Cheery morning after the US finally agreed on a $2trln+ phase 3 stimulus bill overnight. Worth mentioning that this comes after a 94% up day in the US (with the Dow closing up +11% – best day since 1930s) and a 92% up day in Europe (with the FTSE having its second best day ever). Asia closed in the green this morning and although European equities ticked higher at the open they have now turned to trade sideways after edging lower. Volumes have dried up a little bit in comparison to this morning’s but somehow encouragingly we are still seeing mostly all indices trading above their 1day and 20day AVAT (except for the CAC and thee IBEX, which are trading -15% and -20% below their 20day AVAT).  

Classic turnaround Tuesday as investors digest the latest stimulus measures and positive news from China (suggesting that Wuhan’s lockdown could end soon). Asian equities bounced this morning and European stocks followed the trend. Volumes remain low though but at least it is encouraging to see European indices holding up above last week’s lows. Over the pond, the Senate’s $2 trillion bill was again delayed overnight. Nancy Pelosi announced a new package so hopefully they manage to agree on one later today.

Quiet start of the week as lockdowns continued to expand over the weekend and the US failed to agree on the virus rescue plan last night. The S&P broke the 2346 support from Dec 2018 after we went home Friday and although futures were pointing down the whole morning, they bounced (on the back of the Fed’s comments) and are trading up +2.6%. Here in Europe, key supports remain 15000 on the FTSE MIB and 5000/4900 for the FTSE 100. Volumes are lower across the path as we are seeing all indices trading well below their 1d, 5d and 20d turnover AVATs.

Encouraging Friday after an exhausting week! More positive stimulus updates, VIX back below 70, volumes up across the board (although fair given is options expiry) but most importantly, EU equities have bounced since the open and managed to recover all of the losses made in the past 5 days. Hopefully all of the expiries run smoothly to ensure a strong close. Sector wise things have turned and we are seeing Travel & Leisure stocks outperforming more defensive sectors such as Healthcare and Food & Beverage (which btw have both turned to trade in the red).

So today we have quieter volumes, stimulus updates and plenty of support levels to keep an eye on. The ECB announced 750bn euros of purchases until the end of the year (and left the door open for more) and the Fed announced another programme overnight. European equities tried to celebrate the news at the open but sadly the gains faded throughout the morning.

Stimulus from Governments and Central Banks remain in the spotlight but the reality is that we all know that they will support the economy. The Fed opened an emergency lending facility for primary dealers overnight and Mr. Sunak announced an extra £20bn of new spending (on top of £7bn in the Budget) yesterday afternoon.

It was the biggest move in the US since 1987!

The Trump pivot roiled markets and sparked the biggest sell off since 1987 overnight and that has rippled through to Europe today. We couldn’t understand why futures were indicating up and sure enough there was again no conviction (or volume) to the early rally and we’re having another down day. Lots of value as always from our charts team below with levels that are very much worth being aware of.

Another week but more of the same as fear and uncertainty once again dominates. The Central Banks’ job is to step in when that happens and step in they did. The Fed cutting its main rate to 0-0.25% and confirmed $700Bn worth of QE (U$500bn of Treasuries; U$200bn of agency MBS). They also announced “co-ordinated action with other central banks to provide U$ swap lines” and took measures to ensure the supply of credit for US businesses and households. The measures are good (I guess any help counts!) but we continue to believe that more targeted measures are needed – click here to read our latest strategy piece on this topic.  The RBNZ cut rates to 0.25% (from 1%), the PBOC injected more cash to the banking system and the BOK cut its rate to 0075% (from 1.25%). The BOJ announced much more targeted measures, which is what other parties should be doing. Keep your eyes on this space as we expect to hear more noise as the day progresses.

Well that was a hell of a week! After yesterday’s records falls, today sees the fightback with the STOXX600 up over 7%, the biggest move since Nov 2008! We walked in to short selling bans in (Italy, Spain, S Korea, Germany contemplating), more stimulus headline, various governments offering pretty much unlimited billions to fight coronavirus. Flow wise, we are better buyers overall (with only few sell tickets on the pad) so let’s see if the trend continues throughout the day, especially when the US comes into action.

The freefall continues and unfortunately there doesn’t seem to be any catalyst to stop it anytime soon. President Trump decided to ban any travel from Europe to the US overnight (which has hit airlines since the open), the WHO declared the virus a global pandemic and Italy’s lockdown has broadened to closing all stores. Volumes remain higher on down days than up days too – not a good sign.