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Contagion records in the US and Europe over the weekend contributed to a strong entry into the stock market week on Wall Street. At the same time, the fear index jumped.
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Uncertainty has been high in the world’s stock markets at the beginning of the last week before the United States elects a president.
After a sharp slide in Europe, there was not a particularly good mood on Wall Street on Monday night. The broad S&P 500 had its worst trading day since Sept. 23.
This is how the day ended in the leading indices:
- S&P 500 down 1.86 percent
- Nasdaq Composite fell 1.64 percent
- The Dow Jones was down 2.29 percent
The uncertainty in the market also contributed to the infamous Vix fear index taking a solid jump. At the end of the day, the index is up about 19 percent to about 33 points. This is the highest level since the beginning of September.
The Vix Index measures the expected fluctuations in the broad S&P 500 Index over the next 30 days, through option prices. Typically, it will rise dramatically during periods of great turmoil and fear in the stock markets, and will fall during periods of low fluctuations.
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Contagion
The strong start to the week comes after a weekend with a record number of new cases in the United States, according to CNBC. France has also reported record cases over the weekend, while Italy and Spain introduced stricter restrictions.
“There is nothing to be gained by pretending that the pandemic and the financial pain it has caused are over soon,” said chief strategist David Kelly of JPMorgan Asset Management, according to the Financial Times.
At the same time, there is great uncertainty about when US politicians will be able to agree to a new financial crisis package. According to Bloomberg, Democrats Nancy Pelosi and Finance Minister Steven Mnuchin will hold a conversation Monday to clarify whether a deal is possible.
“Fiscal stimulus doesn’t seem to be coming as quickly as we think, and the virus is coming back faster than we had imagined,” Global Investments portfolio manager Keith Buchanan told Bloomberg.
– Putting these two together is a reality check of the market, continues Buchanan.
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Week full of content
The US presidential election is set to hit the markets over the next week, but it is far from the only thing that can create movement in the markets.
Hundreds of US companies will present results in the coming days. On Tuesday, Microsoft will be pleased to kick off the big tech giants when the company presents its third-quarter figures.
But they are far from alone. On Thursday, Apple, Facebook, Amazon, Alphabet, Twitter and Spotify will present figures.
Oil giant ExxonMobil, payment intermediaries Visa and MasterCard, as well as several major pharmaceutical companies will also present results during the week.
To make matters worse, top figures from Facebook, Twitter and Alphabet are due to appear in the Senate on Wednesday to testify in a case where concerns are about privacy and media dominance.
