Macro fears take hold as US presidential debate, OPEC meeting and Brexit worries all weigh on the market
The ugly European losses continued this Monday, with any post-Fed relief from last week long forgotten.
It’s one of those mornings where investors have woken up with the fear. The fear of a strong Trump performance in the US presidential debate this evening, the fear of more ineptitude from OPEC at their meeting in Algiers later in the weak, the fears of a ‘hard’ Brexit, the fears of further collapse from Deutsche Bank, which has fallen around 6% since the day began.
Each macro-problem has created the kind of negative fog that can be almost impossible to penetrate. Of the major markets it seems that only Brent Crude has been able to break through to the green side of things, with black stuff managing a 1% rise to cross $46.50 per barrel. Yet even this failed to cheer the commodity stocks, one of the many sectors seeing blanket red coverage this morning.
This left the FTSE with a 1% decline (admittedly a tad smaller than earlier in the session), with 1.4-1.5% falls for the DAX and CAC respectively. The tremulous tone of trading meant that the fact the German Ifo business climate reading hit a 2 year high of 109.5 fell on deaf ears, investors choosing to focus purely on the negative side of things instead.
Interestingly despite much of the blame for this morning’s losses being pinned on the Clinton/Trump debate the US futures are faring far better than their European peers. The Dow Jones is only expected to fall 0.4% after the open, though of course that could well increase when the bell rings on Wall Street. Data-wise there isn’t much on offer, though news of a fall in US new home sales (analysts expected a drop from 654k to 598k month-on-month) likely won’t help the atmosphere this afternoon.