A galling US open meant Monday’s pessimism turned into panic, knocking the already weak European markets for six.
There’s a lot for the Dow Jones to deal with in the next week or so, and at the moment it doesn’t look ready at all.
First up, hopes of pre-election stimulus seem dead in the water, with time running out and a lack of appetite on both sides to get a deal done this close to the vote. That potentially pushes the issue into the murky waters of the November to January ‘lame duck’ period, which, if Biden wins, could see a meaningful package delayed until the New Year.
You’ve then got the reason why stimulus is such a hot topic. The US just saw its latest record daily rise in covid-19 cases, hitting 81,000 last Friday. The country could well reach 100,000 by the time of the election on Tuesday.
It’s also a huge week for earnings AND data. Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) all report in the coming days, while on Thursday there is the Q3 GDP reading. That should, at least, be a positive, with analysts forecasting growth of 32% at the annualised rate, compared to Q2’s 31.4% contraction.
This barrage of news sent the Dow into a spin, the index tumbling 650 points as it fell below 27.700 for the first time in a month.
The US losses exacerbated the already shaky European indices. The FTSE fared best despite a rocky commodity sector, dropping just 0.6%. In comparison the CAC was down 1.3%, while the DAX, struggling with a 22.5% collapse from software firm SAP, was in crisis mode, shedding 3.3%.
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