RISE IN VIRUS CASES DAMPENS VACCINE HOPES FOR GLOBAL MARKETS
In Wall Street, markets seemed to close lower given how the S&P 500 and Dow Jones Industrial Average closed at records in a rally fueled by progress toward a Covid-19 vaccine. The Dow Jones Industrial Average DJIA dropped 167.09 points to close at 29,783.35, the S&P 500 SPX fell 17.38 points to end at 3,609.53 while the Nasdaq Composite Index COMP declined 24.79 points to end at close 11,899.34. One could argue that a lack of progress toward additional economic aid out of Washington could also be hampering a more robust move by markets with reports even showing the weakest retail sales rise in months compared to previous months. Dampen
The stock markets in Europe did not seem to fair any better as well, with the Stoxx Europe 600 Index falling 0.2%. The DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.5%. The drop seen in European market can easily be attributed to the surge in coronavirus cases throughout the region which has gone on to halt the nascent economic recovery even given the Covid-19 vaccine breakthroughs. It is said that an effective coronavirus vaccine will not fundamentally change European Central Bank economic projections, as a medical solution was already factored into forecasts, ECB President Christine Lagarde told a Bloomberg event on Tuesday. The real GDP is projected to fall by 8.0% in 2020, according to the latest ECB staff projections, before rebounding by 5.0% in 2021 and by 3.2% in 2022.
Stocks in Asia were mixed with some modest gains on Wednesday after declines were seen in Wall Street due to worries on the long-term impact of rising covid-19 cases which have obviously tempered excitement of a possible vaccine development. The Nikkei 225 NIK, in Tokyo lost 0.7% while the Shanghai Composite Index SHCOMP, +0.22% gained 0.5%.
In the SSA Eurobond space, the recent surge in prices has seemed to also gather a bit of halt owing to a consistent rise in infection cases around Europe and U.S. literally balancing the hopes from the vaccine news even though oil has also seemed to hold steady so far. Ethiopia still in the background news and continually drifting lower as newsflow remains negative from the region with accounts linked to the Tigray region being frozen by authorities.