exchequer Richie Sunak said the nation's economy was poised to contract by 11.3% this year due to COVID-19, making for the biggest downturn in more than 300 years. He unveiled a GBP4.3 billion plan (https://www.fnlondon.com/articles/uk-economy-will-contract-by-11-3-largest-drop-in-over-three-centuries-20201125) to tackle the likelihood of mass unemployment that will include a 2.2% hike in the minimum wage (https://www.marketwatch.com/story/the-uk-is-increasing-the-minimum-wage-how-does-it-compare-with-the-us-and-rest-of-the-world-2020-11-25).
Read: 'Desperate times need desperate measures' -- analysts react to U.K. spending review (https://www.fnlondon.com/articles/desperate-times-need-desperate-measures-city-reacts-to-spending-review-20201125)
Shares of Britvic rose 2% after the soft drinks giant posted a slight gain in pretax profit for the 2020 financial year (https://www.marketwatch.com/story/britvic-profit-rises-but-warns-of-virus-hit-2020-11-26?mod=mw_latestnews). It also warned that the pandemic will continue to affect its performance in the first half of the current year.
And shares of Remy Cointreau slipped nearly 1% after French spirits group said net profit for the first half of fiscal 2021 fell, though it expects a second-half recovery (https://www.marketwatch.com/story/remy-cointreau-sees-2h-recovery-as-profit-falls-2020-11-26?mod=mw_latestnews).
Repsol shares fell more than 2% after the Spanish energy group said it would invest 18.3 billion euros ($21.8 billion) (https://www.marketwatch.com/story/repsol-to-invest-218b-as-part-of-five-year-plan-2020-11-26?mod=mw_latestnews) between 2021 and 2025 to accelerate growth of low-carbon projects, become sustainable and bolster shareholder return.
Losses for major oil companies weighed on main indexes, with crude oil prices falling by over 1% on Thursday. Shares of BP (BP.LN) and Total (FP.FR) fell more than 0.5% each.
Shares of major banks were also in the red, led by Banco Santander (SAN.MC), down 1.8%, and Lloyds Banking Group (LLOY.LN) down 3%.
-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 26, 2020 04:56 ET (09:56 GMT)
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