After a somewhat sore day of trading, global equities were shown mercy with a (very) partial recovery towards the end of the Tuesday session.
After being forecast to drop over 200 points, the Dow Jones dipped and then regained ground, down 140 points to 26,147. In the meantime, the S&P 500 and Nasdaq played the part of the odd ones out, up by 0.099% and 0.80% respectively – with the Nasdaq having hit its second record high within a week, on Monday.
The story was more bleak in the Eurozone, however, with the CAC down 0.89% to 5,036 points, and the DAX dropping 1.06% to 12,599. It was the FTSE, though, that led the dip, with hoteliers such as Whitbread (LON:WTB) giving tentative trading updates. The index dropped over 1.6%, before recovering to a drop of 1.48%, at 6,193 points. This is far off the UK index’s happy zone, which is somewhere above 6,350 points, and follows a month which began with it touching 6,500.
While the losses in the UK and the Eurozone are somewhat deserved – with not only fears of regional lockdowns being implemented more widely, but also stark EC economic predictions – US indices seemed to ignore the worst of the bad news with far more modest declines.
Speaking on the global equities turnaround from the Chinese rally on Monday, and the prospect of a second wave of lockdowns, Spreadex Financial Analyst Connor Campbell commented:
“A second round of fresh 5-year highs for the Chinese stock market failed to produce the same boost it did on Monday, with the threat of returning lockdown measures in various spots around the globe casting doubt on Europe’s recent rally.”
“Melbourne has been placed under a new 6-week lockdown after a 191 case spike in new cases were confirmed in state of Victoria. Elsewhere South Africa’s total number of cases has passed 200,000, the highest figure in Africa.”
“Of course then there’s the US, the gold standard of coronavirus mismanagement. Between Friday and Sunday alone the country saw 200,000 fresh infections, with the number of cases in Florida alone doubling from 100,000 to 200,000 in less than a fortnight. All this before considering the impact the weekend’s 4th July celebrations will have on the infection rate.”
For anyone who remembers the old adage of ‘when the US sneezes, the whole world catches a cold’, today’s global equities pessimism seems to be history repeating itself. The only difference is, the US is the sick man making everyone else sick, but now chooses to be ignorant of its own ailment.
