European stocks drifted significantly lower on Friday after the risk-on sentiment got shattered by rising economic uncertainty for the last session of the week. Yesterday’s bullish stance vanished on Friday after investors’ risk appetite was weighed down by macro data (disappointing job report) in addition to lingering uncertainties over the next COVID-19 relief packages from the US and the EU.
Even if vaccine developments continue on track, investors lack clarity on the very short-term, after recent data displayed a mixed picture of the recovery while virus cases and deaths continue to grow. There is a high chance markets will remain volatile but not very directional until investors get more clues on where the economy is going as well as on the next moves from governments and central bankers. However, a breakthrough would allow most markets to register higher tops before year-end.
