Dow Jones Futures Down 300 Points as SAP and Lockdowns Weigh
Stocks in Europe and the U.S. are lower on Monday with the Dow Jones industrial index off almost 300 points. A profit warning from SAP and further restrictions over the coronavirus are bringing a negative tone to stock markets, while the United States government has still been unable to pass a new stimulus bill.
The big stock news of the day was a 20% drop in the German software company SAP after its 2020 business outlook was revised downwards. SAP said 2023 operating margins could be around 5% lower than previous projections. The news will worry investors that other companies will follow.
Spain and Italy are the latest countries to impose greater curfews, while France saw its daily cases rise above 50,000. Protestors clashed with police in the Italian city of Naples in another sign that the people are growing tired of lockdown measures and this could worsen in the months ahead as we go deeper into the flu season.
Finally, traders are losing patience with U.S. lawmakers as a second stimulus bill is still not in place. The Democrat leader Nancy Pelosi and the White House chief of staff Mark Meadows appeared on CNN and both accused the other party of blocking the stimulus talks. A second package near the $1.88 trillion figure was expected to have been passed by now.
Dow Jones Technical Outlook
The Dow Jones index found support at the 50-day moving average on Thursday and that signaled further gains may be ahead but the market has turned and is looking to close below that indicator again. Target for the next support would be the 27,640 level which was tested in early-October.