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House speaker Pelosi: Has major difference of opinion with administration on relief

House Speaker Pelosi

Speaking on MSNBC, House Speaker Pelosi says:

  • has major difference of opinion with administration on relief
  • doesn’t matter what relationship with sec. Mnuchin is
  • deal in lame-duck depends on GOP rehabilitation
  • all make matters worse to get stimulus agreement
  • certainly have stimulus at start of new presidency
  • administration is poisoned well in so many ways on election
  • Trump is so delusional on belief GOP will win house

Mixed result in for European stock indices to end the week

Big declines for the week for the major European stock indices

The European major indices are ending the session with mixed results for the day. For the week gets a different story as shares plunged across the European continent.
The provisional closes are showing:
  • German Ibex, -0.19%
  • France’s CAC, +0.61%
  • UK’s FTSE 100, +0.14%
  • Spain’s Ibex, +0.4%
  • Italy’s FTSE MIB, +0.3%
For the week, the provisional closes are showing:
  • German DAX, -8.5%
  • France’s CAC, -6.4%
  • UK’s FTSE 100, -4.7%
  • Spain’s Ibex, -6.5%
  • Italy’s FTSE MIB, -6.9%
Looking at the daily chart for the German DAX, the lows this week scraping along the 38.2% retracement of the 2020 trading range. That level comes in at 11472.22 the low today at 11450.08 dipped below that level, but rebounded back higher by the close. Move below that level next week would be more bearish.
Big declines for the week for the major European stock indices

A Trump win this time would be a far bigger upset

Some numbers to consider

Some numbers to consider
Here is the RealClearPolitics national polling average with 4 days left to go in presidential elections (final results):
  • 2004: Bush +2.6 (Bush +2.4)
  • 2008: Obama +6.5 (Obama +7.3)
  • 2012: Obama +0.1 (Obama +3.9)
  • 2016: Clinton +1.6 (Clinton +2.1)
  • 2020: Biden +7.4 (?)
Of course, the election is about the electoral college not the national vote. Consider the margins that Clinton lost this trio of swing states:
  • Michigan (0.3 percentage points)
  • Pennsylvania (0.7)
  • Wisconsin (0.7)
If Biden can turn those three; or Michigan and Wisconsin along with Arizona or North Carolina then it’s a Biden win.
In 2016, the average for Michigan was Clinton +3.6. Trump won by 0.3pp. Right now it’s Biden +6.5.
In 2016, the average for Pennsylvania was Clinton +2.1. Trump won by 0.7 pp. Right now it’s Biden +3.6.
In 2016, the average for Wisconsin was Clinton 6.5. Trump won by 0.7 pp. Right now it’s Biden +6.4 but the state is getting hammered by covid.
Add in much better numbers in North Carolina (Biden +0.6), Arizona (tie), Ohio (tie), Georgia (Biden +0.4) and Florida (Biden +1.2) and there are so many ways Trump can lose.
I’m not saying it’s impossible for Trump to lose — not by a longshot — but it would be a bigger upset than four years ago.

Eurozone Q3 preliminary GDP +12.7% vs +9.6% q/q expected

Latest data released by Eurostat – 30 October 2020

  • Prior -11.8%
  • GDP -4.3% vs -7.0% y/y expected
  • Prior -14.7%

As predicated by the individual country readings earlier today, the rebound in the Eurozone economy was much stronger than estimated in Q3. That is a positive takeaway after the plunge in Q2 but amid the resurgence in the virus in recent weeks, optimism is fleeting.

The outlook for Q4 looks grim amid tighter virus restrictions and that takes away a lot of the “feel-good” factor from the last quarter. If anything else, it reaffirms the narrative that the economy cannot quite go back to normal while keeping the health crisis at bay.
Something has got to give and that means economic confidence/morale may be even

Latest gold trends from the World Gold Council

A quick look at the report

The year to date overall demand for gold is roughly equivalent to 2009.The year to date demand is around 2,972 tonnes. Take a look at the year to date demand below:
A quick look at the report
The quarter on quarter demand for Q3 fell to 892.3 tonnes which has been its lowest since Q3 2009. Check out the chart below:
Gold, XAUUSD
Key highlights from the gold council.

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What does the record US GDP rebound really look like?

Some perspective to the US Q3 advanced report yesterday

US GDP

On paper, the record rebound in US GDP in Q3 sounds stunning but it needs to be put into better context. Despite the bounce, overall economic output still remains well below pre-virus levels and there are caveats attached to it.
After accounting for the figures, nominal GDP remained 2.7% below its level in Q4 2019 (⬆️) and in real terms, it is seen 3.5% below its level at the end of last year.
While the rebound means that the US economy has recovered about 2/3 its output lost seen in Q2, the stimulus measures during the last few months were arguably a key reason helping to “prop up” the economy in the last quarter.
All of that has been stripped away ahead of the election and with the virus situation worsening, the outlook bodes ill for another major rebound – if there even is one – in Q4.

BofA say a contested US election could slice 20% off stocks

BoA on a risk for the US election.

  • A “landslide victory for either Trump or Biden and rapid election conclusion would likely be welcomed by markets while a severely contested election could see risk-off and drive 10-year rates materially lower”
  • “If Trump leads on Election Day with a large backlog of absentee and mail-in ballots, stocks could see more volatility until more results come in”
BoA citing 2000 – the S&P 500 sold off 5% before the Supreme Court called the election for George W. Bush on December 12
Info comes via Bloomberg, more at the link (may be gated)
BoA on a risk for the US election.