After a couple of sessions arguably on the sidelines, covid-19 returned to the forefront of investors’ minds following the latest China data dump and another UK travel update.
Once again Chinese retail sales became a sticking point for the markets. Though an improvement on June’s -1.8%, July’s -1.1% reading marked the 2nd month in a row that retail sales in the country had failed to climb back into positive territory as expected. Combine that with an industrial production reading that remained unchanged at 4.8%, missing the forecast 5.1%, and there are signs of a stalling recovery in the superpower.
If that wasn’t enough, the UK has added France to its quarantine list due to the latter’s spike in coronavirus cases – that’s the 2nd major holiday destination to be hit after Spain was removed from the country’s travel corridor a couple of weeks ago.
This, understandably, did a number on Europe’s travel stocks. British Airways-owner IAG (LON:ICAG) fell 4%, with easyJet (LON:EZJ) dropping 5.4% and TUI (LON:TUIT) 5.5%.
All in all it contributed to a moody open for the continent’s markets. The FTSE continued to unwind its hard-to-justify post-recession reveal gains, falling another 1.1% to return to 6130. The DAX slipping back below 12950 as it dropped half a percent, while the French CAC lost 1.1%, taking it the wrong side of 5000.
Currently the Dow Jones is looking set to avoid the same kind of decline seen in Europe, with the futures pointing to a 0.1% dip. Still, that pushes the Dow that bit further away from 28000, a price it briefly went across earlier in the week, but failed to close above.
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