Chief Investment Officer Bernard Swords explains how the market drop last week was caused by US election uncertainty, the acceleration of COVID globally and the delay on a fiscal stimulus package in the US. As all attention now turns to the US election outcome this week, he highlighted the encouraging Q3 earnings trends in the US and Europe as well as positive economic data from China.
- Market were impacted last week by the rise in COVID-19 cases and hospitalisations across Europe, as Pfizer also announced delays on their vaccine research data.
- Q3 earnings results trends have been encouraging - in the US, the results are coming in at 19% ahead of expectations, with similar trends for Europe albeit fewer reporting companies.
- US election polls are indicating a democratic sweep which would be a positive outcome for financial markets but concerns linger about the potential for a Democrat in the White House and a split congress which would delay and impact the size of the fiscal package.