New wave of covid-19 and bank data leaks cause losses of up to 8% in the markets

In Europe, the United Kingdom is studying a second national lockdown due to the increase in cases by at least 6,000 daily, while Denmark, Greece and Spain introduced new restrictions on the activity. Also, the German Health Minister said that the rise in infections in countries like France, Austria and the Netherlands is worrying.

In this context, the shares of the “old continent” registered their worst fall in three months on Monday. The Frankfurt Stock Exchange fell 4.4%; Milan and Paris fell 3.7%, while Madrid sank 3.4%, as did London. The pan-European STOXX 600 index fell 3.2%, a decline not seen since the beginning of June.

On concerns about new infections, the travel and leisure index collapsed 5.2%, accumulating its worst two-day decline since April, with airlines such as IAG – which owns British Airway – plummeting 12.1%. In addition, Lufthansa plunged 9.5% after further cutting its fleet and workforce due to the coronavirus crisis.

At the same time, European banks fell 5.7% to hover around record lows after a joint report by 108 media outlets warned of a feasible link between entities such as HSBC and Deutsche Bank with astronomical amounts of “dirty money.”

These documents refer to some 2 trillion dollars (1.7 trillion euros) of transactions between 1999 and 2017 originating from drugs and criminal acts, and even from embezzled fortunes in developing countries.

For its part, Wall Street hit lows in almost seven weeks, as concerns about new measures to contain the coronavirus and the inability of the US Congress to reach an agreement on more stimulus measures raised fears about another impact on the local economy.

The Dow Jones Industrial Average lost 2.9% to 26,853.66 units, the S&P 500 Index lost 2.2% to 3,246.10 units and the Nasdaq Composite was down 1.3% to 10,649.21 units. .

The CBOE volatility index of the market (VIX), a measure of investor anxiety, soared to its highest level in nearly two weeks.

All major indices of the S&P 500 were down, with energy leading the declines amid falling prices for Petroleum.

Benchmarks started a downward path three weeks ago as investors dumped tech stocks that had caused the S&P and Nasdaq to hit all-time highs.

Market nervousness was increased by the turmoil generated in the US presidential campaign over the death of Supreme Court Justice Ruth Bader Ginsburg, considered a liberal icon. President Donald Trump said that at the end of this week he will announce his candidate to replace her.

Ginsburg’s death also reduces the chances that Congress will pass another stimulus package to help boost the local economy. “With this new development there is going to be little bandwidth to present a new fiscal project,” said Tom Martin of GLOBALT Investments in Atlanta.

The US Congress has been in a stalemate for months on the size and shape of a fifth coronavirus response bill, above the $ 3 trillion already approved.

Dollar

Faced with uncertainty, the dollar rose after two weeks of declines. “What we are seeing with the dollar is a bet on a safe haven without risk,” said Erik Bregar, head of foreign exchange strategy at the Exchange Bank of Canada in Toronto, adding that the trigger was fear in European morning trading of a new Confinement in the United Kingdom due to the coronavirus.

The dollar index, which compares the greenback with six prominent currencies, was up 0.85% to 93.297 units, while the euro lost 0.9% to $ 1.1734, the yen weakened 0.1 %, to 104.70 units per dollar, and the pound sterling lost 0.9%, to 1.2797 dollars.

Metals

Gold and the rest of the metals suffered sharp declines, affected by an appreciation of the dollar, in a week in which investors will be watching the speeches of the Federal Reserve authorities in search of clues on more stimulus measures to revive a economy hit by coronavirus.

Gold lost 2.1% to $ 1,909.05 an ounce, after hitting its lowest value since Aug. 12 earlier. Prices fell almost 10% from an all-time high reached at the beginning of last month, due to a drop in hopes for new stimuli.

“Gold should be trading higher with safe haven demand, but it’s kind of a repeat as in the spring when the market sell-off, participants have been selling assets across the board,” said Bob Haberkorn, strategist Market Senior at RJO Futures

More strongly, spot silver collapsed 8.3% to $ 24.53, its lowest level in more than a month.

Petroleum

Oil prices fell sharply due to the return of Libyan exports and the fear of a new confinement due to the outbreaks of coronavirus, which would be disastrous for demand.

WTI’s barrel for October delivery lost 4.4% compared to the close on Friday and closed at $ 39.31. For its part, that of Brent from the North Sea for delivery in November fell 4% in London and ended the day at US $ 41.44.

The Libyan National Oil Company (NOC) announced on Saturday the resumption of crude oil production and exports in Libya at the “safe” sites.

This news comes the day after the Marshal who controls the east of the country, Khalifa Haftar, announced the lifting, under conditions, of the eight-month blockade imposed by his forces.

Grain

The futures of soybeans, wheat and corn also operated with losses in the Chicago Market, after the rallies of last week, which brought the prices of grains to the highest levels in recent months and even the last years

The falls of the day reflect sales of investment funds, although the losses are limited because “the hope persists that the demand of the main world importer, China, will continue,” said the Rosario Stock Exchange.

Soybean contracts are signed with a decline of 1.7%. The value of corn, for its part, registers losses of 2.5%. In turn, wheat contracts show a decline of 4.1%.

Argentine assets

In the midst of this panorama, the S&P Merval index falls 2.86% and stands at 40,297.36 units, while the country risk advances 8% to 1,359 basis points, after the average round of operations in the local market.

In the leading panel of the Buenos Aires stock market, Grupo Financiero Galicia and Aluar recorded losses of 4.23% and 3.82%, respectively; and in the opposite direction, Transener registered a rise of 2.18%.

Meanwhile, the ADRs of Argentine companies registered a majority of falls, in a day in which Tenaris led that lot with a loss of 6.6%.

Regarding fixed income, bonds in dollars operated with drops of up to 3.6%, while securities in pesos fell to 3.7%.

The retail dollar traded after noon at $ 74.64 to buy and $ 79.65 to sell, up five cents from Friday’s close. Meanwhile, in the stock market the dollar counted with liquidation yielded 0.5%, up to $ 136.59 per unit.

For its part, the MEP dollar gained 0.4% to 130.25 pesos, and in the informal market the so-called blue dollar was trading at a rise of one peso, to $ 141 per unit.

Finally, the wholesale dollar was trading at $ 75.59, up 21 cents compared to the last price.

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