European Equities: COVID-19 Jitters Return as Wave 2 Hits Asia…

The Majors

It was a bearish start to the week for the European majors, with the CAC40 falling by 1.31% to lead the way down. The DAX30 and EuroStoxx600 saw more modest losses of 0.73% and 0.40% respectively.

There were no stats to spook the markets on the day, leaving the markets to consider the latest rise in new COVID-19 cases in Asia.

Both China and South Korea reported new clusters, raising concerns over the easing of lockdown measures in Europe. A 2^nd wave of infections across the EU would certainly raise the prospects of a more extended lockdown period…

The Stats

It was a quiet day on the Eurozone economic calendar on Monday. There were no material stats from the Eurozone to provide the majors with direction on the day.

There were also no material stats from the U.S to provide direction later in the day.

The Market Movers

For the DAX: It was a mixed bag for the auto sector on Monday. Continental, Daimler, and Volkswagen fell by 0.41%, 1.28%, and 0.67% respectively. BMW bucked the trend, with a 1.25% gain.

It was a bearish day for the banks. Deutsche Bank slid by 2.08%, with Commerzbank falling by 1.26%.

Deutsche Lufthansa slid by 2.70%, with COVID-19 jitters and the UK’s lockdown easing plans bringing airlines back into focus.

From the CAC, the banking sector also struggled at the start of the week. BNP Paribas fell by 2.48%, with Credit Agricole and Soc Gen seeing losses of 3.25% and 2.70% respectively.

It was a mixed day for the auto sector. Peugeot fell by 2.12%, while Renault rose by 0.78%.

Air France-KLM and. Airbus SE saw relatively heavy losses of 3.32% and 2.80% respectively.

On the VIX Index

It was a 3^rd consecutive day in the red for the VIX, which fell by 1.47% on Monday. Following on from an 11.01% slide on Friday, the VIX ended the day at 27.6

There were no stats to provide direction on the day. A lack of stats left market sentiment towards COVID-19 and lockdown measures to influence risk appetite.

Falling crude oil prices and fears of a 2^nd wave of coronavirus infections as a result of an easing in lockdown measures limited the downside for the VIX.

The S&P500 rose by 0.02%, with the NASDAQ gaining 0.78%, while the Dow slipped by 0.45% on the day.

The Day Ahead

It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.

A lack of stats leaves the majors in the hands of geopolitics and COVID-19 numbers once more.

Reports of new COVID-19 clusters in South Korea and China will raise concerns over the possible impact of easing lockdown measures.

It will likely mean that borders will likely remain closed for an extended period of time, which would be a market negative.

Any chatter from EU member states over the renewed spread of the virus in Asia will influence.

The markets will also need to monitor any chatter from Beijing and Washington on trade talks.

The Latest Coronavirus Figures

On Monday, the number of new coronavirus cases rose by 63,120 to 4,242,959. On Sunday, the number of new cases had risen by 78,198. The daily increase was far lower than Sunday’s rise and lower than a 74,217 increase on the previous Monday.

France, Germany, Italy, and Spain reported 5,315 new cases on Monday, which was up from 3.549 new cases on Sunday. On the previous Monday, 3,642 new cases had been reported. A rise in the number of cases in Spain led to the uptick.

From the U.S, the total number of cases rose by 13,704 to 1,381,342 on Monday. On Sunday, the total number of cases had risen by 20,329. On Monday, 4^th May, the total new number of cases had risen by 22,145.

In the futures markets, at the time of writing, the DAX was down by 61.5 points, with the Dow down by 153 points.