European main equity indexes were all down to start Friday morning as travel stocks were battered after the U.K. added more countries to its quarantine list, reported Reuters.
The Stoxx Europe 600 plunged nearly 2% after Britain added France, the Netherlands and Malta to a 14-day quarantine list for new arrivals.
The Stoxx Europe 600 Travel & Leisure Index fell 3% as airlines, cruise ships, and hotels were many of the bottom movers.
Stoxx Europe 600 Travel & Leisure Index
"What we have got is a significant amount of uncertainty over the evolution of coronavirus pandemic, which is maintaining a risk premium for the transportation, leisure, and hospitality sectors," said Alastair George, head strategist at Edison Investment Research.
Meanwhile, MSCI's World Index drifted lower by about 20bps. Overnight markets were sluggish following China's retail sales showed a decline in July, while factory numbers appeared to stall, suggesting the shape of the recovery might not be a "V."
Here are the highlights of China's economic data dump:
- Industrial output missed at 4.8%, Exp. 5.2%
- Retail sales not only missed in July but shrank for the 5th months, printing -1.1% Y/Y; vs the Est. 0.1%, failing to recover into the green for the first time since the pandemic began
- Fixed investment came in line, shrinking by -1.6%, same as the -1.6% expected.
- Unemployment came in at 5.7%, unchanged from last month and a completely arbitrary number which captures only whatever Beijing wants it to capture.
"There are no more positive than expected earnings and we're back to the macro background and the checking of the data regularly to see if the recovery is sustainable. Markets are pricing a lot of good news and we will be entering a period of volatility with the U.S. elections coming up," Savary said.
MSCI World Stocks
Weakness from Asia and Europe has spilled over into the U.S. The E-Mini S&P 500 is down about 31bps to 3,357. U.S. equity gains could be capped until the economic stimulus is seen as the world's largest economy is now reversing.