Thursday, 31 December 2020

Markets mixed, more lockdowns “likely” amid rising COVID-19 cases

Markets were mixed on Wednesday.

The S&P 500 rose 0.1 percent but the STOXX Europe 600 fell 0.3 percent.

Earlier in Asia, the Shanghai Composite rose 1 percent but the Nikkei 225 fell 0.4 percent.

“We expect strong economic growth to reemerge in 2021 in the wake of headwinds from the pandemic in 2020 and the U.S.-China trade war in 2019,” said Doug Rao, portfolio manager at Janus Henderson Investors.

However, the number of COVID-19 cases in the US continues to rise, with at least 188,167 new cases and more than 2,250 virus-related deaths each day, based on a seven-day average calculated by CNBC.

Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, warned that “the rising Covid cases will likely lead to more regional lockdowns after the holidays”.

Wednesday, 30 December 2020

S&P 500 falls, Nikkei 225 surges

Markets were mixed on Tuesday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 surged 2.7 percent.

COVID-19 remains a concern for investors, with at least 184,000 new infections reported daily in the US over the past week, according to a CNBC analysis.

“Vaccine distribution has now officially begun … yet the pandemic has reached concerning levels on multiple fronts,” wrote Jason Pride, CIO of private wealth at Glenmede.

Still, some analysts are optimistic.

“The combination of vaccine rollouts, fiscal stimulus, and easy monetary policy continues to create a positive backdrop for equities going into 2021,” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management.

Tuesday, 29 December 2020

Markets rise, “pillars of rally remain in place”

Markets rose on Monday.

The S&P 500 rose 0.9 percent, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 rose 0.7 percent.

Markets rose after US President Donald Trump signed a US$900 billion COVID-19 relief bill into law on Sunday.

“The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip-recession) remain largely in place, and until that changes, the medium and longer-term outlook for stocks will be positive,” wrote Tom Essaye, founder of The Sevens Report.

Monday, 28 December 2020

COVID-19 and the global economy

CNBC has five charts that show how the COVID-19 pandemic has affected the global economy.

The key points from the article:

  • Many countries went into months of lockdown in 2020 in a bid to stem the spread of Covid-19, which reduced cross-border travel and accelerated job losses.
  • Governments increased spending to cushion the economic damage, but are now left with a huge debt pile to reckon with in the coming years.
  • Meanwhile, central banks around the world slashed interest rates and purchased more assets to inject more money into the financial system.

Saturday, 26 December 2020

Stocks expected to rise in 2021

While most major stock markets were closed on Friday, the Shanghai Composite rose 1.0 percent.

The Nikkei 225 was flat.

Southwest Securities said in a report that the Shanghai Composite could hit the 4,000-point level in 2021 thanks to China’s solid economic recovery and continued policy support.

The US stock market is also expected to continue advancing into 2021.

A CNBC survey of investment strategists showed that the S&P 500 is expected to end 2021 at 4,056.

Friday, 25 December 2020

Markets rise, Brexit trade deal reached

Markets rose on Thursday.

The S&P 500 rose 0.4 percent, the FTSE 100 rose 0.1 percent and the Nikkei 225 rose 0.5 percent.

The UK and European Union reached an agreement on a trade deal after European markets closed on Thursday. EU Commission President Ursula von der Leyen called the agreement “fair” and a “relief”.

Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said that the deal would help fuel a recovery for the UK economy which, if sustained, “could herald in a new Roaring Twenties era”.

Thursday, 24 December 2020

Markets rise, Brexit talks in “final stages”

Markets were mostly higher on Wednesday.

The S&P 500 rose less than 0.1 percent, the STOXX Europe 600 rose 1.1 percent and the Shanghai Composite rose 0.8 percent.

European markets were buoyed by a report that talks between the European Union and the UK on a Brexit trade deal are in their “final stages”.

“The fact that they are still talking has given another reason to buy into the market,” said David Madden, market analyst at CMC Markets UK.

However, US stocks were weighed down by renewed political uncertainty after President Donald Trump called the new US$900 billion COVID-19 relief package an unsuitable “disgrace” and told lawmakers to alter the bill’s content.

