The fear of the Coronavirus, of a second wave of infections that could lead to a new lockdown – for now in China but also in the United States – but also the general prospects of the economy after the restart: immediate causes and deeper causes are the basis of the Stock market crashes on the morning of Monday 15. Wall Street’s sharply declining opening made European stock exchange day even darker. Here, the trend of share prices and stock market prices in real time. After a morning in heavy decline, European stocks have attempted a recovery. Among the largest, only Milan closed positively, + 0.43%, while Paris lost 0.49%, London lost 0.66%, Frankfurt fell 0.32%. In China, 79 newly infected people in Beijing and 11 isolated neighborhoods in the market area worry. In the US in 20 states there is an increase in new infections and hospitalizations; in some cases, these are record increases. The figures resulted in the negative closing of all Asian markets: Tokyo -3.47%, Hong Kong -2.16%, Shanghai -1.02% and Seoul -4.76%.
Vaccari (Consultinvest): prices too expensive, economy down
Certainly the market will still be volatile for a long time, experts say. In fact, the market had risen in the weeks and days in the past due to the purchases of those who saw the glass half full, explains Enrico Vaccari, head of institutional clientele of Consultinvest, but they were the same ones that had sold at the March lows because they saw it half empty . But in reality the glass is always in the middle. The markets were already expensive before the Covid-19 crisis, today with the lifts they have returned to being very expensive. The Stoxx 600 European index has a earnings ratio of 22, the highest rating since 2005, excessively high. Given that it will be very difficult that profits will rise again, we will have to expect strong volatility, also because the action of the central banks is not sufficient on its own to restore a climate of trust that is not there. The operators are worried, the loss of jobs will be a real relocation and will leave many unemployed, in sectors such as luxury, hospitality, large retailers and retail stores even if there are sectors that have shown resistance to the crisis such as online and technological commerce. , and the great performance of the US indices was linked to them. So the most likely scenario now is that of a U-shaped recovery but very elongated.
Ghilotti (Equita): the market is already looking at 2021
The departure of the price lists from all over Europe was linked to the news from China, to the fears of the second wave: a very selective lockdown, but in Beijing, it aroused a lot of concern, explains Domenico Ghilotti, co-manager of Equita’s research office. At this moment the sectors affected are linked to the most cyclical part and to Travel & Leisure. It holds Healthcare better, as a defensive sector. Known also for a certain resilience, therefore premature to see in these data a return to a phase of crisis. The volatility also linked to the fact that there are all in all constructive messages of economic activity that starts again. Today one of the best Amplifon stocks, which “med-tech” and “retail”, therefore a company that could have been more impacted and is instead returning to sales almost at pre-crisis levels. Rather than looking at the price-earnings multiples of 2020, distorted because marked by at least a quarter of inactivity, the market is wondering what a sustainable level could be in 2021. On Italy 2021 we expect profits to recover strongly but always behind 14% from 2019 levels, after -50% of profits this year. If so, if there was this important recovery, the market could find some solidity. At this stage, however, we still suggest some caution, given that visibility in 2021 remains low.