It has been a bad week for worldwide stocks, and most major indices are down by around 5% for the week, with further losses expected over the next days.

But don't blame it all on the election. Yes, there is some uncertainty building up, especially if Joe Biden wins, but the odds are that each candidate has narrowed to 50/50. Biden's recently revealed corruption scandal is hurting him, while trump continues to attract huge crowds in his rallies.

As many keep saying stocks only go up in the long-term, no matter what party reigns or who the president is.

Worse than the election, are covid-19 cases which continue to rise in Europe. Hospitals are getting overrun, and most countries are imposing lockdowns and closing down non-essential businesses. Cyclical sectors are hit the hardest, and many businesses will not survive, especially if lockdowns persist throughout the whole winter.

Since both DAX and CAC indices are composed of many cyclical companies, they are falling the hardest. DAX lost nearly 4% on Wednesday and is down 1,000 points already this week, while the French CAC index was down 3% on the same day.

To top it off, there seems to be no will to impose new stimulus, neither a fiscal nor a monetary one. The new round of fiscal stimulus in the US will most likely be passed some weeks after the elections, and in the EU, getting anything done requires weeks, if not months of debates. central banks also seem powerless; the European Central Bank (ECB) might not have any more bonds to buy soon, and the federal reserve (FED) does not want to lower fed funds below zero.  The technical picture now prefers more selling as indices broke down below some key supports. Should Trump win the election, we might see a relief rally, but stocks could experience more difficult days unless there is new stimulus.

Provided by Axiory