Ed Mills of Raymond James said that “our base case remains that the bill passed by Congress will become law”.

Wednesday, 23 December 2020

Markets mixed, EU in final push for Brexit deal with UK

Markets were mixed on Tuesday.

The S&P 500 fell 0.2 percent and the Shanghai Composite tumbled 1.9 percent.

However, the STOXX Europe 600 rose 1.2 percent as the European Union said it is giving a “final push” in a bid to strike a Brexit trade deal with the UK.

Lingering concerns over COVID-19 kept other markets in check though. The US is under siege from the disease as hospitals are becoming overwhelmed before the festive holidays.

“The whole California ICU capacity has been going down. We are all struggling,” said Dr Imran Mohammed of Sutter Roseville Medical Center.

Tuesday, 22 December 2020

Markets fall amid new travel restrictions

Markets were mostly lower on Monday.

The S&P 500 fell 0.4 percent while the STOXX Europe 600 plunged 2.3 percent.

Earlier in Asia, the Nikkei 225 fell 0.2 percent but the Shanghai Composite rose 0.8 percent.

Oil fell. Brent tumbled 2.6 percent and West Texas Intermediate fell 2.8 percent.

Concerns over the COVID-19 pandemic were renewed after discovery of a new coronavirus variant led several countries in Europe and elsewhere to block travel from the UK.

“Reports of a new strain of the coronavirus have weighed on risk sentiment and oil,” said UBS oil analyst Giovanni Staunovo.

Monday, 21 December 2020

COVID-19: US reaches relief deal, UK tightens restrictions

The S&P 500 rose 1.3 percent last week, its fourth weekly gain in five weeks.

Stocks could start the week on a positive note.

On Sunday, the US Congress reached a deal on a US$900 billion COVID-19 relief package.

On the COVId-19 pandemic itself, however, there was less positive news.

UK Prime Minister Boris Johnson said on Saturday that London and other areas in southern England currently under Tier 3 restrictions will move to an even stricter new Tier 4 that requires non-essential shops, hairdressers and indoor leisure venues to close. A planned five-day easing of socialising rules that would allow up to three households to meet in “Christmas bubbles” will be cancelled for Tier 4 areas.

The move comes as the country's top medical officer announced that the UK has identified a new variant of the coronavirus that “can spread more quickly” than prior strains of the virus. New COVID-19 cases in the UK rose more than 40 percent last week compared to the prior week.

Globally, COVID-19 infections passed 75 million on Saturday.

Saturday, 19 December 2020

Markets fall, BoJ extends pandemic programme

Markets fell on Friday.

The S&P 500 fell 0.4 percent, the STOXX Europe 600 fell 0.4 percent and the Nikkei 225 dipped 0.2 percent.

Markets were weighed down by the lack of progress in talks on US fiscal stimulus and a post-Brexit trade deal.

The Bank of Japan on Friday announced a six-month extension of its special programme aimed at easing corporate financing pressures amid the COVID-19 pandemic. Meanwhile, the yield target on the 10-year Japan government bond was set at around zero percent while the short-term interest target was set to minus 0.1 percent.

Friday, 18 December 2020

S&P 500 at record high, US jobless claims rise

Markets rose on Thursday, with the S&P 500 gaining 0.6 percent to close at a record high.

Investors shrugged off a report showing that US jobless claims totalled 885,000 last week, the highest level since early September.

“Until COVID is more under control, claims are going to continue to be elevated,” Thomas Simons, money market economist at Jefferies, wrote in a note.

On Wednesday, the US recorded more than 247,000 new COVID-19 infections.

Thursday, 17 December 2020

Markets rise, Fed commits to more bond buying

Markets rose on Wednesday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 0.3 percent.

The Federal Reserve left interest rates near zero at its monetary policy meeting on Wednesday and said it would buy at least US$120 billion of bonds each month “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals”.

The Fed decision came even as Fed officials elevated their outlook on the economy. The median expectation for US GDP in 2020 is now a decline of 2.4 percent compared with the 3.7 percent decline in September.

