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Markets struggle as coronavirus jabs delayed

Increased travel restrictions damping sentiment as well

By AFP - Jan 17,2021 - Last updated at Jan 17,2021

People wait in line for Pfizer COVID-19 vaccines at the opening of a new vaccination site at Corsi Houses in Harlem New York, on Friday (AFP photo)

NEW YORK — Stock markets struggled on Friday as investors weighed a coronavirus vaccine delay against US President-elect Joe Biden's $1.9 trillion stimulus plan, which had already been largely priced in.

Wall Street appeared unimpressed by the gigantic proposal, with all major indices dialing back further from the previous week's record high closes as traders feared the incoming Democratic administration will hunt for revenue in the wallets of companies and consumers.

"Sentiment is being dampened... amid speculation that the increase in government spending could bring about higher taxes," Wells Fargo advisers said in an analysis.

The Dow finished 0.9 per cent lower for the overall week, and the Nasdaq and S&P 500 both lost 1.5 per cent for the same period. US markets are closed for a holiday on Monday.

In Europe, London stocks fell by almost 1 per cent in Friday trading, with sentiment also dented by news that the UK economy contracted by 2.6 per cent in November owing to virus curbs.

In the eurozone, Frankfurt and Paris were off by 1.4 per cent and 1.2 per cent, respectively, with increased travel restrictions said to be weighing on the mood as well.

Asia had already found it hard to make gains overnight.

The dollar was generally higher against other major currencies, while oil prices were more than two per cent lower.

Bitcoin stabilised above $36,000 after a record-breaking run that climaxed last week.

Vaccine letdown 

 

Further souring sentiment on Wall Street was weak US retail sales data on Friday and mixed earnings from major banks.

The news overshadowed Biden's announcement the day before of the stimulus package aimed at "the twin crises of a pandemic and this sinking economy".

Details include an extra $1,400 cash handout for individuals, a hike in the minimum wage to $15 an hour and billions of dollars to ramp up vaccinations so that 100 million are administered in 100 days.

"Most of what Biden announced, with respect to a fresh fiscal aid package for the US economy, was pretty much in line with expectations," CMC Markets analyst Michael Hewson commented.

Traders also did not like US pharmaceutical giant Pfizer's announcement that it would delay shipments of crucial coronavirus vaccines in the next three to four weeks owing to works at its European plant in Belgium.

Pfizer said modifications at the Puurs factory were needed to boost production capacity from mid-February of the vaccine developed with German partner BioNTech.

Germany, which has the EU's biggest economy, voiced regret over the "last minute and unexpected" delay by Pfizer.

"COVID-19 cases present a clear and present danger," to oil prices in particular, remarked Stephen Innes, chief market strategist at Axi.

Surging virus infections and deaths — and the lockdowns they force governments to impose — are also major obstacles for stock prices.

Portugal entered a fresh lockdown on Friday while Britain began requiring negative tests for entry, and fresh curbs on populations were announced from Brazil to Lebanon to China.

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