S&P 500 futures held steady to start the week, suggesting recent pressure on American markets could be easing, but oil prices slid further on continued concerns that international lockdowns will sap energy demand.
By early afternoon Monday in Hong Kong, S&P futures were up 0.2%. Last week was tough for U.S. stocks, with the Dow Jones Industrial Average shedding 6.5%, its worst weekly performance since March.
Global markets fared better Monday, with most indexes in the Asia-Pacific region gaining ground. Japan’s benchmark Nikkei 225 and South Korea’s Kospi Composite both added more than 1%, while Hong Kong’s Hang Seng rose 0.9%.
“Investors are viewing Asia as a safe haven ahead of a good probability that we could see a contested election,” said David Chao, Invesco’s global market strategist for Asia-Pacific excluding Japan.
President Trump trails former Vice President Joe Bidenby 10 percentage points among voters nationally in the final days of his re-election campaign, a Wall Street Journal/NBC News poll found, at 42% to Mr. Biden’s 52%. This survey, conducted from Oct. 29 to the 31, was the poll’s final reading of voter opinion before Tuesday’s election.
A return to lockdown measures in Europe, amid a resurgence of coronavirus cases, was also pushing investors into markets where Covid-19 is contained, Mr. Chao said.
Oil extended its recent pullback, with front-month West Texas Intermediate futures falling 3.6% to $34.49 a barrel.
Crude had traded at around $40 for months, following a summer recovery, but it has started to weaken on concerns that a jump in virus infections could curb demand for the commodity. Futures prices for Brent crude, the global benchmark, and WTI, its U.S. equivalent, both fell more than 10% last week, logging their worst weeks since April.
Britain, France, Germany, Ireland, Austria and Belgium are all now back under pandemic-containment regimes similar to those imposed in the spring, with bars and restaurants shut and people’s freedom to socialize with others curtailed.
Daniel Gerard, senior multi-asset strategist at State Street Global Markets, said in addition to lower demand, oil prices could suffer further due to pent-up supply. Libya recently negotiated an end to an eight-month blockade of its supply, while data from the Energy Information Administration showed surprise inventory increases in the U.S. in late October.
“The dynamic has been pretty poor for the oil industry. Even with any improvement in sentiment for demand, supply will more than likely outpace demand,” Mr. Gerard said.
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