At the news conference after the meeting, Fed Chairman Jerome Powell said in response to a question that asset prices are “a little high” but is not concerned because interest rates are low.

In Europe, stocks rose as the EU signalled progress in talks over a post-Brexit trade agreement with the UK. “There is a path to an agreement now,” European Commission President Ursula von der Leyen said on Wednesday.

Wednesday, 16 December 2020

Markets rise, to “march higher in 2021”

Markets were mostly higher on Tuesday.

The S&P 500 rose 1.3 percent and the STOXX Europe 600 rose 0.3 percent.

Earlier in the day, though, Asian markets were mostly lower, with the Nikkei 225 down 0.2 percent.

“We may have already gotten a little bit of a Santa Claus rally,” said David Waddell, chief investment strategist at wealth advisory firm Waddell and Associates. “I wouldn’t be surprised...if the market consolidated its gains a little bit.”

Nobel Prize-winning economist Robert Shiller said that the stock market is “highly priced, but it’s not so high that I wouldn’t consider it as an investment”.

Brian Belski, chief investment strategist of BMO Capital Markets, thinks that “stocks will continue their march higher in 2021”.

Tuesday, 15 December 2020

Markets mixed, more COVID-19 lockdowns loom

Markets were mixed on Monday.

The S&P 500 fell 0.4 percent but the STOXX Europe 600 rose 0.4 percent and the Shanghai Composite rose 0.7 percent.

US stocks fell as New York City Mayor Bill De Blasio warned on Monday that the city could experience a “full shutdown” soon.

In the UK, the government announced on Monday that London will be placed on England’s toughest tier of COVID-19 restrictions.

“These are lockdowns that are hurting global growth,” said Quincy Krosby, chief market strategist at Prudential Financial.

Still, some analysts remain sanguine.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said that the introduction of COVID-19 vaccines will support “a return to more normal levels of economic and social activity”, so for global equities, “there is further upside to come”.

Monday, 14 December 2020

Stocks fall amid “excessively high” optimism

The S&P 500 fell 1 percent last week, its first weekly decline in three weeks.

Canaccord Genuity’s chief market strategist Tony Dwyer told CNBC last week that stock market optimism “is excessively high” and that the market is ripe for a sharp pullback in the near term.

However, Dwyer himself is optimistic for the longer term. “With the combination of excess liquidity and a synchronized global recovery, I think it’s set up for a pretty good year,” he said.

Similarly, Federated Hermes chief equity market strategist Phil Orlando told CNBC that there “could be some more chop over the next week or so” but that “we’re going to get through some of these hurdles near term and get to that 3,800 level by the end of the year”.

In Europe, the STOXX Europe 600 also fell 1 percent last week, ending a five-week winning streak.

European stocks were weighed down by a stalemate in talks between the European Union and the UK that raised chances of the latter leaving the bloc without a trade deal.

European Commission President Ursula von der Leyen said on Sunday that the talks will be extended beyond Sunday’s deadline.

Another major concern is the COVID-19 pandemic. Even while vaccines are being rolled out, lockdowns being imposed in the meantime throughout Europe threaten to derail the economic recovery.

On Sunday, Germany Chancellor Angela Merkel said that the country will close most stores from Wednesday until at least 10 January.

“The situation is out of control,” said Bavaria’s prime minister Markus Soeder.

Saturday, 12 December 2020

Markets fall, no progress on US fiscal stimulus and Brexit trade deal

Markets fell on Friday.

The S&P 500 fell 0.1 percent, the STOXX Europe 600 fell 0.8 percent and the Nikkei 225 fell 0.4 percent.

US fiscal stimulus talks ended on Thursday without showing signs of progress towards an agreement.

“Optimism surrounding a near-term fiscal stimulus deal are fading despite reports of a bipartisan deal, as the sides can agree on the size of a deal, but not the details,” wrote Mark Hackett, chief of investment research at Nationwide.

Meanwhile, in Europe, Brexit trade negotiations also show no sign of progress.

“Time is running out and we need to prepare for a hard Brexit,” said Italian Prime Minister Giuseppe Conte.

