Spreadex | Oct 29, 2020 05:06
There are myriad different reasons you could point to in order to explain the market’s monstrous performance this Wednesday, a fact that in and of itself has forced investors beyond the tipping point of acute anxiety into a full-blown breakdown.
As a kind of nightmarish roll call, you have, DEEP BREATH: an impending national lockdown in France, a likely ‘lockdown light’ in Germany, the kind of numbers that would justify a ‘circuit breaker’ in the UK, and half a million covid-19 cases in the last week in the USA. Not to mention comments from the UK Vaccine Taskforce, claiming – obviously, but no less dishearteningly – that the first batch of vaccines ‘is likely to be imperfect’.
And that’s just the pandemic. You’ve also got the lack of pre-election stimulus over in the States, and what that will mean for the short-term hopes of a package if Joe Biden dethrones Donald Trump.
Then, of course, there’s the election itself. Haunted by memories of 2016’s sure-fire Hillary Clinton victory, Biden’s sizeable lead in the polls isn’t providing any comfort for investors. Nor is the thought of how Trump might react if he does indeed lose.
It’s more uncertainty in the most uncertain of times, and has had a punishing impact on the Western markets.
The Dow Jones donned its speedos and took a dive after the bell, plunging 860 points to a near-3-month nadir just above 26,600. It’s been a hell of a week for the Dow – and remember, the election’s not until next Tuesday! – with the index currently down around 1600 points since Monday afternoon.
As tends to be the case, that US bloodbath only tightened the screws on European indices – which is pretty scary given how badly they were flogged during the morning session.
The DAX took the dubious title of Wednesday’s worst performer, sinking 5-whole-percent as it tumbled below 11,500 for the first time in almost exactly 5-months. For context, the German bourse opened the week above 12,600.
The CAC wasn’t too far behind its Teutonic cousin, dropping 4.6% as it desperately clung on above 4500.
The FTSE performed better than its European peers, though better in this case still translated to a 3.6% decline, forcing the index to 5530 for the first time in close to 7-months.
Tomorrow should bring with it news of a sharp third quarter rebound for the US economy, with analysts forecasting growth of 32% at the annualised rate, compared to the 31.4% contraction suffered in Q2. Whether or not that means anything to investors at this point, however, is another question entirely – last quarter’s figures don’t matter as much when the current quarter looks so dire.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."
Written By: Spreadex
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.