What’s Happening: Paris imposed an overnight curfew. In London, it is forbidden for people from other families to meet indoors. This move is an attempt to stop the rapid increase in Covid-19 cases across the continent as hospital capacity becomes a problem again.
Stocks in London, Paris, Milan and Frankfurt surged on Thursday and then rebounded on Friday. The market isn’t plunging like March, but the rapid climate change is still a cautious story.
European economists at Bank of America briefly made a note to their clients on Friday, saying, “Yes, that’s bad.”
“If localization and surgical restrictions continue to increase, it could be a bigger hindrance,” they said. “Already large preventive savings can be further increased due to virus-related uncertainties, and voluntary social distancing can easily amplify the economic impact of viral recurrence.”
It is difficult to ascertain the magnitude of the economic impact of the new measures, especially when considering the patchwork response of countries such as the UK, where cities like Liverpool face stricter rules than London.
“Tracking the size and extent of the limit [of] Deutsche Bank economist Sanjay Raja is sticking to his predictions for the UK’s 2% growth between October and December, but said the economy could stagnate completely if more restrictions were imposed.
Allianz now expects major European economies to contract again in the last quarter of this year, with Spain’s economy down 1.3% from the previous quarter and France’s by 1.1%.
The big picture: There is little reason to think that the challenges faced by European leaders (acting decisively and trying to stop a worsening health crisis or taking appropriate steps to protect fragile economic interests) are purely local phenomena.
Netflix is having a killer year. Can you keep it?
It’s no surprise to anyone crouching at home that Netflix is having a knockout year.
Stock View: Stocks soared 64% in 2020, and the S&P 500 is nearing 8%.
Investors will check on Tuesday to see if Netflix can sustain momentum when reporting quarterly earnings from July to September. The company said in July it expected to acquire about 2.5 million subscribers during this period.
Bank of America analysts believe the number of subscribers may weaken this quarter as competition increases with players like Disney+ and NBC’s Peacock, a return of live sports and an increase in unsubscribers is expected.
Nevertheless, faith in the company’s long-term strategy raised the stock price target to $670, up 26% from the closing price on Friday.
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