October was negative for stock markets with the US SP500 index, which lost about 3% while the European Euro Stoxx 50 was down by 4%. The German DAX index, which loses almost 10%, is particularly weak. Declines that have not spared even the swiss SMI index downwards by approx. 6%.
It has weighed the worsening health situation, with consequent restrictive measures, especially in Europe, and the uncertainty surrounding the American election result, even though to date after the proclaimed victory of Biden there has been a very positive reaction, which has also been driven by the news of the Covid-19 vaccine by Pfizer.
Returning to October, the quarterly reports of major companies were better than the analysts’ expectations, and the correction on the markets was essentially due to an increase in COVID-19 contagious and partial lockdown decisions taken in various countries, especially European ones. Europe has been stricter by imposing restrictive measures, with the different countries that have had different approaches in dealing with this second wave, while the United States, despite experiencing a sharp increase in infections, has not revised its pandemic plan. Who, for the moment, hold is the Asian area. Thanks to a different and more meticulous management of the pandemic, Asian indices have been affected less by the decline in global stock markets.
Developments in the Covid-19 of recent weeks have only strengthened the arguments in favour of a further easing of the monetary policy by central banks, especially the ECB. The eurozone economy is losing momentum following the rebound in the second quarter, which is why the ECB is ready to recalibate its monetary policy in December, as the Lagarde confirmed at its usual press conference in the margins of the last meeting. This idea has made it possible to stop the sales that hit European lists. In America, the FED has been fundamentally neutral in the run-up to the elections, and it is now expected to be strengthened in the next part-sessions. We also expect a large package of fiscal stimulus to support growth, ranging from USD 500 billion to USD 1000 billion, to be approved.

In general, we expect markets to rise in the coming months, driven by the most cyclical sectors of the market and by the development and distribution of a large-scale vaccine by mid- 2021.