Markets mixed as full lockdown in US seen unlikely

Markets were mixed on Thursday.

In the US, the S&P 500 fell 0.6 percent but the Nasdaq Composite rose 0.5 percent to a record high.

Elsewhere, the STOXX Europe 600 fell 0.8 percent but Asian markets rose, with the Shanghai Composite jumping 1.4 percent and the Nikkei 225 rising 0.4 percent.

In the US, investors were concerned with the continuing rise in COVID-19 infections after cases in California, Texas and Florida hit new daily record highs on Wednesday.

“We have never gotten out of the first wave,” said Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

Still, David Bahnsen, chief investment officer of The Bahnsen Group, said that “mortalities are under control, and we’re not going back to a full societal lockdown”. In the meantime, it is “hard for the market to form an opinion against risk assets with the liquidity and tight spreads that the Fed has produced”.

In contrast, BofA head of equity research Savita Subramanian sees headwinds for the market.

“We’ve had a reopening frenzy, and now we’re seeing payback,” she said.