With little data-guidance on offer, the US election less than one month away and Trump struck down with covid-19, how will the markets fare in the first full week of October?
US
Happy to see the back of a rough and rocky September, the markets are getting closer and closer to November 3rd’s US presidential election. The Dow Jones seemed to wait with baited breath ahead of the first televised debate between Donald Trump and Joe Biden, only to find little to grapple with policy-wise in amongst the chaos and cross-talk.
Well now the race has seen another huge twist, with Donald Trump’s covid-19 diagnosis. He likely won’t make the next debate on October 15th, and will miss scheduled rallies in three swing states, including Florida. Yet at the same time, bar the worst case scenario, Trump coming out the other side of a two-week quarantine able to say he survived covid-19 could be hugely appealing to both his base supporters, and a few undecided voters.
The other major issue is where this leaves the covid-19 spending plan. The Democrat-led House of Representatives passed their own $2.2 trillion package last Thursday, which is meaningless without an agreement being reached between Nancy Pelosi and Treasury Secretary Steven Mnuchin. And with Republicans firmly opposed to the deal, a political lockdown due to Trump’s diagnosis – and all the unmasked people he has come in contact with – could further stall negotiations surrounding the much-needed stimulus.
If they don’t want to focus on Trump’s covid-drama, where else can investors turn their attentions to? From a data-perspective there’s isn’t a lot for markets to chew on. The final Markit and ISM services PMIs arrive on Monday, with the JOLTS Job openings reading on Tuesday, the FOMC meeting minutes on Wednesday, and the usual jobless claims number on Thursday.
We’re also not yet fully into Q3 earnings season, though there are early announcements from the likes of Delta Airlines and Domino’s Pizza on Thursday.
UK
Now firmly in October, Brexit might start to become a significant preoccupation for UK investors once again, as the end of the month is the ostensible deadline for a deal to get done.
There’s also the small matter of a nationwide lockdown, which still can’t be ruled out given the pace of covid-19 cases up and down the country.
In terms of data, there’re the final services PMI on Monday, the construction PMI on Tuesday, and a couple of HPI readings on Wednesday.
Friday is then pretty stuffed, with the monthly GDP figure the highlight. The (hopefully) growth reading is joined by the goods trade balance and industrial and manufacturing production numbers.
Wednesday, meanwhile, sees a half year update from Tesco, which may prove to be illustrative to consumers’’ habits in the 2nd in the last few months.
Eurozone
It’s not the most exciting week for Eurozone data, with the region likely more preoccupied with covid-19 numbers than anything else.
If investors do fancy looking elsewhere, there’s the Sentix investor confidence and final services PMIs on Monday; German factory orders on Tuesday; Italian retail sales and French trade balance on Wednesday; German trade balance on Thursday; and French and Italian industrial production on Friday.
