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The US stock exchanges experienced another significant downfall on Tuesday. Nevertheless, the indexes remain far from their minimum marks. The risks for the stock markets are growing, and investors are reconsidering their activities.
The Dow Jones Industrial Average index lost 1.84% or 509.72 points, which moved it to the level of 27147.70 points.
The S&P 500 index parted with 1.16% or 38.41 points. Its current mark has stopped at 3281.06 points. It was the fourth consecutive decline and the longest period of decline in nearly eight months.
The Nasdaq Composite index also went down by 0.13% or 14.43 points, which pushed it to the area of 10778.80 points.
Concerns are now growing amongst market participants.The situation with delays in the adoption of the new US economic stimulus program makes investors wonder whether it will be ratified at all. The US presidential elections adds tension and uncertainty. Another indicator of concern is the conflict between Washington and Beijing, which is only gaining momentum and has no solution yet. As well as the possibility of introducing a new portion of restrictive quarantine measures associated with repeated outbreaks of coronavirus infection in America and other states.
The negotiation process for a new stimulus package in the US is moving very slowly. Congressional representatives have begun issuing a statement about expanding the incentive package for restaurant companies, as well as air carriers, as they suffered more than others during the coronavirus pandemic. Note that the Democrats proposed an incentive budget totaling $3.4 trillion, however, there has been a lot of changes since its proposal in May of this year. Thus, it is no longer considered relevant at present.
Another event that negatively affected the market was the banning of China developed mobile applications Wechat and TikTok in the USA. The response from Beijing was not long in coming. Over the weekend, the Chinese authorities published a new list of foreign companies and individuals who are persona non grata for the country, as they threaten the national security and sovereignty of the state. Thus, the conflict not only does not end, but also gains new momentum.
Meanwhile, new cases of coronavirus infection are continue to be recorded around the globe. The UK authorities have announced the second wave of the pandemic in the country and urged residents to be prepared for the next batch of restrictive quarantine measures. The total number of COVID-19 patients in the US already exceeded the mark of 7.41 million on Monday. The number of cases is also increasing in India, where there are already more than 5.56 million total cases. Brazil also contonues to record news cases and has totalled to 4.56 million. In General, there are about 31.45 million COVID cases worldwide. However, the most dangerous, according to experts, is still ahead, the second wave is unlikely to be avoided. The number of deaths are also growing rapidly, and at present there are about 50,000 cases per week.
All this makes the prospects for investors in the stock markets not too bright, who in the current situation prefer not to take risks and adjust their work.
The Asian stock exchanges also traded in a negative zone on Tuesday. The major stock indexes are reducing their positions following the fall in the US stocks. The threat of the second wave of the pandemic also induces anxiety amongst market participants.
Experts hint that the European region will not be able to avoid new restrictive quarantine measures to counteract coronavirus infection. This, in turn, will be another blow to the economy of the region and the world as a whole. Thus, Asian investors are not showing too much interest in risk right now.
Trading platforms in Japan remain closed due to public holidays in the country.
China's Shanghai Composite Index dropped 0.37%. The Hong Kong HangSeng index split the negative trend and sank 0.57%.
South Korea's Kospi index sank quite deeply by 2.33%.
Australia's S & P / ASX 200 Index lost 0.52%.
Europe stock markets, on the contrary, traded in a green zone. The major stock indexes showed strong growth, which allowed them to compensate for the significant losses that occurred the previous day. On Monday, a notable decline was recorded in European stocks where indices recorded the same losses for three months.
The general index of large enterprises in the European region StoxxEurope 600 rose 0.7% Tuesday morning, which allowed it to move to the level of 359.31 points. Note that it sank 3.2% during Monday's trading.
The German DAX index gained 1.07% and became the leader of the rise. France's CAC 40 Index added 0.42%. The UK FTSE 100 Index is up 0.27%. Italy's FTSE MIB went up 0.95%. Spain's IBEX 35 Index also rose 0.26%.
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