Facing covid-19 vaccine delays, election anxiety and a stuffed Q3 earnings season, the Dow Jones joined its European peers in the red on Tuesday.
The Dow didn’t, however, match the pace of decline seen elsewhere, slipping only 0.35%. Nevertheless the index found itself the wrong side of 28,750, stalling in its journey towards the levels seen back at the start of September and, beyond that, February’s all-time highs.
There is a growing feeling among analysts that a blue wave come November is arguably the best outcome for the markets, given the sizeable stimulus package Joe Biden and the Democrats are likely to push through with a clean win. It remains to be seen, however, how much polling is going to have an impact on the Dow in the next few weeks, at least until the election becomes unavoidable at the start of next month.
The worst hit of the major indices was the DAX, which lost 1.1%, or 150 points, as it slumped below 13,000. The CAC was then down 0.75% to 4,940, with the Spanish IBEX and Italian FTSE MIB dropping 1% apiece.
After a rise in the UK’s unemployment rate, the FTSE 100 fell 0.7%, returning to the sub-6000 levels seen before last Thursday’s sharp rebound. The FTSE 250 was also down 1.1%, with the pound making it a clear sweep of bad showings for the UK as it dropped 0.7% against the dollar and 0.1% against the euro.
Alongside covid-19 worries and the vested interest all investors have in the US election, the UK also has Brexit to contend with, and Thursday’s deal ‘deadline’. It appears that the big question is less whether an agreement will be reached by the 15th and more whether that Johnson-imposed end date will be strictly enforced.
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