Fear of another February fuel sale in Europe – Markets in a minute

European equities at May lows

European stock exchanges depreciate for the third consecutive session, penalized by the increase in the spread of covid-19 in the region and by the restrictive measures that are being imposed in several countries and which further cloud the expectations of economic recovery.

Investors fear that this tightening of restrictions will exacerbate the impact of the pandemic on economic activity and that the black February will be repeated, marked by general imprisonment in several countries, which has paralyzed business and led to a sharp decline in equity markets.

The benchmark for Europe, the Stoxx600, drops 1.97% to 345.61 points, the lowest since May, after the German chancellor proposed to close bars and restaurants from 4 November. In France, President Macron is also studying the possibility of imposing a month’s imprisonment.

In this scenario, riskier assets such as equities are heavily penalized, while safe assets such as the dollar, yen and US debt continue to rise.

S&P 500 futures are down 1.5% and the VIX Index, a measure of the volatility of US equities, rose to its highest level since June.

“We have been warning investors in the past few days, in particular, to reduce their risk positions slightly,” Laura Fitzsimmons, executive director of macro sales at JPMorgan Australia, told Bloomberg TV. “Biden’s chances are starting to diminish a bit and maybe it will continue even more. We all remember how it was four years ago when the markets were very surprised.”

The uncertainty surrounding the elections in the United States, as well as the near-zero hopes of new measures to stimulate the economy by November 3, also contributes to market nervousness.

Here the PSI-20 drops by 0.93% to 3,941.37 points, mainly penalized by BCP and Galp.