Another day of earnings which were broadly better than expected, macro data that was again horrendous and Covid 19 headlines which in the last 24 hours have been negative. The last two points outweighing earnings so far today as Europe followed the late wobble in the US to trade negatively from the beginning. Worries of how lockdown is going to look and whether some countries are moving too quickly definitely dominating right now.

European equities have stalled within the +/- 1% range for some days now. Volumes have been pretty mixed throughout the trading session although it is worth pointing out some individual stocks. VOD LN (trading +80% above its 30d AVAT – on numbers), MT NA (+400% vs 30d – on share sale) and CTEC LN (+160% vs 30d – on the GIC placing). Feels like fears over a second wave are starting to weigh slightly so all we can do is wait for further news to confirm anything on that front.  

Feels like we are getting used to “the new normal” where countries report fewer cases each day and very slowly relax quarantine restrictions (in the case of London, often with a lag to what people are already doing). Boris Johnson announced last night a new message being “stay alert” as opposed to “stay at home”. There has been some confusion about the purposefully vague messaging, but what’s clear is that changes will be cautiously gradual. EU equities tried to stay in the green at the open but lost all of the early gains pretty quickly (with airlines leading the way down). Volumes are slightly higher today but overall they remain poor.

After three days of no major moves across markets (note the S&P moved less than 1% in the past 3 days – first time since Feb’s peak), the storyline hasn’t changed much today. Countries continue to announce their plans to open their economies and investors are taking a break while they digest results and recent economic data. We saw a pickup in volumes on the FTSE 100 and the IBEX this morning but overall they remain poor.

EU equities have been trading quite mixed since the open as we are seeing half of the sectors and nearly all indices trading in the red. Volumes remain low and as our charts team highlighted this morning, it is quite disappointing seeing some indices stalled at their 2018 lows of their respective resistance levels. In the US, the Nasdaq 100 is testing the 9000 resistance once again and here in Europe, the FTSEMIB is stuck at the 2018 low of 17914.

Although European equities have been trading up since the open (as lockdown measures continue to ease), we should consider that it has been a quieter day overall. We are seeing lower volumes across the board and EU indices are back trading below their AVATs. Maybe a sign of exhaustion? Seems like investors are lacking a bit of conviction at the moment and are waiting for more progress in the lockdowns easing and/or a vaccine development.

After the long weekend in Europe, EU equities aligned with Friday’s losses and tumbled at the open. The S&P was down (-2.8%) on a Friday for the first time in 4 weeks and the FTSE was down -2.3% (currently -0.2%). Today, all EU indices are down at least -3% and volumes are pretty mixed across the board. All indices are trading above their 20d AVAT except for the FTSE 100 and the IBEX (both trading -6% and -23% below their 20d respectively).

Volumes continue to build up as we progress through the week. Participation spiked across the board as we are seeing all EU indices trading well above their AVATs. The news from Gilead yesterday has certainly given investors something to cheer about, however the negative GDP data today meant EU equities weren’t able stay in the green for long. Eurozone Q1 preliminary GDP contracted -3.8% QoQ and -3.3% YoY. This data only covers 2 weeks of lockdown so we expect Q2 GDP data to be even worse (i.e. -20-30% QoQ). This echoes what we saw across the pond last night with the US also disappointing. On the positive side though, US unemployment data showed signs of improvement as Initial Jobless Claims decreased to 3839k from 4427k previously.

Busy day of earnings accompanied with mixed volumes across the board. We were seeing higher volumes this morning but they have decreased slightly. Encouragingly though, all EU indices are still trading above their 5d and 10d AVATs.

With more and more countries in Europe heading towards the lockdown exit in the (hopefully) not too distant future, the region has generally traded better today.