The stock market at a crossroads

By | May 20, 2020
The stock market at a crossroads

Today, the stock market began with uncertainty. Investors in Europe, the US, and Asia were not able to determine the general dynamics of development, which only added to their thoughts.

Indices of the Western European countries could not demonstrate the same vector of movement. They slightly changed their positions and trading went in different directions. The main news that the participants supposed was the possible receipt of a vaccine against coronavirus. However, investors reacted restrainedly and skeptically in this matter.

The Stoxx Europe 600 index climbed 0.15% on Wednesday morning to reach 339.99 points.

The UK FTSE index also rose slightly by 0.04%, the same with the German DAX indicator by 0.03%. CAC from France, by contrast, declined by 0.26%, and indicators from Italy and Spain followed. The first FTSE MIB lost 0.55%, and the second IBEX 35 lost by – 0.16%.

The positive that the global stock market showed at the beginning of this week seems to have come to an end. The large medical publication Stat added fuel to the fire, casting doubt on the fact that Moderna was indeed able to develop an effective vaccine against COVID-19. The reason for doubt was the insufficient amount of reliable and high-quality information that allows us to draw conclusions about the real results of the research.

Eurozone statistics, which arrived this morning, reflected a decline in inflation in the UK over the past month. The slowdown was a record and went down to the minimum level that was recorded four years ago.

Consumer prices, however, increased in April by 0.8% in annual terms, reflecting the lowest pace. Thus, analysts estimate that inflation has become 1.5% slower than it was in March. Experts, on the contrary, argued in their forecasts that the growth rate of consumer prices should weaken by 0.9%.

Producer prices fell by 0.7% last month. Recall that in March, they recorded an increase of 0.3%. Thus, it should be noted that the decline in this sector has become the most serious over the past few years. Again, the forecasts of analysts who claimed that the reduction did not exceed the 0.4% mark did not materialize.

Securities of Marks & Spencer Group Plc increased their value by 4.9%, this is due to the release of the next batch of company statistics, which for investors seemed very successful.

Experian shares also climbed 6.1%, despite negative forecasts.

Shares of a major engineering holding Rolls-Royce, in contrast, are becoming cheaper with a decrease of about 2.7%. A possible reason is the announcement of large-scale layoffs that should occur in the enterprise.

Stock indices of the United States of America ended yesterday’s trading session with a negative. On average, the decline was in the range from 0.5% to 1.6%.

US stock exchanges did not continue the significant growth that was observed a day earlier. Market participants reacted differently to the proposed situation, which was reflected in their mixed and multidirectional mood. In general, it can be noted that investors still prefer to take a break for thought.

There are many reasons for doubt in the market. So, news of a potential vaccine against coronavirus is also putting pressure on the US market. However, even greater excitement is caused by the speech of the head of the US Federal Reserve Service, Jerome Powell, who made a call to promote economic recovery in all possible ways. Among other things, this may mean the introduction of another portion of incentive measures.

The Dow Jones Industrial Average index fell 1.59% to reach 24,206.86 points. The S&P 500 index also fell 1.05%, its current level is now at 2822.94 points. The Nasdaq Composite index fell by 0.54% and was fixed at 9185.10 points.

Kohl’s shares were down to 7.7%, while Facebook, by contrast, increased the value of its securities by 1.7%.

Stock indices in the Asia-Pacific region are also mixed today. There was even a slight pullback after yesterday’s trading session.

They also analyzed data on the coronavirus vaccine, however, this was not the only point of pressure on market participants. The news that investors were playing out was that the Central Bank of China did not make changes not only to the annual but also to the five-year refinancing rate. They remained at 3.85% and 4.65%.

The Shanghai Composite Index fell by 0.45%, while the Shenzhen Component Index fell by 0.37%. The growth of tension between the two economically active powers China and the United States exerted pressure on the market.

Hong Kong’s Hang Seng Index was down by 0.12%, while Japan’s Nikkei 225 Index was up by 0.96%.

South Korea’s Kospi index also rose slightly by 0.21%. And although insignificant, growth was also recorded in the ASX 200 index, which increased by 0.06%.