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Stricter COVID rules send stocks tumbling

MARKETS
Wall Street ends well off lows in wild trading
The US equity benchmarks fell for a third day but by much narrower margins than mid-day losses would have implied. The Dow was down by over 300 points but bounced back to close just 20 points lower. Facebook led tech stocks lower amid fears of increased regulatory scrutiny after the site blocked a New York Post article and as the European Union prepares plans to curb their influence in Europe. Better than expected results from Morgan Stanley helped bank stocks finish mostly higher, partially offsetting losses in tech.

European stocks nosedive after new virus restrictions implemented
The floodgates finally bust open in Europe after days of rising virus cases brought about tighter virus restrictions. The killer blow was the state of emergency in France and tough new measures in London. President Emanuel Macron made the move in France after hospitalisations jumped over 9,100.

The British government is under pressure to follow scientific advice for a 2-week circuit breaker national lockdown but has so far resisted, but has raised the capital to the Level 2 tier of restrictions. That means two different families can no longer mix indoors- be that in their home or in a pub or restaurant. There is still no sign of the joint European recovery fund so in the meantime economies stand to take the hit – risking a double dip recession – from the new restrictions.

Loser: Airlines
With COVID-19 more front and centre than ever – quite simply the winners are online and losers offline. Budget Irish airline Ryanair said it would operate at 40% of its typical winter capacity, pulling most airlines lower. Shockingly later in the day – United Airlines boss said he didn’t expect business travel to full comeback until 2024. Business travel is the bread and butter of most big airlines outside of budget travel. United posted a $1.8 billion loss for the third quarter sending shares lower by 3.8%.

Winner: AO World
Shares of AO World – the online seller of home appliances surged 30% after the firm reported a 57% spike in the six months through September. People still need to upgrade the essential appliances they use every day, the difference being that they couldn’t always get to the physical shop to get it. Sales jumped 54% in the UK while the rose 83% in Germany. The company commented that “We believe we have seen a lasting step change in online penetration.” The Pandemic has shifted old perceptions that some things are unsuited to online delivery – for example heavy items like appliances.

EUR/USD back to 1.16 handle
A worsening economic outlook under the weight of the new virus restrictions – as well as the prospect of more monetary stimulus – weighed on the euro. EUR/USD dropped below 1.17 as investors looked to the dollar for safety. The dollar was in favour as a haven with investors increasingly realising the door is shutting on a pre-election stimulus deal. Gains in the dollar accelerated after data showed a rise in weekly jobless claims – symbolising a slowing of the US labour market recovery.

DAY AHEAD
IMF Meeting
European Council meeting continues
Eurozone CPI (Sep)
US Retail Sales (Sep)
US industrial production (Sep)
Bank of NY Mellon Q3 earnings

23-10-2020

Bitcoin above 13k, Barclays Q3 results & flash PMIs
The day ahead will see the reaction to the second and final US presidential debate as well as the release of October PMIs and Q3 earnings from British bank Barclays. European stocks look set for cautiously higher open with the idea that the presidential debate… Read more

22-10-2020

Intel is selling off parts before Q3 results
The day ahead will see two US corporate behemoths Intel and Coca-Cola report Q3 results while the lack of US stimulus puts the spotlight on weekly jobless claims. European stocks look set for opening losses on Thursday with indices testing the lowest levels in… Read more

21-10-2020

No pre-earnings delirium for Tesla
The day ahead will see earnings from EV carmaker and retail options trading favourite Tesla and the UK reports inflation stats at a critical stage in EU/UK trade negotiations. This really feels like it's the last-chance saloon for a pre-election US stimulus bi… Read more

20-10-2020

Netflix earnings and stimulus deadline
MARKETSEuropean markets have opened lower following the late losses headed into the close on Wall Street. Stocks in Asia are mostly lower with the exception of China after the PBOC kept the LPR steady. Early optimism gave way to sweeping losses across stock ma… Read more

19-10-2020

48 hours for stimulus, China GDP grows
HEADLINESChina GDP grew 4.9% in the third quarter, slightly missing estimates Stocks are bouncing back from last week’s sell-off on hopes for US stimulus There could be a coronavirus stimulus bill within 48 hours and an emergency-use COVID-19 vaccine by Novemb… Read more

16-10-2020

Stricter COVID rules send stocks tumbling
MARKETSWall Street ends well off lows in wild tradingThe US equity benchmarks fell for a third day but by much narrower margins than mid-day losses would have implied. The Dow was down by over 300 points but bounced back to close just 20 points lower. Facebook… Read more

15-10-2020

US bank stocks getting clobbered
The British pound rallied (GBP>1.30) after the UK signalled it would not walk away from trade talks after today's EU Summit. Big US banks have seen shares turn lower after earnings results. The prospect of future loan losses and low interest rates are keepi… Read more

14-10-2020

Paused vaccine trials hit market optimism
Eli Lilly has put its antibody treatment for the coronavirus on hold after Johnson & Johnson paused its vaccine trials on Monday. The pauses stretch out the timeline for when investors should expect to see a vaccine approved. MARKETSEurope openEuropean mar… Read more