Key topics to remember:
Over the next year, if you heard the words “problems abroad that are putting pressure on markets,” your eyes look across the Pacific to see which shoes have fallen into U. S. -China industry tensions. the early days of coronavirus, which affected the economies of the Pacific region before spreading to Western economies.
But not today. Today, we are on the other side of the Atlantic to see bad news on two fronts: first, the number of Covid-19 cases has increased across Europe, leading to new measures in options such as France, which has just announced a curfew in Paris and other cities. In Germany, Chancellor Angela Merkel also announced new measures to curb the number of infections: Germany’s DAX fell by almost 3% and the 10-year-old Bund fell to -0. 62%, its lowest point since the depth of the epidemic in March.
Nervousness in the other aspect of the pond is exacerbating national concerns about a federal coronavirus assistance program that has helped stocks for two consecutive days and appears to be contributing to a third day of decline.
If successful, last week’s recovery was based on hopes of reactivation. With this declining optimism, we see cash coming out of stock.
It turns out that a risk-free day is coming, as investors’ considerations about the speed of economic recovery appear to be growing. Domestic oil futures fell below $40 a barrel amid fuel demand considerations.
National economic news in the form of weekly jobless claims isn’t so smart this morning. The latest starting figure for unemployment programs is 898,000, up from Briefing. com’s consensus estimate of 830,000, noting that the US economy, which is a key driver of global wealth, turns out to be far from out of danger.
But to keep things in perspective, the VIX is still below 30 and futures contracts are connected to the S-index
That’s not all that’s going on on the news this morning.
Morgan Stanley (MS) continued the pace of big banks’ earnings reports by exceeding analysts’ top-down estimates, aided by higher revenues from investment banks.
On Wednesday, stocks were recovering in the first place from the slowdown in the previous session, but the time spent in green did not last, as hopes for a stimulus agreement in Congress before next month’s presidential election faded further.
While Treasury Secretary Steven Mnuchin said Democrats and Republicans had made progress, he said the two sides stayed out of some trouble and that it would be difficult to reach an agreement before the election.
On Tuesday, U. S. House Speaker Nancy Pelosi said a $1. 8 trillion package from the Trump administration did not meet the needs. McConnell said the Senate would vote this month on a limited coronavirus assistance program. With the entire department around the issue, it turns out that the fate of this proposal is not certain.
The initial strength on Wednesday is likely due to investors digesting decent earnings reports from the big banks.
Yesterday, S’s consensus estimates
Wednesday became a kind of risk-free day. The VIX rose, the Treasury at 10 years was more sought after and investors resorted to gold as a perceived refuge.
It was therefore attractive to see that the energy sector, considered riskiest, managed to stay in positive territory during the day. The sector appears to have been driven by high oil costs ahead of an Energy Information Administration report that Reuters says is expected to show a drop in crude oil inventories.
A weaker dollar probably also helped oil by stimulating the call to make the dollar-denominated product less expensive for holders of other currencies. And the news of OPEC’s continued commitment to cutting production is also positive.
Below the target: The Fed’s shift to an average inflation target has been a topic of much discussion due to the implications that the central bank will allow inflation to exceed its 2% target without slowing down by rising interest rates. of the economy, it turns out that we are quite far from inflation above 2%. The most recent fundamental index of the value of non-public customers, the Fed’s preferred inflation measure, recorded an annual accumulation of 1. 6% in August. September’s Consumer Price Index, published this week, showed an annual increase of 1. 7%. According to the knowledge of the CPI, Briefing. com said: “The inflation rate is not going to sound the alarm for the Fed. “
Stimulation and inflation: With GDP contracting and unemployment high, it turns out that the economy has a long way to go before approaching problematic inflation levels, and it would possibly take some time for inflation to succeed in the Fed’s target area. One of the things that can also help inflation come sooner, through the stimulation of the economy, is a new coronavirus assistance program that is still hard to reach from Congress. “Despite a recent increase, inflation is still below our long-term target of 2%. “Fed Vice President Richard Clarida said Wednesday in a speech prepared for a speech: “It will take some time to return to the degrees of economic activity and employment that prevailed at the peak of the economic cycle in February, and more financial – and probably fiscal – policy will be needed.
The used vehicle market is growing: inflation is below the Fed’s goal, it’s great to see some turbulence on the inflation front, as some worthwhile improvements would possibly reflect a healthy economy or, in this case, a recovery. According to the report, the used car and truck index jumped 6. 7% to its highest level per cumulative month since the 1960s. People would possibly prefer less expensive used cars to newer and more expensive cars due to the economic recession, but at least they are buying However, with adjustments in the value of clothing and shipping facilities in negative territory and the value of housing emerging through only 0. 1% in September, headline inflation remains moderate.
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I am a leading market venue strata for TD Ameritrade and my career as a market site maker at the Chicago Board Options Exchange, operates mainly on pits S
I am a leading market venue strata for TD Ameritrade and my career as a market site maker at the Chicago Board Options Exchange, operates mainly on pits S