Stocks were on course for a cautious start to the week as investors assessed valuations in the wake of the steep slide in tech giants and looked ahead to a Federal Reserve policy meeting that could provide clues on the outlook. The dollar edged up.
Currency markets saw muted moves as trading began Monday. Global stocks are coming off the back of the first consecutive weeks of declines since March, with futures pointing to a mixed start in Asia.
September has brought with it a shattering of calm that had largely prevailed in the previous five months, with tech stocks leading losses. With the Fed expected this week to maintain its dovish stance on policy, investors will continue to monitor signs the global economy is recovering from the pandemic.
“With no clear assured path to economic recovery and release from the grips of coronavirus and with the added geopolitical risks of the fast-approaching U.S. presidential election and then the Brexit deadline at year-end, we expect broad market sentiment to remain fragile for the foreseeable future,” said Simon Ballard, chief economist at First Abu Dhabi Bank.
On the virus front, the U.S. will “likely” deploy a vaccine to the public by year-end, Pfizer Inc. chief executive officer Albert Bourla said. That’s a shorter time frame than most public health officials have suggested. Earlier, AstraZeneca Plc and the University of Oxford restarted a U.K. trial of their vaccine after the study was halted over concerns about a participant who fell ill.
Here are some key events coming up: China industrial production and retail sales data is due on Tuesday. Wednesday sees the FOMC policy decision and news conference from chair Jerome Powell. Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday. Friday sees quadruple witching for U.S. markets when the quarterly expiration of futures and options on indexes and stocks happens on the same day.