By Peter Nurse
Investing.com – European stock markets are seen opening in a mixed fashion Monday, with rising Covid-19 cases prompting new lockdowns and U.S. political uncertainty prompting investors to take a cautious stance.
The U.K. became the latest country to order a new, more rigorous lockdown Monday as the number of its Covid-19 cases continued to rise sharply, not helped by a new strain of the virus that is more infectious than the original one.
In Germany, Chancellor Angela Merkel and the state premiers are scheduled on Tuesday to discuss a possible extension of the current lockdown beyond Jan. 10. Restaurants, bars, museums and cinemas remain shut in France, while New York Governor Andrew Cuomo confirmed the state’s first case of new Covid strain, raising the possibility of further restrictions there.
The ever-rising number of Covid-19 cases globally is dampening the enthusiasm triggered by the rollout of vaccines that began in December.
Also prompting wariness among investors is the uncertainty surrounding the Senate runoffs in Georgia due later Tuesday. These could determine the control of this branch of the U.S. government and thus impact the economic policies incoming President Joe Biden will be able to introduce.
Both contests are seen as being very tight and the outcomes may not be immediately known, which could result in the type of political chaos which followed the presidential election in November.
Turning to economic data, German retail sales rose 1.9% on the month in November, significantly better than the drop of 2.0% expected given the increased Covid-19 restrictions. The country’s latest unemployment numbers are due for release later Tuesday.
Retailers WM Morrison Supermarkets (LON:MRW) and Next (LON:NXT) both publish Christmas trading statements Tuesday, and these will be studied to gauge the impact of the restrictions on this important trading period.
Oil prices weakened Tuesday after a group of the world’s top producers failed to agree a production policy for next month, despite concerns about demand growth due to the Covid-19 pandemic.
OPEC and allied producers including Russia, a grouping known as OPEC+, will have to continue Monday’s meeting later today, split over whether or not to proceed with a planned increase of 500,000 barrels a day from February. They decided last month to raise output by just 500,000 barrels per day in January, but are still holding more than 7 million barrels a day of output back from the market.Leave a comment