Spreadex | Oct 28, 2020 09:24
Grim. That’s the only word that can describe the markets on Wednesday morning, investors’ covid-19 fears attacking stock prices in ways not seen since the start of the Western phase of the pandemic back in March.
They’re not wrong to be worried. Emmanuel Macron is likely to announce a month-long national lockdown in France this evening, after the country posted its highest number of daily fatalities since April. Angela Merkel is set to argue for ‘lockdown light’ when she talks to Germany’s regional leaders later today. And in the UK, the daily death total hit its worst levels since May, increasing the call for a nationwide ‘circuit breaker’, rather than the government’s current piecemeal approach.
That’s not to mention the near half a million people who have caught covid in the USA in the space of a week, nor the new case flashpoints that are popping up in China.
As has been the case since March, investors’ concerns aren’t over the number of daily cases and deaths per se, but the severity of the restrictions that will greet each new leap and the crushing impact said measures will have on the global economy. Just when countries had tried to get back to their feet during the third quarter, as it set to be evidenced by the latest GDP figures on Thursday and Friday.
Bags packed and gas tank full, investors fled the markets with the speed and panic of a family trying to escape a disaster scene.
The DAX and CAC, which have spent the week trading off the title of worst hit major index, both shed 3% after the bell. That leaves the German bourse clinging on above 11,700 – just – and at its lowest level in close to 5-months. The French index echoed those lows, as it fell the wrong side of 4600.
As it has done for much of the week, the FTSE managed to keep its losses at the lower end of the day’s declines. Not that that meant much – it still translated to a 2% drop, forcing it to a 6 and a half month nadir of 5625.
At the moment there is little hope of the US markets helping ease the pain whatsoever. The Dow Jones is heading for a 430 point slump, dragging it below 27,050 for the first time in a month.
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Written By: Spreadex
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