Week’s recap October 12-16 2020

This second week of October, starts with a relatively strong rise in the stock market, just as the stock market opens. Although there was this early rise, the markets ended up losing steam by the end of the week, ending with a small depreciation.

This rise, very likely, is fed by the investors’ expectation that the USA’s stimulus materializes before the election. Unfortunately for the hopeful, that chance is starting to look more distant, which caused a slight drop in the stock indexes.

Another reason for this tendency is the continuous rise of COVID-19 cases, both in Europe and in the USA, combined with the fact that two pharma companies paused their testing phases due to possible adverse side effects. The only positive point was made by Pfizer, who asked authorization for the use of their, still in testing, vaccine in emergency situations.

On the European side, we see again the rise of COVID-19 cases forcing countries to enforce more aggressive quarantine measures. For example, mandatory curfew in France, where the biggest question is how long will this be necessary until the number of cases stabilizes at an acceptable level.

Still ongoing in the negotiation between the United Kingdom and Europe, with Boris Johnson warning over a possible no-deal Brexit, even though the chance of that happening is very low.

As for the Asian market, apart from data that show a small economic recovery, we see some worries coming from the BoJ. Where the eventual removal of fiscal stimulus is being debated, and how it might impact volatility and the companies that have come to depend on the volatility.

Visit the  Disclaimer for more information.