It looks like it could be one of those sessions. European markets suffered a sharp fall on Thursday, as the realities of the covid-19 pandemic – something investors are all too keen to look beyond – once again made themselves felt.
The Fed meeting minutes from Wednesday night sort of did a number on the markets, both warning that the pandemic would ‘weight heavily on economic activity, employment, and inflation in the near term’ as well as posing risks to the outlook ‘over the medium term’, while also stating that the FOMC felt new stimulus measures were ‘not warranted in the current environment’.
With hopes dashed of a Fed intervention in the short term, the latest covid-19 headlines carried an extra sting. Germany has just posted its highest number of new cases since April, Croatia may be the next country to be removed from the UK’s travel corridor, Australia’s Qantas airline has warned travel to the US is likely not possible until there is a vaccine, and South Korea is in danger of seeing a return to a nationwide outbreak after recording more than 1500 cases in the last week.
That’s a lot of bad news for investors to deal with, and they reacted as you’d expected. The DAX dropped 1.3%, barely clinging on above 12800, with the CAC slipping 1.2% to 4900. As for the FTSE, it shed 70 or so points, once again sending the index the wrong side of 6050.
At the moment the Dow Jones is set to keep its losses at around 0.4% when it opens this afternoon, leaving it under 27600 for the first time in 10 days. What it actually does at the open, however, may be dependent on whether or not the week’s jobless claims reading comes in above or below 1 million.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."