Archives of “October 2020” month

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There is likely to be further selling to go on the Hope Hicks COVID-19 infection news

  
  Analysis

The reports now are that White House officials were aware the Hicks had contracted the virus on Wednesday evening.

What this means is that Hicks was positive when flying aboard Air Force 1 with Trump on the same day.
Stocks are on the slide as are ‘risk’ trades more widely.
Hicks was also aboard Marine One, the President’s helicopter transport, on Wednesday along with other advisers and staff.  Pictured here walking to board.
hicks trump coronavirus COVID-19
Trump has been taking precautions for months now, distancing, wearing a mask, avoiding close contact where he can. And he is renowned for his scrupulous hand-washing habits. As I said earlier his age and obesity mark him out as being in a high-risk group, like so many of the 200,000+ Americans (and more than a million around the globe) who have perished from the infection. Its good he is taking care of himself.

Trump aide Hope Hicks test positive to COVID-19

  
Analysis, Politics

Hicks is a close confidante of Trump

  • former White House communications director
  • now an aide to senior advisor Jared Kushner
Media reports add:
  • Hicks travelled with Trump aboard Air Force One to and from the presidential debate on Tuesday, and to his Minnesota rally yesterday
Let’s hope she recovers soon.
As for President Trump, his age and obesity put him in a high-risk group. Let’s hope also he does not contract the infection despite the close contact.
hicks trump coronavirus COVID-19

Friday is nonfarm payroll day in the US – Goldman Sachs preview

  
  Analysis

September NFP is due at 1230 GMT on Friday 2 October 2020

  • Headline expected is +875k, prior +1371K
  • Unemployment expected 8.2%, prior 8.4%
  • Average hourly earnings expected +0.2% m/m and +4.8% y/y, prior 0.4 and 4.7% respectively
Estimate from Goldman Sachs:
  • headline +1.1m in September
  • unemployment rate 8.1%.
GS cite:
  • High-frequency labour market information indicates strong September job gains,
  • the second derivative improvement in the public-health situation suggests scope for a pickup in Sun Belt job growth

US Indices close with their 5th positive close in the last 6 trading days

  
Analysis, US Market

Hopes for a stimulus package

The US major stock indices closed higher for the 5th day over the last 6 days. The NASDAQ led the way and is closing near the session highs. It is also at the highest level since September 3.
The Dow and S&P also closed higher but are nearer the midpoint of their trading ranges and with smaller gains.  Nevertheless those indices are up for the 2nd consecutive day.
The final numbers are showing:
  • The S&P index closed up 17.8 points or 0.53% at 3380.80. The high price reached 3397.18. The low price extended to 3361.39
  • The NASDAQ index is closing up 159.00 points or 1.42% at 11326.50. The high price reached 11344.13. The low extended to 11240.53
  • The Dow closed up 35.20 points or 0.13% at 27816.90.  The high price reached 28041.46. The low extended to 27669.26.
Some of the biggest winners today included:
  • Chewy, +7.55%
  • Netflix, +5.53%
  • Twitter, +4.94%
  • Tesla, +4.4%
  • Charles Schwab, +4.17%
  • Slack, +3.95%
  • CrowdStrike, +3.89%
  • Square, +3.73%
  • AMD, +3.54%
  • First Solar, +3.46%
  • Zoom, +2.76%
  • Beyond Meat, +2.72%
  • American Airlines, +2.36%
  • Amazon, +2.35%
  • micron, +2.07%
The bigger losers today include:
  • Goodrx, -9.59%
  • Schlumberger, -3.53%
  • Exxon Mobil, -3.51%
  • Snowflake, -3.14%
  • Albemarle, -2.85%
  • Morgan Stanley, -2.25%
  • Chevron, -2.22%
  • Alcoa, -2.06%
  • DuPont, -1.73%
  • Caterpillar, -1.68%
  • Merck, -1.56%
  • Rack Space, -1.45%
  • Emerson, -1.4%
  • AliBaba, -1.35%
  • Northrop Grumman, -1.22%
  • Goldman Sachs, -1.17%

Most pairs remain contained in trading today

  
Analysis, Forex

The GBP pairs had their spat of Brexit headline volatility, but other pairs not, not so much.

