Weekly market recap 19.10.20

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U.S.

Indices managed to close in the green for third week in the row, led by industrials and utilities. Financials reacted weekly to bank earnings reports and the small real estate sector was also weak. Dow Jones Industrials rose 0,1% and the S&P 500 0,2%.

Apple shares recorded gains ahead of the company’s unveiling of new iPhones on Tuesday, and Amazon.com shares were also strong in advance of its annual Prime Day, scheduled this year on October 13 and 14. But stocks fell back at midweek as a relief package being passed before the election seemed to be unlikely. Investors also remained concerned about the rising covid-19 cases. Weekly jobless claims rose to 898.000, adding more gloom to market performance.

EU

Stocks in Europe fell as coronavirus infections were on the rise. Investors did not appreaciate the uncertainty around Brexit and the diminishing prospects of U.S. fiscal stimulus before the November 3 US elections. All major indexes lost ground: Germany’s Xetra DAX Index slid 1.09%, Italy’s FTSE MIB dropped 1.05%, and France’s CAC 40 gave up 0.22%. The UK’s FTSE 100 Index declined 1.61%.


European governments imposed stricter targeted measures to contain the spread of the coronavirus and prevent total lockdowns. France, for example, imposed a nighttime curfew in Paris and eight other cities, while Germany began to impose restrictions on socializing in areas worst hit by the virus, such as Berlin. The UK implemented a three-tiered system of localized lockdowns across England and offered business subsidies to the worst-affected areas.

Japan

Japanese stocks retreated for the week. The Nikkei 225 Stock Average fell 0.9%. The large-cap TOPIX Index and the TOPIX Small Index, broader measures of Japanese stock market performance, also recorded losses. The yen strengthened modestly and traded above JPY 105 per U.S. dollar on Friday.

The Japanese government is preparing a third stimulus package to boost consumption. It is expected to include more government subsidies for domestic travel and tax relief for struggling businesses. Japan’s government has already passed two supplementary budgets totaling approximately JPY 57 trillion (USD 540 billion).

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China

Chinese stocks rallied after Golden Week holiday. The benchmark Shanghai Composite Index rose 2.0% and the blue chip CSI 300 Index advanced 2.4%, marking its third positive week in the row. At a monthly press conference, People’s Bank of China (PBOC) officials appeared to show little appetite for cutting interest rates. China’s exports beat market forecasts in September and grew for the fourth month, jumping 9.9% year-on-year.