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President Emmanuel Macron’s announcement of a new national confinement in France, half an hour before the Wall Street close, confirmed the worst fears of Wednesday’s session, in red since its opening. Major Wall Street Indices plunged about 3%, the lowest levels since late September, amid rising coronavirus cases in the US and Europe, with an overwhelming pandemic pushing hopes for a global recovery fast. The redhead who announced the opening of the stock market this morning was felt as a shockwave in European stocks. Wall Street closed on Tuesday with no clear direction in a troubled market also due to the November 3 US election.
The Dow Jones, with all of its values in the red except for travel companies, fell 2.8%, to below 26,650 points. The S&P fell 3%, compromising 3,290 points, and the Nasdaq lost 3.1%, down from 11,100 points. The values of hotel companies, airlines and other companies directly affected by the movement restrictions imposed to stop COVID-19 – Germany announced Wednesday the closure of restaurants and bars for a month – are the most shaken by uncertainty. Wynn Resorts, which operates luxury hotels and casinos, recorded a 3.6% drop just before closing and airlines in the S&P index of 4%. Energy stocks also lost around 3% out of fear of falling demand, while the dollar appreciated as a safe haven, putting pressure on gold and crude oil.
Not even the big tech companies – Apple, Alphabet, Amazon and Facebook – were able to save themselves from the collapse, which fell between 3% and 4.7%, dragging the S&P 500 index down. Microsoft lost 4%. earned so far this year, thanks to teleworking and teaching on line, a 35%.
The increase in infections and hospitalizations due to covid-19 especially in the Midwest of the United States, with 12 states posting record income this Tuesday, as well as the fear of the new confinement finally announced in France and the tightening of measures in Germany , curbed investors’ appetite as the stock market fear indicator hit its highest level since July 15. The possibility of a long vote count after next Tuesday’s election also adds another factor of uncertainty to the equation.
In addition to the out-of-control pandemic, the failure to reach agreement in a new round of negotiations to pass further fiscal stimulus in the U.S. ahead of next week’s elections clouded all of the Dow’s gains in October and pushed the Index index. benchmark S&P 500 at lows not seen in the past four weeks.
Donald Trump promised “the best possible program” of economic aid this Tuesday, but only after the elections were held, accusing Democrat Nancy Pelosi, Speaker of the House of Representatives, of not negotiating in good faith. Talks have stalled on the size of this new aid package, which would be the second since the largest stimulus program was approved in the spring, worth close to three trillion dollars since then. New business since the 1930s with which the United States government fought the Great Depression.
“There seems to be no will [política] reach a new budget recovery plan by the end of the first quarter of next year ”, says analyst Michael Hewson, of CMC Markets, quoted by the France Presse agency.
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