Ahead of America’s final presidential debate between President Trump and candidate Biden, Wall Street exhibited a choppy U.S. session, starting in the red, the Dow and S&P500 recovered back into positive territory. Across the Pacific, U.K. and European markets trimmed Wednesday’s losses following Britain’s Finance Minister Sunak announcing new measures to protect furloughed workers and cash grants for affected businesses.
In Asia, subsequent after a heated U.S. debate, markets were mixed with Hong Kong rallying 0.72% whilst Australia and Japan slid lower. Much of prevailing mood is still dependant upon the whipsawing U.S. stimulus saga. Yesterday, House Speaker Pelosi and Treasury Secretary Mnuchin signalled we’re “just about there” as one of the four key disputed points was near resolving. The remaining points to settle include state and local government aid, school funding and liability shielding for businesses from coronavirus related incidents.
Stimulus talks in America drag on resulting in a choppy Wall Street session overnight, ultimately edging the benchmarks lower. Despite Tuesday’s deadline, House Speaker Pelosi kept hopes alive stating she and the White House ‘has a prospect for an agreement’ but is unlikely to pass a relief bill before November elections. Senate Majority Leader Mitch McConnell has also shown a lack of interest in allowing the bill cross Senate floors before Amy Coney Barrett’s Supreme Court nomination.
U.K and European indices struggle to post gains despite a more optimistic Brexit outlook after E.U’s chief negotiator Michel Barnier signalled a deal is within reach. Discussions will resume with negotiators meeting in London on Thursday, aiming for an agreement by mid-November. Upon the news hitting headlines, the pound rallied over 200 pips to a six week high ending the session at 1.3141 whilst the FTSE sank 2.2% weighed down by losses in exporters. The STOXX tumbled 2%, the FRANC down 2.1% and the DAX is lower by 1.6% amid intensifying lockdown protocols, hitting the healthcare and construction sector most.
Aftermarket stimulus developments saw overnight Wall Street futures rebound from Tuesday’s lows. Investors were on edge as House Democrats self-imposed deadline loomed with no progress over the horizon. Much to market’s relief, late afternoon House Speaker Pelosi signalled a potential deal before November 3rd saying “I’m optimistic because I do think we have a shared value — not many — but a shared value that finally they want to crush the virus”. Republican’s had made concessions to up their deal to 1.88tn from 1.8tn, closing in on Democrats 2.2tn goal post. Thus far, Pelosi has yet to budge.
Following futures, Hong Kong rallied as high as 1.2% on Asia’s open over renewed stimulus hope. Likewise, Japan up 0.5% as the export-dependent nation, of which approximately 20% of total exports is reliant upon U.S. trade. Elsewhere, Australia opens relatively unchanged after the benchmark surged 6% MTD on the prospect of November rate cuts and a growth boosting government budget.
Wall Street falters as stimulus deadline looms Tuesday with indices ending the past 5 sessions lower. Despite House Speaker Pelosi remaining optimistic that legislation could be devised in the final hours of the strait. Thus far, neither congressional parties have budged on their $1.8tn (Republican) and $2.2tn (Democrat) proposals. Regardless, Senate majority leader McConnell will put forth a $500bn piecemeal deal to the floor for vote on Wednesday.
Worldwide COVID-19 cases officially passing 40M on Monday weighs on European markets. Broad-based benchmarks fell yesterday, with the STOXX leading the charge lower by 1.56%. Italian cases hit a daily record, with the government responding via implementing evening 9PM curfews. Likewise, Spain recorded their 1 millionth case as the nation reignites lockdown procedures. Pessimism across the channel outweighed signs of progress on a Brexit trade deal. Members of the House of Lords had signalled their willingness to remove Boris Johnson’s controversial clause in relation to Ireland. Nevertheless, the FTSE was down 0.8% by sessions end.
Global indices and futures edged higher following Asia’s open despite risk-off sentiment on Wall Street from previous weeks end. The last two hours of Friday’s session saw Wall Street erase intraday gains ending down for the day. Investors seemingly unwilling to hold onto weekend exposure in the face of U.S. stimulus risk. On Saturday, House Speaker Pelosi set a deadline dictating certain levels of progress must be met by Tuesday for a stimulus deal to be signed before November elections. Pelosi and Treasury Secretary Mnuchin agreed to speak again on Monday.
Across the Atlantic, European indices continue to track the developments of COVID’s resurgence across the continent. Economic recovery efforts have been curbed as government re-implement stricter piecemeal lockdown measures. Nonetheless, a little reprieve for Europe’s markets with drug maker Pfizer announcing a potential coronavirus vaccine, ready by years end. The DAX, FRANC and STOXX responded via modest gains in positive territory between 1 – 1.2% respectively.
No-deal Brexit headlines continue to plague U.K with P.M. Boris Johnson informing businesses to prepare for a non-agreement. FTSE though eked out 0.7% gripping onto hopes that negotiations will persist in the following week despite political rhetoric between Brussels and Britain. Sign’s that the conservative party was willing to water down Johnson’s ‘walk-away’ demands further buoyed U.K markets.
