Global stocks retreat as traders worry about upcoming US elections
Global stocks pared back earlier losses as traders reacted to earnings by American tech giants like Apple, Facebook, and Amazon. Investors are also concerned about next week’s election in the United States and the ongoing travel restrictions in Europe and the United States. Yesterday, tech companies like Apple, Amazon, and Facebook released better-than-expected quarterly results. However, the market was concerned about Apple’s iPhone revenue and Amazon’s potential slowdown in its retail segment. As a result, its shares are down by more than 1% in the premarket. Facebook’s shares are also falling even after the company reported strong ad revenue.
Stocks are declining because of the upcoming American election. Recent polls have pointed to a strong performance by Joe Biden. However, like in 2016, investors are waiting for the official results to confirm that. The biggest election-risk is that more than 60 million Americans have already voted via absentee ballots and mail. This means that the results could take a few days to be confirmed. Therefore, with divisions in the country rising, the market is concerned about potential violence. The Dow Jones, S&P 500, and Nasdaq 100 will end the month near the lowest level since July.
The euro is relatively unchanged today as traders react to the European Central Bank (ECB) interest rate decision. In the decision, the bank hinted that it will act in December as the region continues to see rising cases and low inflation. In a report earlier today, Eurostat said that the region’s annual inflation fell to -0.3% in October, which is below the ECB target of 2%. The core CPI rose by just 0.2%.
Meanwhile, data showed that the region’s economy rose by 12.7% in the third quarter after dropping by 11.8% in Q2. It dropped by 4.3% on a QoQ basis. The YoY and QoQ performance was better than the expected 9.4% and -7%. With some major economies like Germany and France in partial lockdown, there is a likelihood that the bloc will continue to weaken.
The EUR/USD pair is trading at 1.1670, which is close to the lowest level since June 29. On the four-hour chart, the price is slightly above the lower line of the Donchian channel. It is also slightly below the triple exponential moving average (TRIX). Also, oscillators like the moving average convergence divergence (MACD) and the RSI have been falling. Therefore, the pair will likely end the week at the current range with the key support and resistance being at 1.1650 and 1.1700, respectively.
The FTSE 100 pared back earlier losses as traders reacted to the positive results by NatWest. The index is trading at £5571, which is higher than the intraday low of £5484. On the four-hour chart, its volatility is rising as evidenced by the Average True Range (ATR). The signal line of the MACD has made a bullish crossover with the histogram. Also, the price is slightly above the 15-day and 25-day moving averages. Therefore, the index will likely close today in the current range ahead of the coming month.
The EUR/GBP pair dropped to an intraday low of 0.8990, which is the lowest level it has been since September. On the four-hour chart, the price is below the descending pink trendline. It has also moved below the important support at 0.900. It is also below the envelopes indicator while the RSI is falling. The pair may continue falling as bears aim for the next support at 0.8950.