News / Analysis
Finance Update – Pre-Election MiasmaOctober 26, 2020
Asian indices are mostly down this morning, save the Shenzhen Composite that added 0.24% and the Hang Seng with 0.54%.
The Australian dollar continues south on a weakening manufacturing PMI Thursday and despite an impressive improvement in services to 53.8 in October. This morning is showing a near doubling in the nation’s trade surplus to $5.1bn.
The Yen is down after CPIs, though better than expected, continue to contract. Jibun’s manufacturing PMI improved slightly to 48 in its preliminary October reading. Both the nation’s leading and coincidental indices climbed a point but missed expectations.
European indices were up across the board Friday led by the FTSE’s 1.29% after Britain’s Chancellor of the Exchequer, Riki Sunak announced new support measures for pandemic-hit businesses and the Times reported regulators allowing banks to resume paying dividends.
The Euro, however, is down a ½% after European Consumer Confidence lost another 2 points, landing the index at -16.5 and despite excellent manufacturing PMIs Friday from Germany and the EU – a 1-point increase.
Meanwhile, the pound was less damaged by the UK’s consumer confidence index, which lost 6 points to land at -31 Thursday, thanks primarily to impressive retail figures the following day – nearly doubling to 1.5% in September – and a not-as-bad-as-expected 1-point drop in manufacturing.
US indices were mixed Friday, the Nasdaq adding 0.37% and the Dow losing 0.1% before White House Chief of Staff Sunday admitted to CNN that the US has basically given up on controlling the COVID surge.
The US dollar continues gaining after Thursday’s Jobless Claims improved to 7-month lows, and existing home sales increased by a whopping 9.4% in October – up from 2% the month before.
Markit’s manufacturing PMI missed the mark – showing a mere 1-tick improvement to 53.3 in October, while services added a point and a ½ to 56.
Oil fell sharply Friday – nearly $2 a barrel – after the Baker Hughes rig count showed 6 additional units raising the count to 211.
Delta Airlines added nearly a per cent Friday after the US Department for Transport approved its alliance with WestJet. And Renault was down 0.48% after the company said it was ending its collaboration with Fiat Chrysler after the latter finalised its merger with Peugeot. On Friday the company reported an 8% drop YoY in revenues to €10.37 bn.
Daimler added a per cent after hours upon revealing an earnings expectation beat 60c despite €40.28 bn revenues – down 10% from last year. Barclays shares soared by nearly7% after reporting a £610 mn profit, up from last year’s £292 mn loss.
In the US, Intel closed down 5.7% Friday despite meeting expectations due to weak performance in the data-centre division causing a 10% drop Thursday after hours. Coca Cola was down 0.33% after posting a 9% decline in revenues but at 55c beat expectations on earnings. AT&T was down 1.63% after beating revenue expectations but reporting a 19% drop in earnings. And in Australia, Telstra reported a 6% drop in revenue to 26 bn AUD and an 11% increase in earnings thanks to subscription increases.
Today, earnings reports from Hasbro, Unibail, NXP and Arcelik.
|09:00 AM GMT||Germany||Business climate|
|12:30 PM GMT||US||Chicago Fed Activity Index. New Home Sales at 2 PM and Dallas Fed Manufacturing Business Index at 2:30.|
|09:45 PM GMT||NZ||Trade Balance|