WATCH: European stocks fall as COVID-19 cases surge
Markets are rejoicing over various COVID-19 vaccine trial advancements, but the immediate toll of the pandemic – both economic and physical – is still causing concerns on Thursday.
The US has reached 250,000 coronavirus-related deaths. Fatalities also hit their highest levels since April in Italy and Turkey on Wednesday, while cases in Germany, the UK and France appear to have reached a plateau. Coronavirus-related mortality rates are rising again in Spain as well.
US markets closed weaker on Wednesday as COVID-19 restrictions continue mounting. New York City is closing public schools amid rising cases.
“With infection and hospitalisation rates rising, and the risk that current lockdown restrictions either remain in place, or get extended into 2021, the probability that any economic damage will become permanent is only likely to increase,” said Michael Hewson, chief market analyst at CMC Markets. “These risks then need to be offset by the longer-term benefits of a workable vaccine, which even if starting to get rolled out next year, could take up to two years to really make a difference.”
Meanwhile, Pfizer (PFE) and BioNTech (BNTX) reported on Wednesday that the final analysis of their Phase 3 trial showed that the vaccine was 95% effective against COVID-19, catching up with Moderna’s (MRNA) vaccine candidate results. Most notably, the efficacy rate for those above 65 was 94%, which will help protect the most vulnerable groups and return society back to normal quicker when governments start rolling out their immunisation campaigns.
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Meanwhile, EU chief negotiator Michel Barnier confirmed on Thursday that Brexit talks are halted “for a short period” with the UK’s top negotiator David Frost after one of his team fell ill with the coronavirus. “The teams will continue their work in full respect of guidelines,” he added.
There are also reports that the UK could announce a trade deal with Canada as soon as Thursday, replacing that which will be lost when leaving the transition period with the EU.
Other key remarks to watch out for later on Thursday include those from European Central Bank president Christine Lagarde, president and CEO of the Federal Reserve Loretta J Mester, and Eric Rosengren, president and CEO of the Boston Fed.
In the US, jobs data published on Thursday show another 742,000 Americans filed for first-time unemployment benefits last week, as new jobless claims unexpectedly rose as COVID-19 cases kept rising.
European Union leaders will be meeting via videoconference on Thursday evening.
Asian markets were mixed at market close. Japan’s Nikkei (^N225) fell 0.4%, the Hong Kong Hang Seng (^HSI) was down 0.7%, and the Shanghai Composite (000001.SS) gained 0.5%. South Korea’s KOSPI (^KS11) gained 0.1%.
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