Friday, 11 December 2020

Markets fall, ECB expands bond buying

Markets were mostly lower on Thursday.

The S&P 500 dipped 0.1 percent and the STOXX Europe 600 fell 0.4 percent.

Earlier in Asia, the Nikkei 225 fell 0.2 percent while the Shanghai Composite was flat.

Commerce Street Capital CEO Dory Wiley said that “after such good returns in clearly a terrible fundamentals year, I think taking some profits and moving to cash, not bonds, makes some sense here”.

The European Central Bank announced on Thursday that it is increasing the overall size of its Pandemic Emergency Purchase Programme by 500 billion euros as it lowered its forecast for 2021 eurozone GDP growth to 3.9 percent from 5 percent in September.

“Central bankers have flooded bank balance sheets, but those funds are not flowing through the economy normally,” said Aaron Anderson, SVP of Research at Fisher Investments.

Meanwhile, a meeting between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen to discuss a Brexit trade deal on Wednesday yielded no breakthrough.

Thursday, 10 December 2020

Markets mixed, US COVID-19 sets records, Brexit deal “inevitable”

Markets were mixed on Wednesday.

The S&P 500 fell 0.8 percent but the STOXX Europe 600 rose 0.3 percent.

Earlier in Asia, the Shanghai Composite fell 1.1 percent but the Nikkei 225 rose 1.3 percent.

“I think we’re having a bit of a digestion day after hitting new highs,” said Keith Lerner, chief market strategist at Truist, on the US market decline.

Not helping market sentiment is the continuing rise in COVID-19 cases in the US, with the daily death toll passing 3,000 for the first time on Wednesday and hospitalisations for the disease hitting a new all-time high.

In Europe, stocks finished off session highs as Brexit talks between the UK and the European Commission showed no sign of progress, although Oliver Brennan, senior macro strategist at TS Lombard, opined that an agreement “is inevitable”.

Wednesday, 9 December 2020

Markets rise, US COVID-19 cases pass 15 million

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.3 percent to a record high and the STOXX Europe 600 rose 0.2 percent. However, the Nikkei 225 fell 0.3 percent.

Even as US COVID-19 cases passed 15 million, investors were encouraged by more positive news on vaccines and fiscal stimulus talks.

“As a whole, there are reasons to be optimistic,” said Matt Lloyd, chief investment strategist at Advisors Asset Management.

Tuesday, 8 December 2020

Markets fall as US COVID-19 cases hit record high

Markets fell on Monday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.3 percent and the Nikkei 225 fell 0.8 percent.

Markets fell after the seven-day average number of COVID-19 cases in the US hit a record high.

“Although vaccine approval in the U.S. appears imminent, increased restrictions or shutdowns in the U.S. could slow the near-term recovery in economic growth,” Goldman Sachs equity strategists wrote on Monday.

Still, analysts are hopeful for the longer term.

“The economy could be booming next spring if enough of us are inoculated against the virus,” said Ed Yardeni, president of Yardeni Research.

Monday, 7 December 2020

US faces “rough months ahead” from COVID-19

The S&P 500 rose 1.7 percent last week to a record high. It was its fourth weekly gain in five weeks.

Optimism over the release of COVID-19 vaccines helped drive the rally in stocks despite a disappointing US jobs report on Friday.

Still, COVID-19 cases continue to rise in the US, with hospitalisations for the disease hitting a record high on Sunday.

Also, a report published last week by the Institute for Health Metrics and Evaluation at the University of Washington’s School of Medicine said that the number of people in the US killed by COVID-19 could nearly double in the next several months despite a nationwide vaccine rollout.

“Mass scale-up of vaccination in 2021 means we have a path back to normal life, but there are still a few rough months ahead,” IHME Director Christopher Murray said in a statement.

Saturday, 5 December 2020

Markets rise despite “grim” US jobs report

Markets mostly rose on Friday.

The S&P 500 rose 0.9 percent to a record high and the STOXX Europe 600 rose 0.6 percent. However, the Nikkei 225 fell 0.2 percent.

Investors shrugged off a report on Friday that showed that the US economy added 245,000 jobs in November, well below expectations.

