Spreadex | Oct 26, 2020 09:36
At the start of the final week of October, and the last week before the US election, the markets couldn’t shake their covid-19 blues.
Restrictions are continuing to tighten around the world, especially in Europe, where Spain just entered a state of emergency, and Italy has introduced its most severe measures since the end of its national lockdown in May. And the pace of the virus is showing no signs of slowing down, with a new record number of daily cases in the US, and confirmation of 137 local cases in China.
Monday’s lack of optimism extends to the US stimulus talks, with an agreement still not in place and the Republicans and Democrats both pointing fingers. Time is fast running out, if it hasn’t already – why would either side want to get a deal done, especially blue wave-praying Democrats, when the country’s political landscape could’ve completely shifted in a week and a half’s time?
On a less familiar note, a ‘permanent’ ceasefire between warring factions in Libya has sent oil lower, after speculation that production of the black stuff will start to ramp up in the country once more.
The worse hit index this Monday was the DAX, which not only was dealing with the macro-pessimism, but also a 17% collapse from software firm SAP, which missed Q3 estimates and deferred long-term targets in an early-than-expected earnings update. This left the German bourse down 2.2%, or 275 points, and at its worst price since the start of August.
Looking ahead and the Dow Jones might make things much worse in Europe. The futures have the US index opening at a 300 point low, leaving it perilously close to falling below 28,000.
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