While it didn’t fall at the pace of its European peers – yet, anyway – the Dow Jones nevertheless had a stinker of a start on Wednesday.
Dropping 500 points, the Dow found itself slipping under 25700, reversing the gains managed after Tuesday’s European flash PMI and US-China trade reassurances boost.
Speaking of trade, one of the reasons investors are quite so distressed is that Bloomberg has reported the US is preparing to slap tariffs on $3.1 billion worth of goods from the UK, Spain, France and Germany, as it gears up for a summer showdown with the European Union.
Add onto that the already high-intensity panic over the increasing likelihood of a second wave – with outbreaks in Beijing and Tokyo, a worrying R rate in Germany, and an alarming surge in hospitalisations in the United States – and the markets were a mess.
Only worsening as the day went on, the FTSE sank 2.6%, plunging back to 6160. The CAC suffered its own 2.4% fall, with the DAX leading the pack with a 2.8% dive below 12200.
Given the two major issues troubling investors, any kind of rebuttal from Washington regarding the US-Europe trade situation could be a life saver. Because, let’s be honest, any good news on the second wave front looks pretty impossible at the moment.
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