Yesterday was a very bad day for the main stock indicators of the United States of America. There was a decline in all directions and it turned out to be quite significant. The rate of increase that was planned for Tuesday evening and Wednesday morning has been completely lost since the second half of yesterday. There are new factors of pressure on the stock market which have become much more powerful than all the positive aspects. In particular, significant disagreements have risen among the US authorities on the issue of introducing additional incentives to the country's economy that can accelerate its recovery. Moreover, there are concerns about the possibility of a second wave of coronavirus pandemic because new cases of infection are becoming more common in European countries, some of which have already begun to introduce repeated quarantine measures, as well as in the United States of America, such as Texas, Wisconsin, Colorado, Oklahoma, etc. Investors react anxiously to this news, since the second wave of the disease will obviously not lead to anything good. And of course, against this background, the main indicators of the exchange began to move down again.
The Dow Jones Industrial Average went down to 1.92% or 525.05 points, at the end of yesterday's trading it moved to 26,763. 13 points.
The Standard & poor's 500 index fell further down to 2.37% or 78.65 points. Its current level stopped at 3,236. 92 points.
The Nasdaq Composite index was the leader of the fall, it parted with 3.02% or 330.65 points, which sent it to the area of 10632.99 points.
The upcoming US presidential election is another very important moment for the stock market in America and around the world. Moreover, the press is beginning to make statements about possible fraud in determining the winner, which suggests that the losing party is challenging the results of the vote count. This will mainly lead to a long period of uncertainty, which can have a fatal impact on stock markets. Market participants will not be happy about this outcome because it will bring them losses.
In addition, the conflict between Washington and Beijing over trade relations still cannot move to the settlement stage. It is being escalated from time to time, which also makes investors quite seriously nervous.
The issue of new incentive measures is one of the most painful for market participants. The authorities are still unable to decide on any actions and there are always disagreements between the opposing ruling camps, which cannot be overcome yet. Nevertheless, the head of the Federal reserve firmly believes that without another package of stimulus measures, it will be very difficult for the US economy to get out of the crisis caused by the COVID-19 pandemic. The state's economy cannot move forward yet and only additional fiscal incentives will help to make the recovery more dense and sustainable.
New statistics on America's economic growth were released yesterday. In particular, the composite purchasing managers index for the first month of autumn season has already became lower and reached 54.4 points. Recall that its previous value was located at the level of 54.6 points.
The PMI in the industrial sector currently increased to 53.5 points, while earlier it occupied the position of 53.1 points. So far, this value remains the highest in the last year and a half.
On the contrary, the PMI in the service sector showed a negative trend as it fell to 54.6 points, although it previously held the position of 55 points.
The stock markets of the Asia-Pacific region are also experiencing a decrease in the main stock market indicators. The indices followed the negative dynamics of their American counterparts and also went down after a slight strengthening that occurred a day earlier.
Investors are very unhappy with the fact that the US government cannot agree on new stimulus measures. They are very confident that these measures will not be taken at all.
Furthermore, the level of coronavirus infection in the world is getting higher every day, which also forces market participants to prepare for the second wave of the pandemic.
Japan's Nikkei 225 index went down to 1.13% this morning.
China's Shanghai Composite index sank to 1.5%. Hong Kong's Hang Seng index compounded the negative trend, losing at 1.78%.
South Korea's Kospi index declined more than the rest, with losses of 2.35%.
Australia's S&P/ASX 200 index went down to 0.81%. As it became known, the country's authorities decided to change the previous strategy of economic development, which aimed to achieve a budget surplus. Now the government will throw all its efforts to reduce the unemployment rate in the state to below 6%. The measures that were taken earlier were found to be ineffective in dealing with the crisis that arose against the background of the coronavirus pandemic. The new strategy will be included in the draft budget, which is being prepared for release in early October this year.
There is a positive mood on the European stock exchanges, which was provided by the release of a new batch of statistical data on the region's PMI level.
The General index of large enterprises in the European region Stoxx Europe 600 increased up to 0.55% and moved to the area of 359.53 points.
The UK FTSE 100 index increased up to 1.2%. Germany's DAX index rose up to 0.39%. France's CAC 40 index went up to 0.62%. Italy's FTSE MIB index gained 0.18%. Spain's IBEX 35 index slightly rose up to 0.08%.
The overall purchasing manager's index of the Euro zone for the first month of autumn became lower and marked at 50.1 points, while earlier it was in the range of 51.9 points based on the latest data.
The PMI in the service sector for the current month was also in the red as it went down to the level of 47.6 points from the previous value of 50.5 points.
On the contrary, the PMI in the manufacturing sector went up to 53.7 points, although it was previously within 51.7 points.
