After days of election and vaccine celebrations, investors suffered a comedown, causing the European markets hit a wall on Thursday.
The FTSE was among those worst hit, a 1.3% – or 80 point – drop sending it back to 6,320; this despite sterling falling 0.2% against the dollar and 0.3% against the euro.
Though the FTSE’s losses echo those seen in the Eurozone, with the DAX and CAC slipping 1% and 0.8% respectively, the UK index came in for heavier fire due to the latest UK GDP reading.
For the third quarter the country rebounded by 15.5%, missing estimates that had run as high as 17%. Ominously that growth was stacked across July and August; in September GDP rose by just 1.1%, placing the country on the wrong trajectory heading into what is going to be a rough Q4.
Those figures also provided another embarrassment for the government – plagued with in-fighting just as the latest, and potentially final, Brexit talks reach their crescendo – placing the UK at the bottom of the GDP table when it comes to major European economies.
With the tone set by Europe, the Dow Jones is facing a 170 point drop when it opens this afternoon, one that would leave it in danger of falling back below 29,200.
Again, because this is in-line with the losses seen elsewhere, it is still hard to ascertain how much investors are worried about Donald Trump’s attempts to undermine and overturn the result of the election. His team is showing no signs of conceding, no signs of slowing down their legal heckling – if it persists, it may become a more pronounced concern for the markets.
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