Charlie Ripley, senior investment strategist at Allianz Investment Management, said that the report “is beckoning lawmakers to act on additional fiscal stimulus measures”.

Indeed, president-elect Joe Biden described the employment report as “grim”.

“If we don’t act now, the future will be very bleak,” he said.

Friday, 4 December 2020

Markets little changed, poised for “good end to 2020”

Markets were mostly little changed on Thursday.

The S&P 500 dipped less than 0.1 percent and the Shanghai Composite fell 0.2 percent. The STOXX Europe 600 was flat.

While the S&P 500 pulled away slightly from the record high set on Wednesday, Ally Invest’s chief investment strategist Lindsey Bell told CNBC on Wednesday that with more fiscal stimulus expected and resilient consumer spending, “it will be a good end to 2020” for stocks.

Similarly, Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, said that US government stimulus and Federal Reserve monetary policy are helping cushion the economy from the impact of COVID-19 and that “the economy will be supportive for markets for some time”.

Thursday, 3 December 2020

S&P 500 hits record high as US faces “most difficult” period

Markets were mixed on Wednesday.

The S&P 500 rose 0.2 percent to a record high. However, the STOXX Europe 600 slipped 0.1 percent, as did the Shanghai Composite.

“The beginning of Covid-19 vaccinations is getting close, bringing ‘buy on any dip’ to the forefront,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

In the meantime, though, the pandemic continues to wreak havoc, not least in the US, where the number of people in hospitals for the disease now exceeds 100,000.

“I don’t think we’ve ever seen this number,” said Dr Janis Orlowski, chief health care officer at the Association of American Medical Colleges. “We’re headed into a bad, bad, bad two or three weeks.”

Indeed, Dr Robert Redfield, the director of the Centers for Disease Control and Prevention, said on Wednesday that the next few months will be among “the most difficult in the public health history of this nation”.

Wednesday, 2 December 2020

S&P 500, US COVID-19 hospitalisations hit record high

Markets rose on Tuesday.

The S&P 500 rose 1.1 percent to a record high, the STOXX Europe 600 rose 0.7 percent and the Shanghai Composite jumped 1.8 percent.

Analysts were optimistic, with Mark Haefele, CIO of UBS Global Wealth Management, seeing “further upside for global equities in this environment” while Tom Lee of Fundstrat Global Advisors wrote that “December looks like it will be a very strong finish for 2020”.

However, with COVID-19 infections still soaring in the US and hospitalisations hitting a record high of nearly 96,000 on Tuesday, Credit Suisse’s chief US equity strategist Jonathan Golub suggested that investors wait until after December before putting more money into the market.

“They’re a reasonably decent headwind for things like Christmas sales, which are really important,” said Golub.

Tuesday, 1 December 2020

Markets fall after strong November gains

Markets fell on Monday.

The S&P 500 fell 0.5 percent, the STOXX Europe 600 fell 1.0 percent and the Shanghai Composite fell 0.5 percent.

Despite the fall on Monday, the S&P 500 rose 10.8 percent in November, its biggest monthly gain since April.

“The length and strength of the current rally suggests to us that the market could be vulnerable to some pullback at these levels,” wrote John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.

Also, the COVID-19 pandemic remains a concern after the US recorded 10,000 coronavirus deaths and over 1.1 million new cases last week. Hospitalised COVID-19 patients reached a record high of nearly 93,000 on Sunday, up 11 percent from the previous week.

The STOXX Europe 600 surged nearly 14 percent in November, its biggest monthly gain on record.

However, with the deadline for a deal between the UK and the European Union just five weeks away, Craig Erlam, senior market analyst at OANDA Europe, said that “time is fast running out and you have to wonder how long it can go on before we see a wobble in the markets”.

China’s National Bureau of Statistics announced Monday that the official manufacturing PMI for November was at 52.1, indicating a ninth consecutive month of expansion.

Monday, 30 November 2020

S&P 500 hits record as COVID-19 vaccines beckon

The S&P 500 rose 2.3 percent last week, closing on Friday at a record high.

