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Markets Err On The Side Of Pessimism In Face Of Second Wave Concerns

Published 22/06/2020, 13:10
Updated 21/10/2020, 09:15

Investors struggled to make up their mind on Monday morning, before deciding to err on the pessimistic side as lunchtime approached.

At points Europe turned green, only for investors to lose confidence in face of the overwhelming number of new covid-19 cases in the US across the weekend.

The FTSE fared best, keeping its losses at a trim 0.3%, leaving it just under 6270. This meant it was well ahead of its Eurozone counterparts; the DAX and CAC fell 0.8% apiece, sending them to 12250 and 4900 respectively.

Travel stocks were among the worst hit, as the emergence of a second wave would put an end to hopes that holidaymakers could start to plan a getaway anytime soon. In the FTSE 100, British Airways-owner IAG (LON:ICAG) was down 5%, with InterContinental Hotels Group slipping 2.5%. TUI (LON:TUIT), meanwhile, fell 4%, alongside a 1% dip from easyJet (LON:EZJ).

As for the Dow Jones, the US index is expected to drop around 70 points after the bell, pushing it under 25800. That’s not actually that bad given the domestic coronavirus situation in the US, as well as the fact the World Health Organisation has reported a record daily increase in global cases, with the biggest increase coming across North and South America (one imagines the United States and Brazil are carrying the bulk of that burden, though things are also increasingly bad in Mexico).

In terms of data, this afternoon’s existing home sales is expected to continue to decline, with a drop from 4.33 million to 4.15 million month-on-month – the lowest reading in almost a decade.

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