Wednesday October 28, 2020
Wall Street is starting to slide again. This is due to the increasing number of infections in the USA and the associated restrictions on public life. The current reporting season is taking a back seat in view of the Corona crisis.
An impending setback for the economy is driving investors out of the US stock market. Of the Dow-Jones-Index lost 3.4 percent to 26,521 points that S&P-500 fell by 3.5 percent to 3,271.15 points. The technology-heavy one Nasdaq dropped 3.7 percent to 11,004.87 points. In Europe, the Dax fell by 4.2 percent and the EuroStoxx50 by 3.5 percent due to speculation on new lockdowns.
“Regardless of whether you call it a sequel or a new wave – the coronavirus pandemic is the biggest worrying factor right now,” said Art Hogan, chief investment strategist at asset manager National Securities. “Until we get past them, it’s hard for investors to imagine better economic times.”
At the same time, around a week before the US presidential election, there are no signs of a new stimulus package, said investment strategist Michael Hewson from brokerage firm CMC Markets. He does not expect additional help until the end of the first quarter of 2021 at the earliest. The polls are causing uncertainty anyway, although surveys have indicated a victory for Democratic challenger Joe Biden over incumbent Donald Trump, said Naeem Aslam, chief market analyst at brokerage house AvaTrade. “Investors have learned from their mistakes and don’t rely on surveys because they are unreliable.”
The fear barometer continues to rise
Against this background, the volatility index Vix, which measures the nervousness of investors, rose temporarily to a four-and-a-half-month high of 40.52 points. At the same time, investors fled to “safe havens” like US bonds. The world’s leading currency was also in demand. The dollar gained 0.6 percent. In times of crisis, investors would continue to prefer the greenback to other currencies, it said. The very firm one Dollar made gold more expensive for investors outside the dollar area, and consequently the price of the troy ounce fell 1.5 percent to $ 1,876. Oil prices slipped even more: The price for a Barrel of US light oil the WTI variety dropped 5.1 percent to $ 37.32, while the European reference oil of the Brent variety was 5.5 percent lower at $ 39.09.
The fear of a further tightening of the pandemic restrictions hit the leisure and tourism values particularly hard. Casino operator papers such as Wynn, Airlines like American Airlines or cruise operators like Carnival around up to 10.6 percent one. Also came under selling pressure Boeing. The aircraft manufacturer is posting losses for the fourth quarter in a row after a slump in sales. The numbers are largely in line with expectations, but the Airbus rival still has a long way to go, commented analyst Cai von Rumohr of asset manager Cowen. Boeing papers became cheaper by 4.5 percent.
The shares of General Electric (GE), however, rose 5.4 percent after the Siemens competitor presented encouraging quarterly results. The analysts of the research house Gordon Haskett rated the numbers as further evidence that the conglomerate has bottomed out.