ASX set to slide lower as Wall Street slips on stimulus uncertainty
Wall Street’s main indexes slipped on Monday (US time) as investors worried that they might not see a coronavirus economic stimulus deal before the November 3 presidential election.
While House Speaker Nancy Pelosi said Sunday that she was optimistic legislation could be pushed through before the election, but that an agreement would have to come by Tuesday for that to happen.
“People are coming around to the idea that it’s a really short time frame and it’s probably not going to happen before the election,” said Shawn Snyder, head of investment strategy at Citi’s personal wealth management business.
While the majority of investors think there will be a COVID-19 relief bill according to Snyder, they don’t know when it will happen and “would like clarity on it as soon as they can get it,” said the strategist.
A spokesperson told Fox on Monday that the White House was “cautiously optimistic” that Pelosi was moving toward making a deal.
But this was after last week when the White House proposed a $US1.8 trillion ($2.5 trillion) stimulus package that Pelosi rejected because it fell short and stuck to her demand for $US2.2 trillion in aid.
In mid-afternoon trade, the Dow Jones is 0.7 per cent lower, the S&P 500 has lost 0.8 per cent and the Nasdaq has shed 0.7 per cent, It sets up the ASX for losses this morning, with futures at 5.19am AEDT pointing to a fall of 21 points, or 0.3 per cent, at the open.
Wall Street’s fear gauge was rising for a sixth straight session as election campaigns kicked into high gear, with early voting starting in Florida, a battleground state that could decide the presidential election.
President Donald Trump and his Democratic challenger Joe Biden will debate for a final time on Thursday.
All 11 major S&P industry sectors were trading lower, with health care and communication services index leading the percentage declines, dipping more than 1 per cent.
Amazon.com, Facebook and Microsoft were all down more than 1 per cent and creating the biggest drags on the S&P 500.
“It’s just the general volatility here. I wouldn’t be surprised to see this bouncing around all day,” said Tony Bedikian, head of global markets at Citizens Bank.
The Dow Jones Transport Average reversed course after making gains earlier on Monday with airlines such as United Airlines advancing after the US Transportation Security Administration’s (TSA) said it screened more than 1 million airline passengers on Sunday for the first time since mid-March.
Video-streaming service Netflix was up around 1 per cent ahead of its results on Tuesday.
After the financial sector set a mixed tone to the start of the third-quarter earnings season, investors will look to results from about 91 S&P 500 companies this week, including IBM, whose quarterly report is expected later in the day.
Oilfield services provider Halliburton posted a fourth consecutive quarterly loss as this year’s slump in oil prices due to the COVID-19 pandemic hit demand for its services. Its shares, however, rose 0.2 per cent.
ConocoPhillips slipped 1.3 per cent as it agreed to buy US shale oil producer Concho Resources for $US9.7 billion as the energy sector continued to consolidate. Concho fell 0.9 per cent.
Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favoured decliners.
The S&P 500 posted 25 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 98 new highs and 24 new lows.
Reuters
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