European indices and global futures tumbled amid London session as EU leaders refused to make concessions just hours before PM Boris Johnson was expected to announce whether the U.K. will walk away from negotiations. Brussels left the ball on Johnson’s court, of whom expressed his disappointment and will respond on Friday.
Nonetheless, by the end of U.S. session most broad-based benchmarks recovered on improving stimulus sentiment. Speaker Pelosi re-iterated the urgency for a relief package before elections as she continued talks with Secretary Mnuchin. President Trump further voiced his willingness for a bi-partisan deal exceeding $1.8tn.
Among the weaker performers of the day, Euro STOXX 50 settled 1.2% lower as investors were unnerved over accelerating COVID cases in Europe. In so far that Italy registered close to 9,000 daily cases, up from 7,000 while France jumped to 30,000, up from 22,500 the day before. Likewise, cases in Poland rose to a record 24% higher. With impending new restrictions, investors are growing weary the pandemic will continue into 2021 crippling Europe’s recovery.
Despite U.S. threats to add China’s Ant Group to a trade blacklist, Hong Kong rallied 1.3% whilst Australia and Japan slumped. The prospect of Ant Groups dual listing in Hong Kong and Shanghai raising a record $35bn USD kept the market float.
On-going stimulus saga continue to plague global markets after Treasury Secretary Steven Mnuchin extinguished hope that congressional parties could strike a stimulus deal before November elections. Banking also weighed heavily on Wall Street as Wells Fargo tumbled 6% on a pessimistic forward guidance despite posting positive earnings last quarter while Bank of America sank 5.3% with the banks’ trading arm’s performance disappointed when compared to Goldman Sachs.
Meanwhile, European indices edged lower with prospects of more lockdown ahead while vaccine delays further dent sentiment. Just recently Italian P.M Giuseppe Conte implemented new social distancing restrictions in restaurants, sports and school activities. Across the English Channel, rising Brexit uncertainty lingers onto top of the FTSE, with the benchmark falling 1.1% as Boris Johnson’s self-imposed deadline is set to expire today. Though the pound recovered, up 80 pips to an off-remark made by the U.K Prime Minister signalling he won’t abandon Brexit talks.
Following four consecutive days of advance, Wall Street retreated on Tuesday as U.S. stimulus negotiations stalling grabbed headlines. House Speaker Pelosi rejected a piecemeal $500bn proposal brought forth by Senate Majority Leader Mitch McConnell, far smaller than the $2.2tn passed by the House. In a rare glimpse in agreement, Trump defied Republican narrative tweeting “STIMULUS! Go big or go home!!!”.
Global mood was further dampened after Johnson & Johnson paused COVID-19 vaccine trials citing unexplained illness in participants. Likewise, Eli Lilly & Co halted their trials citing safety concerns just weeks after AstraZeneca suspended their late-stage trials. Given the plethora of negative news European indices snapped a 3-day winning streak as investors recalibrated expectations of when a cure will eventuate while the continent braces for a resurgence in cases. Banking slid over rising odds the ECB will implement more stimulus to combat COVID’s resurgence.
Asia opened mixed with Japan recovering from overnight wounds whilst Hong Kong slips lower following China’s President Xi Jinping’s nation-wide address, celebrating the 40th anniversary of the Shenzhen Special Economic Zone establishment. Australia rallied on the back of Aussie household sentiment index surging 11.9% in October despite continuing dire circumstances in Victoria.
Amid observance for Columbus Day, U.S. technology company’s led Wall Street’s advance with Amazon, Apple and Twitter posting gains between 4.75% - 6.35% respectively. A combination of U.S. stimulus negotiations progressing and a COVID-19 resurgence in Europe (benefiting stay-at-home tech firms) was partly fueling Monday’s rally.
Despite Italy and U.K. preparing for stricter restrictions jeopardizing an already fragile economic recovery, European benchmarks tracked Wall Street’s overnight gains hitting a five-week high.
Coming into Asia’s, the Hong Kong Stock Exchange remains closed as the territory braces for a level 8 typhoon whilst Australia continues to outperform rallying 0.6% on open. Since October, the Aussie S&P200 has been end in the green 6 of the last 7 sessions. Japan remains in consolidation as investors await direction from the newly elected Prime Minister Suga.
Despite a plummeting approval rating and conflicting health status reports, President Trump reassured Wall Street on Friday by increasing his previous stimulus proposal to 1.8tn. Moving closer to Pelosi’s 2.2tn goal post. As investors grew more hopeful, U.S. indices settled at weekly highs by the close of the session. Likewise, Europe edged higher on Friday as retail firms upgraded earnings outlook defying resurging infection rates.
With U.S. observing Columbus Day and Canada celebrating Thanksgiving, Asia pointed to a mixed start. Hong Kong rallied 1.2% following the PBOC announcing a capital restriction adjustment over the weekend. Australia crept higher whilst Japan slumped as Monday data showed wholesale inflation remains negative for 7 consecutive months, heightening deflationary risk.