Spreadex Market Update

Dow Jones and DAX at record highs, FTSE settles for 2-week-plus peak



The Dow Jones was keen to get in on the record high-hitting action this Wednesday, in the process extending the gains seen in Europe.

Is the coronavirus – now officially named Covid-19 – outbreak dealt with? No. Is it yet clear the full extent the illness will have on both the Chinese and global economy? No. Has a treatment been found? Once again, no.

However, none of this really mattered to investors. The markets are ready to seize upon any sign of good news, so the fact there is evidence the number of new cases in China is falling was plenty of reason to push higher.

And push higher they did. Climbing as much as 250 points, the Dow Jones spent the early moments of the session repeatedly testing a fresh record peak, moving back and forth across 29500.

This echoed the DAX, which surged to its own all-time high of 13730 thanks to an 80 point increase. The CAC also came close, flirting with 6100 for most of the afternoon.

Often the black sheep of the Western indices, the FTSE wasn’t popping any champagne bottles following a 0.3% rise. Instead the UK index had to settle for a 2-week-plus peak, still around 350 points shy of last July’s highs.

What makes that interesting is that the FTSE’s commodity sector had a very strong session. With Brent Crude up 3.7%, BP and Shell rose 1.3% and 1.4% respectively; Antofagasta and Anglo American, meanwhile, led the miners as they climbed 4.3%.

With the exception of the FTSE, the major Western indices have now clawed back their coronavirus losses and then some. It is unclear, however whether the market’s preoccupation with the illness is coming to an end – at least until the next round of Chinese data – or if investors still have the capacity to be spooked by headlines relating to the outbreak.

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