Markets:
- EUR leads, USD lags on the day
- European equities higher; E-minis up 1.8%
- US 10-year yields down 1 bps to 0.753%
- Gold up 1.2% to $1,926.20
- WTI down 0.8% to $38.88
- Bitcoin up 6.4% to $14,899
Archives of “November 2020” month
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European Commission cuts Eurozone 2021 GDP forecast to +4.2% from +6.1%
The European Commission publishes its latest forecasts for the euro area economy – 5 November 2020
- Eurozone 2020 GDP forecast -7.8% (previously -8.7%)
- Eurozone 2021 GDP forecast +4.2% (previously +6.1%)
- Eurozone 2022 GDP forecast +3.0
- Expects Eurozone economy to contract by 0.1% q/q in Q4
- Eurozone inflation 0.3% in 2020
- Eurozone inflation 1.1% in 2021
- Eurozone inflation 1.3% in 2022
The commission adds that the technical assumption for the forecasts is that there will be no trade deal between the EU and UK once the Brexit transition period ends on 31 December. Adding that the forecasts are surrounded by ‘exceptional uncertainty’.
Given recent virus developments, the changes to the projections are very much expected but these are still relatively optimistic in my view. I expect far worse projections given the tigther virus restrictions so the forecasts above may well be outdated.
Anyway, this serves as an anecdote that if the virus situation doesn’t get any better in the coming year, we are going to keep rolling back this downgrade update every quarter.
Stock market returns by president:
US election count in state of Georgia – Trump may ask for a recount if he loses
We should get an update on the tally from Gerogia around 0530GMT.
Its very close, Trump is ahead but the political pundits are still tipping Biden given the trend in votes being counted. Predominantly urban votes going to Biden. The last approx 28K votes counted were 22k for Biden.
While Pennsylvania is not close to finishing counting the trend in those votes remaining to be being is 4 to 1 favouring Biden. Pundits again tipping Biden to take that state (not, tipping,m not actually calling it).
Biden launches a ‘transition’ website in preparation for the presidency
the what appears to be inevitable president-elect Joe Biden is making preparations already.
Has launched the buildbackbetter.com website, link here
UK press says Bank of England QE could be as high as 200bn GBP
Headline from the Sun newspaper … not renowned for their insightful central bank analysis but there you go.
- Says the Bank of England is expected to announce 150bn QE
- But could be as high as 200bn
As a ps. those 150-200 bn figures are an extension of the Bank’s QE program
Eyes on who will take the presidency, but what about the Senate?
It seems most likely that the Republican Party will maintain its hold on the US upper house.
The count is still not finished yet but I’m gonna say its a Republican majority is “most likely”.
There are various implications, of most note for markets though (this in a nutshell) is
- Biden’s tax rises will be opposed
- and, even more importantly for markets further coronavirus economic stimulus will be small scale only
Major indices up for the 3rd straight day. Rise despite election uncertainty
But problems with the small-cap. Russell 2000 index closes unchanged.
The major indices closed sharply higher despite the uncertain election outcome. The NASDAQ index led the way to the upside. Some highlights for the day include:
- Major indices closed higher for the 3rd straight day.
- S&P closed as highest level since June 5
- NASDAQ leads the way changed. Best day nearly 7 months
- small-cap Russell 2000 index closes near unchanged
- record close for S&P healthcare sector
- Dow industrial average is on track for its best week since June
- S&P and NASDAQ on track for the best week since April
The final numbers are showing:
- S&P index rose 74.28 points or 2.2% at 3443.44
- NASDAQ index rose 430.20 points or 3.85% at 11590.78
- Dow industrial average rose 367.63 points or 1.34% at 27847.66
- the Russell 2000 index closed up 0.02% (call it unchanged)
The European shares also rose with the France’s CAC leading the way with a 2.44% gain.
Below is a look at the major indices ranges and changes for the days trading:
Thought For A Day
Fed says FOMC meeting will proceed as scheduled
In case you forgot, there is a Fed meeting this week
The two-day FOMC meeting begins today and the Fed has confirmed that they will proceed as scheduled with the meeting today starting at 0900 ET. The decision will then be announced tomorrow at 1400 ET with a press conference after at 1430 ET.
Given it is election week, don’t expect anything major from the Fed but it will interesting to hear Powell’s thoughts on the outlook as the virus situation worsens in the US.