Stocks pared losses as traders awaited news on negotiations over a fresh round of stimulus amid a resurgence in coronavirus cases around the globe. The dollar climbed.

The S&P 500 came off session lows as banks rebounded from a two-day selloff and energy shares rallied. House Speaker Nancy Pelosi told Democrats that a Covid-19 relief package won’t wait until January as she was scheduled to have another call with Treasury Secretary Steven Mnuchin, while President Donald Trump said he’d go over $1.8 trillion in stimulus. Equities slumped earlier in the day as Europe’s biggest cities clamped down to curb the virus, adding to concern that further restrictions could cause more damage to the global economy.

Investors also assessed data showing an unexpected surge in jobless claims to the highest since August -- a troubling sign for a labor market whose recovery from the pandemic was already slowing. Covid-19’s recent march across the Midwest has caught up with the region’s most populous states: Illinois, Ohio and Michigan. Governments around the world are grappling with how to devise targeted strategies that slow the spread of the virus, without resorting to the kind of broad national lockdowns that have decimated the economy.

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FX Overnight News:

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• European stock indices posted their largest losses in more than three weeks on Thursday, with the pan-Europe Stoxx Europe 600 index largely erasing all its gains for October and dropping the most since Sept. 21.
• European equities have generally lost momentum as the pandemic, an impasse in U.S. stimulus talks and the potential for the U.K’s trade negotiations with the European Union to end badly weigh on investor confidence.
• Europe seems to be losing the fight to keep their economies open as the Covid-19 virus spreads. Starting this weekend, Londoners will be banned from mixing with other households, and residents of Paris and other major French cities face a curfew for four weeks.
• Additionally, although German Chancellor Angela Merkel reported "some movement" on Thursday in talks between European Union leaders about a potential Brexit agreement, the two sides have barely made any progress this week and time is running very short.
• Oil prices weakened Friday amid continued concerns about stagnating demand as a spike in Covid-19 cases in Europe and the United States hits economic activity in two of the world's biggest fuel consuming regions.

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FX Overnight Volatility:

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Today's Economic Calendar

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Chart of the Day:

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Sources: Bloomberg, Investing.com, Finviz.com

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