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Finance Update – The World Awaits

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Americas – Tensions tight

US futures are slightly up this morning – a day ahead of the block’s chop and after a week of impressive sell-offs in the equities market that ended with a 2.45% drop in the NASDAQ – other markers close behind.

The USD continues north after Thursday’s 33.1% GDP gain – nearly erasing the COVID’s 36% GDP loss up till now. Also Thursday – Jobless claims once again pleased non the initial n751K but missed on the continuing number, not quite falling enough. Personal consumption in Q3 also added 3.5% after Q2’s contraction, but missed expectations, and pending home sales contracted 2.2% MoM in September.

In Canada, building permits soared by 17% MoM in September.

Asia – China manufacturing soars

Asian indices are moderately optimistic as the week begins – the Nikkei and Kospi up 1.48% followed by Chinese markers at about a per cent and Australia’s ASX at the back with a mere 0.4% rise.

The Yen maintains its safe-haven status in a stormy season as overnight figures Friday show unemployment steady at 3% but consumer inflation continuing to whither alongside housing starts, which contracted by 10% YoY in September. Industrial production surprised to the upside with a 4% increase MoM, but the yearly figure continues in negative territory.

This morning’s Jibun Manufacturing PMI shows a 7-tick increase but still well below the 50 mark, whereas in China, the Caixin figure puts that nation’s manufacturing PMI at 53.6 – its highest since 2011. Saturday’s NBS figure was less enthusiastic, dropping a tenth to n51.4 while services expanded nicely to 56.2.

Australian PPIs managed to expand slightly in Q3, as did building permits in September – 15.4% MoM.

Europe – Brexit talks reconvene

COVID contagion limited itself to a minor loss in the FTSE (-0.08%), AEX (0.1%) , Eurostoxx (-0.06%) and DAX – the worst hit with a 0.36% loss. All others were in the green led by Portugal’s 2.12% rise.

The Euro continues weakly after last week’s ECB meeting that failed to take any relief measures, putting the decision off for next month. Preliminary figures for the EU show a 12.7% increase in GDP MoM for Q3 with unemployment stable at 8.3% across the zone.

Figures are reflected on the national level, with GDP up MoM in France and Germany but French consumer spending down by 5%, retail sales in Germany contracting 2.2% MoM and unemployment dropping a tick to 9.6% in Italy. CPIs are gaining a tad in most areas but not sufficiently to lift the yearly figure into positive territory.

Corporate – EU anti-trust lax on techs

Good news for the tech giants currently facing anti-trust hearings in the US: the EU’s anti-trust head Margrethe Vestager has said she does not see the need to break these companies up, at this point.

Last week, Apple (-5.6%) reported a 1% increase YoY in revenues to $64.7 bn while Google (+3.8%) soared more than 14% YoY and $2bn past expectations to $46.17 bn. EPS hit $16.4 – a 62% increase YoY. Twitter (-21.1%) presented a 13.7% YoY growth in revenues to $936 mn but a steady 4c EPS.

Amazon (-5.45%) reported a 37% increase YoY with 96.15 bn revenues and a $12.37 EPS – nearly double the expected. And Comcast (-1.9%) exceeded expectations with a $15 bn revenue and a better than expected drop in EPS to 65c.

Today, expect quarterly earnings from PayPal, Alliant Energy, FirstEnergy, Mondelez, Siemens, and Westpac in Australia. AT&T and Verizon will be paying dividends

Commodities – Airport Mining

After taking 2 huge plunges – one on Friday the other overnight, oil now rests at 34.50, this after Baker Hughes announced another 10-rig increase in US oil production just as Europe goes into its 2nd lockdown.

Gold continues at the bottom of its 1860-1930 range.

And finally, Bitcoin is maintaining its 13.7K foothold as news comes in of an Italian technician at Italy’s Lamezia-Terme airport in Calabria using the airport’s computer array to mine Ethereum.

Events

8:45AM-3PM GMT Italy, France, Germany, EU, UK, US Manufacturing PMIs
03:00 PM GMT US Construction Spending
03:30 AM GMT (+1) Australia Interest Rate & Policy Statement

Analysis

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