Investors shrugged off the continuing rise in COVID-19 cases in the US. As of Saturday evening, more than 138,000 new cases and 1,100 deaths had been reported, according to Johns Hopkins University.

Instead, investors focused on the hope that vaccines will be rolled out soon.

Indeed, on Friday, the Federal Aviation Administration announced that it has supported the “first mass air shipment” of a COVID-19 vaccine.

Meanwhile, investors also can look forward to the historically-positive year-end period for the stock market.

Capital Wealth Planning’s Jeff Saut told CNBC last week that the S&P 500 could hit 4,000 before year-end.

“Earnings are going to continue to come in better than most people think,” he said.

Saturday, 28 November 2020

Markets rise, environment for risk assets “getting better and better”

Markets rose on Friday.

The S&P 500 rose 0.3 percent to a record high, the STOXX Europe 600 rose 0.4 percent and the Shanghai Composite rose 1.1 percent.

With several COVID-19 vaccines expected to be rolled out over the next few months, Bill Northey, senior investment director at US Bank Wealth Management, said that “that is going to allow pent-up economic activity to return”.

Mike Zigmont, head of trading and research at Harvest Volatility Management, said that the “environment for risk assets has been getting better and better”.

Adding to the positive mood, China reported on Friday that industrial profits surged 28.2 percent year-on-year in October.

Friday, 27 November 2020

Markets mixed, “death rate will double” in the US after Thanksgiving

Markets were mixed on Thursday.

The STOXX Europe 600 fell 0.1 percent but the Nikkei 225 rose 0.9 percent. The US stock market was closed for a holiday.

Connor Campbell, a financial analyst at Spreadex, said that “the wider market is still in an uptrend” but acknowledged that “there are plenty of negative headlines out there for investors to wait and think of the near-term effects”.

Indeed, COVID-19 remains on the minds of many as Chancellor Angela Merkel said that Germany will face restrictions on public life for the foreseeable future while UK health minister Matt Hancock announced that several parts of England will be forced to live under the toughest category of COVID-19 restrictions when a national lockdown ends on 2 December.

In the US, the number of Covid-19 patients in hospitals hit a record for the 17th straight day Thursday.

And with many Americans ignoring the CDC's recommendation not to travel for Thanksgiving, experts expect infections to surge further.

“I expect that the daily death rate will double in the next 10 days,” said Dr Jonathan Reiner, a professor of medicine at George Washington University. “We'll be seeing close to 4,000 deaths a day.”

Thursday, 26 November 2020

Markets fall, positive news “discounted”

Markets fell on Wednesday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 dipped 0.1 percent and the Shanghai Composite fell 1.2 percent.

“A lot of future positive news regarding the economy and the virus has already been discounted,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

There was some relief on the COVID-19 front, with the World Health Organization reporting that the global acceleration in case incidence has slowed down over the past week, with around 4 million new cases recorded. However, death rates continued to increase, with more than 67,000 new deaths reported across the world.

The number of new cases reported in the European region, which had the highest number of cases globally, declined by 6 percent to 1.77 million in the past week after a decline of 10 percent in the previous week. Some countries are already considering easing restrictions, at least over the Christmas period.

Still, Ursula von der Leyen, president of the European Commission, warned on Wednesday: “Relaxing too fast and too much is a risk for a third wave after Christmas.”

Meanwhile, though, the US reported over 1.1 new million cases, a 14 percent increase from the previous week, while deaths increased by 23 percent with 9,918.

Wednesday, 25 November 2020

US stocks hit record highs on hopes for COVID-19 vaccine

Markets rose on Tuesday.

The S&P 500 jumped 1.6 percent to a record high, the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 surged 2.5 percent to its highest level since 1991.

Oil rose, with US crude up 4.3 percent and Brent up 4.0 percent.

Concerns over the COVID-19 pandemic receded somewhat amid encouraging news that vaccines will be available soon.

“The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Tuesday, 24 November 2020

Markets mixed, await COVID-19 vaccines

Markets were mixed on Monday.

The S&P 500 rose 0.6 percent and the Shanghai Composite rose 1.1 percent but the STOXX Europe 600 slipped 0.2 percent.

