Spreadex | Oct 11, 2020 06:44
Will the US election, and what that means for covid-19 stimulus, be in the driving seat this week?
The US markets are entering a bit of a tricky period in the latter half of October – close to the election, but with enough else going on that it’s unclear how much attention is being paid to the actual outcome of the vote.
Last week was dominated early on by Trump’s covid-19 diagnosis, but less what it meant for the election, and more for its impact on a new stimulus package. His return to the White House appeared to remove an obstacle to a deal getting gone, only for Trump himself to emerge as a blockage, halting negotiations in their tracks.
After a major wobble investors were reassured by the President’s claims he would pass a package immediately if he won the election, while signalling a willingness to bail out US airlines, giving the go ahead for Nancy Pelosi and Steven Mnuchin to continue their talks.
Any further progress on a package, be it just for airlines or otherwise – and Pelosi has signalled an unwillingness to support an airlines-only deal without wider stimulus – will likely remain the focus for investors as the week goes on.
In terms of the election, after a chaotic week – which sees the debate schedule up in the air after the President rejected a virtual tete-a-tete on Thursday – Spreadex is offering Biden odds on at 40/85, with Trump at 7/4. Biden’s then also at an Electoral College Votes spread of 320-328, well ahead of the incumbent at 210-218, with the Democrat at a Total States Won spread of 25.5-27 to Trump’s 24-25.5.
These prices could continue to change dependent on if Trump pushes ahead with rallies in key states, what the lay of the land is regarding the debates, and the results of Joe Biden’s town hall address on Thursday, set to be shown on ABC News instead of the postponed debate.
As for the economic calendar, after Columbus Day on Monday, there’s inflation on Tuesday, PPI on Wednesday, jobless claims and Philly Fed and Empire State manufacturing indices on Thursday, and retail sales, consumer sentiment and industrial production readings on Friday.
The third quarter earnings season also gets underway, with JP Morgan (NYSE:JPM), Citigroup (NYSE:C), Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG) on Tuesday; Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) on Wednesday; and PayPal (NASDAQ:PYPL) and Morgan Stanley (NYSE:MS) on Thursday.
The big focus for the UK this week is the October 15th Brexit deal ‘deadline’ – the point at which Boris Johnson has said, if an agreement isn’t reached, both sides should ‘accept that and move on’. The pound and FTSE could feel a bit anxious ahead of that date, unless there are serious signs that either a deal is imminent, or that the ‘deadline’ will be extended.
Before that, there’s the jobs report on Tuesday, and the Bank of England credit conditions survey on Thursday.
Also keeping an eye on Brexit negotiations, the Eurozone sees German inflation and ZEW economic sentiment readings on Tuesday, industrial production on Wednesday, French inflation on Thursday and the region-wide inflation and trade balance numbers on Friday.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."
Written By: Spreadex
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.