The major indices vs. the US dollar open the day with ranges less than 54 points with the exception of the GBPUSD, and that’s where the ranges have remained.  In fact, looking at the major pairs at the start of the NY session the low to high ranges showed:

  • EURUSD 53 pips
  • GBPUSD 157 pips
  • USDJPY 21 pips
  • USDCHF 50 pips
  • USDCAD 46 pips
  • AUDUSD, 54 pips
  • NZDUSD 48 pips
The GBP pairs had their spat of Brexit headline volatility, but other pairs not, not so much.
The ranges now shows:
  • EURUSD, the same 53 pips
  • GBPUSD 158 pips, the range was increased by 1 pip
  • USDJPY 32 pips,. The very narrow range was increased by 11 pips
  • USDCHF, the same 50 pips
  • USDCAD, the same 46 pips
  • AUDUSD, the same 54 pips
  • NZDUSD, the same 48 pips
The ranges and changesThe major crosses are also little changed vs the early NY session.
So trading in the forex remains range bound and confined in ranges that are less than the average ranges (sans the GBP pairs).
Can there be a late day run?
Sure… the “market” does get tired of non trending, and with ranges contained it is not far for a break and run.  What levels are in play for some of the pairs?
  • EURUSD: The EURUSD stalled near the 50% retracement at 1.17641.  A move with momentum above that level should ignite some buyer.   Close resistance at 1.1755 (price is at 1.1743).  On the downside falling below the 1.1713 level would take the price below a lower trend line on the hourly chart.
  • USDJPY: Lower trend line at 105.42. On the topside, the high today stalled near swing highs from September 25, September 29 and a swing high from yesterday between 105.694 to 105.729.  Get above should open up the upside.
  • USDCHF: The low today stalled just ahead of the low from yesterday’s trade at 0.9162 (low today reached 0.91639). Ahead of that level on the downside sits the 50% retracement of the range since September 15 which comes in at 0.9173. Get below each of those levels should solicit more downside momentum. On the topside watch price action above the 0.9202. That was the broken 38.2% retracement of the same range since September 15
  • USDCAD: The USDCAD trades just above its low from September 22 at 1.32827, and swing lows from today which ranged 1.32789 to 1.3283. There our 7 different hourly bar lows that bottomed in at 4-5 pip range today.  Break below should solicit more selling. On the topside the high price today at 1.33214 was just short of the swing low going back to September 24 at 1.33238. A move above that area should solicit more buying.
  • NZDUSD: The 50% retracement of the range since September 18 high comes in at 0.66539.  A break above that level with momentum should solicit more buying. The earlier high for the day took a peek above the level only to fail (high reached 0.6656).
  • AUDUSD: The AUDUSD stalled at the high today against a topside channel trendline. That trend line is now higher (around 0.74165 and moving higher). It would take a move above that level to solicit more buying. On the downside the lower channel trendline comes in at 0.7150. Break and stay below that line (it is rising) would be more bearish and should solicit more selling.

(more…)

European shares close mostly higher

  
Analysis, Global Indices

German DAX a downside exception

The European shares are closing mostly higher. The exception is the German DAX which is trading down about -0.4%. The provisional closes are showing:

  • German DAX, -0.4%
  • France’s CAC, +0.2%
  • UK’s FTSE 100, +0.2%
  • Spain’s Ibex, +0.2%
  • Italy’s FTSE MIB, +0.3%
In the European debt market, the benchmark 10 year yields are mostly lower. The exception is the UK 10 year which is up 1.3 basis points.
German DAX a downside exception_

Politco: Chances for a Pelosi-Mnuchin deal are ‘looking quite grim’

  
  Analysis

No deal on the menu

Risk trades are at risk here.
The question then becomes how well can the US economy do in the coming months and whether there’s a chance for a deal in the lame duck session.
On my read in the polls, the Democrats are well ahead. With no deal, it raises the stakes for the election because if they can sweep, they can author a new stimulus package in January — something I’m sure they would do. However if they don’t get all three chambers, then there’s a risk of a Republican Senate blockade.

Oil breaks the lows of the week in quick fall

  
Analysis, Crude

Crude takes a tumble

WTI crude has quickly fallen to the lows of the day, down $1.82 to $38.35.
The drop breaks lows from this week and from Sept 21 that had been acting as support.
Crude takes a tumble
The response from the Canadian dollar so far has been mum, perhaps due to a jump in Canadian natural gas prices today. I would expect USD/CAD to rise but the market is closely watching the US stimulus front right now.
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