(Adds U.S. market open, byline, dateline; previous LONDON)
By Lawrence Delevingne
BOSTON, July 30 (Reuters) - Stock markets, oil prices and
the dollar slid on Thursday after President Donald Trump raised
the possibility of delaying the U.S. presidential election
scheduled for November, an unprecedented move that unnerved
investors.
Trump, without evidence, repeated his claims of mail-in
voter fraud and raised the question of a delay, writing in a
post on Twitter, "delay the election until people can properly,
securely and safely vote???" “It's moved the market, for sure," said Priya Misra, head of
global rates strategy at TD Securities in New York. "Not only do
we have uncertainty about who wins, I think we have uncertainty
about the process.”
Ken Polcari, chief market strategist at SlateStone Wealth
LLC in Jupiter, Florida said markets had expected Trump to lose
in November, but not by how much.
"There is a possibility that not only does he lose but they
sweep the whole thing and it goes really far to the left,"
Polcari said.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 nations, fell 7.73 points or 1.39%, to 547.74.
On Wall Street, the Dow Jones Industrial Average .DJI fell
451.58 points, or 1.7%, to 26,087.99, the S&P 500 .SPX lost
44.29 points, or 1.36%, to 3,214.15 and the Nasdaq Composite
.IXIC dropped 99.48 points, or 0.94%, to 10,443.47.
A report on initial jobless claims had set Wall Street up to
open lower as it showed the economy slipping after an early
strong response to the coronavirus. A report on U.S. gross
domestic product showed how much the economy had slowed in the
second quarter.
Dismal earnings reports and weaker-than-expected German GDP
data added to an already sour mood, with the STOXX 600 .STOXX
slipping about 2.1%.
Earlier gains in Asian shares were undone, with MSCI's
broadest index of Asia Pacific shares outside of Japan
.MIAPJ0000PUS trading flat.
U.S. GDP collapsed at a 32.9% annualized rate last quarter,
slightly less than expected, but still the deepest decline in
output since the government started keeping records in 1947, the
Commerce Department said on Thursday. "The fact that it was better than expected maybe is a good
thing, but certainly not much better, and it's still a terrible
number," said Randy Frederick, vice president of trading and
derivatives with the Schwab Center for Financial Research.
The worries came despite news on Wednesday that all U.S.
Federal Reserve members voted as expected to leave the target
range for short-term interest rates between 0% and 0.25%, where
it has been since March 15, when the new coronavirus was
beginning to hit the nation. The unchanged policy setting together with a pledge the Fed
would use its "full range of tools" if needed boosted risk
appetite overnight. All three Wall Street indexes closed higher
Wednesday.
But the Fed was already disappearing in the rear-view mirror
on Thursday. Investor focus returned to negotiations over a new
coronavirus relief package for the world's largest economy.
U.S. President Donald Trump said on Wednesday that his
administration and Democrats in Congress were still "far apart"
on a new coronavirus relief bill. A failure to
agree risks letting a $600-per-week unemployment benefit lapse
when it expires this week.
In currencies, the dollar index fell 0.15% and remains on
course for its worst monthly performance in a decade. USD/
The dollar =USD has fallen on expectations the Fed will
maintain its ultra-loose monetary policy for years to come and
on speculation it will allow inflation to run higher than it has
previously indicated before raising interest rates.
The dollar's weakness has further supported the euro EUR= ,
which was up 0.13% to $1.1805.
Treasuries Benchmark 10-year notes US10YT=RR last rose
11/32 in price to yield 0.5462%, from 0.581% late on Wednesday.
Oil prices fell amid concern that surging coronavirus
infections worldwide would jeopardise a recovery in fuel demand.
O/R U.S. crude CLc1 was down 2.2% at $40.36 per barrel and
Brent LCOc1 was at $42.91, down 1.92% on the day.
Spot gold XAU= dropped 0.6% to $1,959.63 an ounce.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
Fed balance sheet https://tmsnrt.rs/33c98cW
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