Stock slumped to the lowest level since July as a report detailed suspicious transactions at global banks amid growing concern over tighter coronavirus restrictions. Treasuries and the dollar climbed.
The S&P 500 extended losses into a fourth day as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. tumbled. Carnival Corp. and American Airlines Group Inc. paced declines in travel companies. Nikola Corp.’s founder stepped down in the wake of regulatory probes and a short seller’s allegations that the electric-truck startup misled investors, sending shares plunging. Oil slid as Libya signaled the resumption of some crude exports.
A new investigation by the International Consortium of Investigative Journalists says JPMorgan, Deutsche Bank AG and HSBC Holdings Plc were among the global banks who “kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties on these financial institutions. The documents detailed more than US$2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity, the report said.
As U.S. deaths related to COVID-19 approached 200,000, former Food and Drug Administration Commissioner Scott Gottlieb said he expects the nation to experience “at least one more cycle” of the virus in the fall and winter. Germany’s health minister warned that the trend of cases in Europe is “worrying” as the U.K. cautioned the rate of coronavirus infections could reach around 50,000 by mid-October. The warning comes amid expectations that local restrictions could soon be extended to London.
President Donald Trump said he wants his looming Supreme Court pick confirmed before the Nov. 3 election, escalating pressure on Senate Republicans and Majority Leader Mitch McConnell as he seeks to protect his most vulnerable members. Trump said Monday that he’ll name a replacement for the late Justice Ruth Bader Ginsburg by the end of the week and that he wants that followed quickly by hearings and a pre-election confirmation vote. He warned that any Republicans who buck him would pay at the ballot box.
“Markets are starting the week in risk-off mode,” said Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. in New York. “It’s hard to point to one single cause as there are many risks building. Some of these drivers have been present for weeks, if not months, but the confluence of so many negative factors has been too much for equity markets to ignore.”
Speculative investors are souring on the outlook for U.S. technology stocks. Positioning in Nasdaq-100 mini futures is the most bearish since April 2008, the latest Commodity Futures Trading Commission data show. High-flying tech shares could remain under pressure until lingering optimism still evident in options bets normalizes, according to Julian Emanuel, a strategist at BTIG LLC.
These are some of the main moves in markets:
Stocks
- The S&P 500 declined 2.1 per cent as of 9:42 a.m. New York time.
- The Stoxx Europe 600 Index sank 2.7 per cent.
- The MSCI Asia Pacific Index fell 0.8 per cent.
Currencies
- The Bloomberg Dollar Spot Index increased 0.5 per cent.
- The euro decreased 0.6 per cent to US$1.177.
- The Japanese yen appreciated 0.4 per cent to 104.16 per dollar.
Bonds
- The yield on 10-year Treasuries dipped four basis points to 0.66 per cent.
- Germany’s 10-year yield declined four basis points to -0.52 per cent.
- Britain’s 10-year yield fell three basis points to 0.158 per cent.
Commodities
- The Bloomberg Commodity Index dipped 1.1 per cent.
- West Texas Intermediate crude dipped 2.3 per cent to US$40.16 a barrel.
- Gold depreciated 1.5 per cent to US$1,921.75 an ounce.
–With assistance from Adam Haigh, Gregor Stuart Hunter, Anchalee Worrachate and Lynn Thomasson.
