European stocks edged lower early on Monday but remained on track for one of the best months on record. U.S. stock futures were also falling.
The pan-European Stoxx 600
slipped 0.1%, while the German DAX
was 0.1% up, and the French CAC
fell 0.3%. The U.K.’s FTSE 100
rose 0.3%, recovering from earlier losses as COVID-19 vaccine optimism remained in investors’ minds.
U.S. stock futures were lower, led by a 0.6% drop for Dow Jones Industrial Average futures
while those for the S&P 500
were off by about 0.4%. The Dow is headed for its best monthly return since January 1987, and both the Dow
are looking at their best November returns since 1928, according to Dow Jones Market Data.
Some downward pressure on U.S. stock futures came from a report that the administration of President Donald Trump could be ready to blacklist China’s biggest chip maker SMIC
and energy giant CNOOC
There are concerns of rising tensions with China just as President-elect Joe Biden takes office.
Investors will continue to watch a strong second wave of COVID-19 in the U.S. Dr. Deborah Birx, coordinator of the White House coronavirus task force, said she was “deeply worried,” about a post-Thanksgiving coronavirus surge, saying those who traveled for the holiday and gathered in big numbers should “assume” they are infected.
Despite the indifferent start on Monday, the Stoxx 600 has climbed 14.8% in November and is set to record its largest monthly point gain since December 1986, according to Dow Jones Market Data, as COVID-19 vaccine developments and the prospect of lockdown easing have buoyed investors. Europe’s major indexes are also set for record percentage gains, with the FTSE 100 on course for its best month since January 1989, the DAX its best since April 2009, and the French CAC the best since February 1988.
“The current trade seems to be about consolidating the rapid gains in November before looking for a potential Santa rally in December. Month-end rebalancing leading to negative flow for stocks may be a factor today, given the record run up in November,” said Markets.com analyst Neil Wilson. A ‘Santa rally’ refers to typical late-year gains in the stock market around the holiday period.
The positive vaccine news kept coming over the weekend but failed to move stocks higher early on Monday. The U.K. regulator could approve the COVID-19 vaccine from drugmaker Pfizer
and its partner BioNTech
within days, the Financial Times reported on Saturday, and the first immunizations from Dec. 7. The European Union’s European Medicines Agency is set to consider experimental vaccines from both Pfizer and biotech Moderna
next month, with inoculations beginning before the year-end.
Shares of AstraZeneca
rose 1.7%. Analysts at UBS lifted shares to neutral from sell.
down over 2%.
Energy shares fell as oil prices
were under pressure ahead of a meeting of the Organization of the Petroleum Exporting Countries on Monday.
“An extension to production quotas is expected but the producers’ cartel has confounded expectations in the past,” said AJ Bell investment director Russ Mould, in a note to clients.