Things WERE going well.
We were going to end the week at all-time market highs but then data from Johns Hopkins indicated Covid-19 (2 years now) cases were rising in Europe and Austria announced early this morning that the country would go into Nationwide Lockdown starting Monday, with Restaurants and Retail Sectors to close. Areas of Germany will also be closing this week.
And, just like that, Christmas is cancelled – again.
“As Covid spreads in Europe and restrictions are strengthened in places in Germany and Austria, there’s a general recognition that things may not be going the right way,” said Sebastien Galy, a macro strategist at Nordea Asset Management. “This affects sentiment, both within markets and in households.”
The falling Euro took the Pound down with it and that caused the Dollar to rise, which then killed the rally in Oil (as does any sort of lockdown, of course) and that brought the indexes down sharply (aside from their general toppyness) and here we are – losing the whole week's market gains on a Friday morning.
We'll see if the downturn lasts the day though as we're in a low-volume, pre-holiday rally in the US (Thanksgiving is Thursday) with an effectively 3-day week ahead next week. Of course, the US tends to ignore things that go on in Europe, it's the Europeans who are trading our indexs down pre-market. Oil is down $3 (3.7%) back to $76 this morning and that makes a good line to go long on /CL as it should at least check the -2.5% line from $79, which would be $77.025, so we could get a nice $1 bounce – even if it is going to continue falling.