The stock market was set to limit volatile trading weeks with dark notes on both sides of the Atlantic Ocean after wide and bright returns from American tech giants couldn’t impress investors.
European stocks struggled for direction on Friday and fell by the morning. The STOXX 600 index across the region was flat, but Frankfurt’s Xetradax fell 0.2% and London’s FTSE 100 fell 0.3%.
This week, MSCI broad-gauge stocks in developed and emerging markets around the world fell 4.5%. This is the biggest sale since the coronavirus seized the market in March.
Wall Street futures showed a steeper loss. Futures following the technology-intensive Nasdaq 100 Index fell 1.4%, and futures tracking the broader S & P 500 fell 0.8%.
The latest sales continued even after Alphabet, Amazon, Apple and Facebook revealed results that exceeded analysts’ expectations in the third quarter after closing Thursday.
This year, the stock price of a large tech group quartet soared, spurring a nearly 25% rise in the Nasdaq Composite Index despite pandemic pressure. However, stocks in Amazon, Apple and Facebook all fell in pre-market transactions.
Mothers chief economist George Lagarias said the fall in stocks this week was a “common short-term correction” and investors were benefiting from “winning positions” such as Big Tech stocks. ..
The fact that bond prices did not rise significantly could mean that traders have not yet “completely mitigated portfolio risk” and the stock market will recover rapidly after a temporary “risk-off episode.” He added that it indicates that there is.
Deutsche Bank strategist Jim Reed said Big Tech stocks are vulnerable to sharp rises and falls as traders reassess the outlook for the US economy in general, especially in the sector.
The fall in global equities this week is due to investors becoming more and more concerned about the surge in coronavirus cases in Europe and the United States. European Central Bank President Christine Lagarde warned Thursday that risks to the European economy are “clearly declining.”
Expectations for volatility after the US presidential election next week represent yet another headwind facing global investors. Wall Street’s Vix volatility index traded at 39 on Friday, doubling the long-term average.
“As election week approaches, the market is now focusing on what goes wrong,” said Joyce Cheung, JP Morgan’s Global Research Chair, in a memo to Wall Street banking customers. It was. “The market has expected post-election reflation in the global economy by 2021, but there is room for disappointment if the wildcard scenario comes true.”
Bastien Drut, senior strategist at CPR Asset Management, said the outcome of the election was protracted by uncertainty and was “very bad for the stock market.”
“When it comes to volatility, US elections will be more important than pandemics,” he said.