Stock-markets in the UK and Europe were sharply lower last week.
- Surging coronavirus case, the lack of progress on a Brexit trade deal and fears of a contested close result in the US election this coming week all weighed on sentiment.
- In Europe, the ECB signaled more monetary stimulus might be delivered as soon as December after President Christine Lagarde warned that risks to the bloc’s economic outlook were “clearly” tilted to the downside.
- On Saturday, England became the latest country to have nationwide lockdown restrictions imposed by its government. These begin on Thursday.
- Our Breadth Indicator turned negative but our Momentum Indicator, although still negative, ticked up.
The US stock-market was lower this week with third quarter earnings season well underway.
- US stocks saw their worst week since March last week as rising global coronavirus cases, lackluster earnings and election nerves weighed heavily on sentiment.
- Stocks got off to a bad start early in the week after an interview on CNN on the previous Sunday, in which White House chief of staff Mark Meadows argued that the pandemic could not be controlled and suggested the administration would focus on vaccines and therapeutics.
- Investors are also concerned about the election outcome on Tuesday and any potential dispute which may arise following the result that could delay a new coronavirus stimulus bill being passed. Joe Biden leads the polls and early voting has hit record levels.
- Sentiment was helped towards the end of the week following the release of a report from the Commerce Department which showed a stronger than expected rebound by the U.S. economy in the third quarter.
- Our Breadth Indicator turned negative this week and our Momentum Indicator, although still positive, ticked down again.
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