Global stocks tumble as investors dump risk with COVID-19 cases rocketing and no US stimulus deal

traders — Specialist Meric Greenbaum, left, and trader Fred DeMarco, center, work on the floor of the New York Stock Exchange.
AP/Richard Drew

Global stocks tumbled on Monday, as investors dumped risk assets, with COVID-19 cases rocketing in the US and Europe, while the stimulus saga dragged on.
The US marked a new milestone in the past few days, recording around 83,700 new COVID-19 cases each day. While the fatality rate has been flat, top scientists warn that it tends to lag cases by two weeks.
In Europe, Spain and Italy introduced their strictest measures since national lockdowns ended in May.
"Fortunately, there are several vaccines in the pipeline, or we could have been looking at a pretty significant market reset this morning with COVID-19 flash points flaring up in virtually every corner of the globe this weekend," said Stephen Innes, chief global market strategist at Axi.
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Global stocks tumbled on Monday as investors dumped risk assets, while an ongoing surge of COVID-19 cases across Europe and the US dampened sentiment.

The US stimulus saga continues to drag on, as House Speaker Nancy Pelosi and White House chief of staff Mark Meadows accused each other of "moving the goalposts" on stimulus negotiations as a lack of agreement on funding still dominates markets.

US futures tied to the S&P 500, Dow Jones, and Nasdaq fell 0.9%.

The US has marked a new milestone in the past few days, recording about 83,700 new COVID-19 cases each day, far surpassing the previous record in July. The fatality rate has been flat, but top scientists warn that it tends to lag cases by two weeks.

Meadows seemingly downplayed the highly contagious virus on Sunday by saying the country is "not going to control the pandemic."

"We are going to control the fact that we get vaccines, therapeutics, and other mitigation areas," he said.

"With the US, Spain, and France all seeing record numbers of COVID cases, it is clear that the second wave could be worse than the first unless drastic action is taken," IG Group analysts said.

Italy and Spain announced tighter mobility restrictions over the weekend after recording a sharp rise in cases. But their announcements fell short of national lockdowns.

The Euro Stoxx 50 fell 1.5%, Germany's DAX lost 2%, largely due to steep losses in shares of software maker SAP, while Milan's FTSE MIB index lost 0.8% and Madrid's IBEX 35 was flat.

"A combination of flat COVID-19 death rates, the avoidance of stay-home national lockdowns, and the prospect of more government support is keeping a floor under markets," said Jasper Lawler, head of research at London Capital Group.

A number of vaccines in the pipeline were also helping sugar-coat markets, Stephen Innes, chief global market strategist at Axi, said.

If it weren't for the vaccines, "we could have been looking at a pretty significant market reset this morning with COVID-19 flash points flaring up in virtually every corner of the globe this weekend," he said.

Record virus cases in the US, a lack of stimulus progress, and pre-election nerves sent Asian markets lower. China's Shanghai Composite fell 0.8%, Korea's Kospi fell 0.7%, and Japan's Nikkei fell 0.1%.

Oil extended Friday's losses after Libya's National Oil Corp said national output may double to 1 million barrels a day within four weeks.

Brent crude futures fell 1.75% to $41 a barrel, and West Texas Intermediate fell 2% to $39 a barrel.

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