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Finance Update – Electoral Clouds Dispersing

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Americas – Good data, questionable karma

As the world looks on, US indices all expressed optimist with the NASDAQ closing 3.85% up. The Russel was less excited – it only added 0.02%.

Mortgage applications in October more than doubled to 3.8%, but the ADP’s employment change figure was halved at 365k new jobs, while the trade surplus contracted but missed estimates by $100mn. Markit’s PMIs exceeded expectations, but the ISM services figure contracted by over a point.

With the FED expected to announce its upcoming monetary policy tonight, little is expected as the President turns to the courts to fight a losing battle.

Asia – Xi: enough slander

Asia is in the green this morning, the Hang Seng up 2.71%. Shares in China and the Yuan maintained their pace as President Xi Jinping yesterday affirmed the economy’s improvement. He called for international cooperation rather than “slander”.

The yen is up a fraction after the overnight service PMI added nearly a point to 47.7 in October. Business confidence in New Zealand contracted to -15.6, while in Australia huge 6% contraction in imports but a 3.9% expansion MoM in exports from last month’s 4% contraction left the economy with a $563m trade surplus in September – a fifth of August’s.

Europe – BoE increases spending

European benchmarks all closed higher yesterday – Russia’s WTSI leading the pack with a 3.63% gain.

The Euro is up 0.13% against the dollar after all European service, and composite PMIs surprisingly increased, except Britain, where services lost nearly a point at 51.4 in October. The EU’s producer inflation marker also improved slightly. This morning, Germany reported a 0.5% increase in factory orders MoM, compared to the expected 2% and down from August’s 5%.

The Bank of England announced a higher-than-expected increase to its asset purchase facility – £875 bn going forward as the nation enters its second lockdown and the government extends its furlough scheme beyond December. Interest rates remained at 0.1% despite a report in the Telegraph that negative rates were being considered.

Commodities – Norway to curb oil drilling

WTI Oil was impulsively bullish yesterday despite losing nearly 2% over the session after the EIA confirmed yesterday’s drawdown with a better-than-expected 8mB drawdown. Meanwhile, Brent followed Crude down as Norway’s Supreme Court began hearings on limiting offshore drilling licences in the North Sea.

Bitcoin surged past 14K during the day, pushed by election uncertainties to $14.398 this morning and rising – this as Reuters publishes a report stating that exploding fiscal spending by central banks is but a preparation for the launch of institutionally-backed cryptocurrencies.

Corporate – Biogen up 44% on Alzheimer

Biogen soared 43.97% yesterday after the US Food & Drug Administration indicated it would approve its latest Alzheimer’s treatment.

Lufthansa (+2%) yesterday reported a $1.8bn loss in Q3 as it announced restructuring and job cuts. The ArcelorMittal (+2.51%) steelworks announced a 20% drop in sales to $13.27 bn. ING Bank (+3% and down 1% after hours) reported a 7,3% decline in income to €4.3 bn.

Societe Generale (+2.6%), on the other hand, reported a 9.8% increase to €862 mn. In the US, Qualcomm (+2.81%) reported an 8.34 surge in revenues to $8.34 bn and a 26% increase in ESP at $4.52, pushing shares up 14% after hours.

Still ahead, reports from, GoPro, Iron Mountain, Microchip tech., AstraZeneca, Discovery, Lanxess, Duke Energy, Euronext, Galapagos, Siemens, AIG, Commerzbank, and NRG Energy.

Events

10:00 AM GMT EU Retail Sales
12:30 PM GMT US Challenger Job Cuts. Jobless Claims at 1:30. FED policy & rates at 9 PM.
11:30 PM GMT Japan Household Spending & Foreign Investments
00:30 AM GMT (+1) Australia RBA Interest rates & policy
02:00 AM GMT NZ Inflation expectations

Analysis

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