Presidential Town Halls, Brexit and U.S. Retail Sales - What's up in Markets

Presidential Town Halls, Brexit and U.S. Retail Sales - What's up in Markets  | Oct 16, 2020 11:46

Presidential Town Halls, Brexit and U.S. Retail Sales - What's up in Markets

By Geoffrey Smith -- The U.S. presidential candidates spar remotely at town hall meetings, the EU puts the pressure on Boris Johnson to back down over Brexit, stocks are flat ahead of retail sales and industrial production data. There are earnings from Honeywell (NYSE:HON) and Schlumberger (NYSE:SLB), while oil dips as OPEC gives no hint of abandoning plans to raise output next year. Here's what you need to know in financial markets on Friday, October 16th.

1. Presidential candidates spar remotely

The two U.S. presidential candidates sparred with each other at a distance in two separate town halls.

President Donald Trump’s was generally free of any new commitments on policy and was more notable for his refusal to disavow the QAnon conspiracy theory movement.

Democratic Party nominee and former vice-president Joe Biden said he would aim to raise $2.4 trillion in taxes over the next decade from corporations and the wealthiest U.S. households. As regards oil exploration policy, he said he didn’t support a ban on ‘fracking’, but said it has to be managed “very, very carefully”.

Biden also chose not to rule out adding judges to the Supreme Court if the Republican-controlled Senate presses ahead with the confirmation of Amy Coney Barrett to the court in the coming days,

2. Retail sales, industrial output data due

The day’s main economic data come from the real economy, with U.S. retail sales for September due at 8:30 AM ET (1230 GMT). Analysts expect core retail sales growth to slow to 0.5% on the month, from 0.7% in August, in what would be further evidence of the post-lockdown recovery flattening out.

Pressure on consumer spending is increasing as layoffs continue at a high rate, while Congress has failed to produce a new stimulus package to support incomes since September. Initial jobless claims rose to their highest level since August last week, at nearly 900,000.

At 9:15 AM, there will also be industrial production data for September, where a marginal acceleration of 0.5% is expected.

At 10 AM, the University of Michigan will publish its monthly consumer sentiment survey. The main index is expected to edge up to 80.5 from 80.4 last month.

3. Stocks flat; Honeywell, Schlumberger reports eyed

U.S. stock markets are indicated to end the week on a flat note, with none of the futures contracts on the major indices moving much in the overnight session.

By 6:30 AM ET, Dow futures were up 43 points or 0.2%, while S&P 500 Futures were up by a little less than 0.2%. NASDAQ Futures were up 0.3%.

The week’s earnings roster rounds off with updates from Honeywell and oilfield services giant Schlumberger, along with Ally Financial (NYSE:ALLY), State Street (NYSE:STT) and Bank of New York Mellon (NYSE:BK). Intuitive Surgical stock may also garner interest after posting much stronger-than-expected results after the closing bell on Thursday.

4  EU raises pressure on Johnson over Brexit

EU leaders refused to make any further concessions over post-Brexit trading arrangements with the U.K., putting the ball back firmly into Prime Minister Boris Johnson's court. An EU summit said it was up to the U.K. to honor the terms of the Withdrawal Agreement signed between the two parties last year. The pound dipped 0.3% to test a one-week low.

Leaders flagged ongoing concerns about the U.K. government's new draft bill that would violate the terms of that agreement and force customs checks on the Irish border. The EU is also looking for further concessions on the issues of fisheries and competition. 

Johnson is due to give a statement later. 

5 Oil edges down after OPEC

Crude oil prices fell overnight but held above $40 a barrel in the wake of a solid draw on U.S. stockpiles confirmed on Thursday by the U.S. Energy Information Administration.

Major oil trader Gunvor estimates that world stockpiles are currently falling by 3 million barrels a day, its CEO Torbjorn Tonqvist told Bloomberg earlier. However, that may not last for long. A technical meeting of OPEC experts on Thursday gave no indication that an increase in output of nearly 2 million barrels a day, scheduled for the start of next year, will be postponed.

U.S. crude futures were down 0.9% at $40.61 a barrel, while Brent futures were down 0.9% at $42.76 a barrel.

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Samuel Akuamoah
Samuel Akuamoah

this is crazy  ... (Read More)

Oct 16, 2020 12:23 GMT· Reply
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