Adam Crisafulli of Vital Knowledge suggested that optimism over the potential impending availability of three vaccines for COVID-19 “is more than offsetting the very grim near-term transmission/mitigation landscape”.

Bert Colijn, senior economist for the euro zone at ING, said that “some form of lockdown in December will continue to depress economic output before things actually start getting better”.

Monday, 23 November 2020

Stocks fall, government debt rises

The S&P 500 fell 0.8 percent last week, its first weekly decline in three weeks.

The surge in COVID-19 cases continued to be a concern for investors.

The US reported more than 3 million new cases between November 1 and 22. Hospitalisations for COVID-19 hit record highs for 12 consecutive days to Saturday.

The US has been slow to implement restrictions to slow the spread of the virus but even Europe’s response to the pandemic has been criticised by the World Health Organization for being “incomplete”.

“They missed building up the necessary infrastructure during the summer months, after they brought the first wave under the control,” said the WHO’s David Nabarro. “Now we have the second wave. If they don’t build the necessary infrastructure, we’ll have a third wave early next year.”

Also missed during better times have been government debt reduction. Now, with the pandemic, debt has been escalating among developed countries as they implement fiscal stimulus to support the economy.

“No government is making hay while the sun shines. In other words, when growth has been strong, governments have not cut down their debt levels. So they’re going higher and higher,” said Sonja Gibbs, the Institute for International Finance’s managing director of global policy initiatives, who warned of increasing dangers for investors who invest in government bonds.

Saturday, 21 November 2020

Markets mixed, await vaccines amid spiking COVID-19 cases

Markets were mixed on Friday.

The S&P 500 fell 0.7 percent but the STOXX Europe 600 rose 0.5 percent.

Earlier in Asia, the Shanghai Composite rose 0.4 percent but the Nikkei 225 fell 0.4 percent.

Aaron Clark, portfolio manager at GW&K Investment Management, said that the market is wrestling with spiking COVID-19 cases and the resulting shutdown measures.

However, Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management, said that “any market downside is going to be supported by the reality that you do have very effective vaccines that are going to be available in the not-so-distant future”.

Friday, 20 November 2020

Markets mixed as COVID-19 vaccine hopes give way to restriction concerns

Markets were mixed on Thursday.

The S&P 500 rose 0.4 percent but the STOXX Europe 600 fell 0.8 percent.

Earlier in Asia, the Shanghai Composite rose 0.5 percent but the Nikkei 225 fell 0.4 percent.

“You see the market really kind of wanting to move in one direction, and then I think the vaccine news was certainly a catalyst to accelerate that a little bit,” said Jeff Mills, chief investment officer at Bryn Mawr Trust.

Still, the near-term economic impact of the COVID-19 pandemic continued to worry some investors.

“We are now facing the biggest number of economic restrictions since the spring, and that will weigh on economic growth and, potentially, earnings,” wrote Tom Essaye, founder of The Sevens Report.

“With infection and hospitalisation rates rising, and the risk that current lockdown restrictions either remain in place, or get extended into 2021, the probability that any economic damage will become permanent is only likely to increase,” Michael Hewson, chief market analyst at CMC Markets said in a note.

Thursday, 19 November 2020

Markets mixed, US seeing “unrelenting spread” of COVID-19

Markets were mixed on Wednesday.

The S&P 500 fell 1.2 percent but the STOXX Europe 600 rose 0.4 percent.

Earlier in Asia, the Nikkei 225 fell 0.7 percent but the Shanghai Composite rose 0.4 perecnt.

Pfizer released the final data on its vaccine candidate with BioNTech, which showed the vaccine was 95 percent effective in preventing Covid-19, better than the initial data, and fended off severe infection.

Still, the continuing surge in COVID-19 cases in the US remained a concern for investors, as deaths from the virus passed 250,000 on Wednesday.

“This is the worst rate of rise in cases that we have seen in the pandemic in the United States,” said Dr Brett Giroir, assistant secretary for health. “And, right now, there's no sign of flattening.”

Indeed, all 50 states plus Washington, DC, the US Virgin Islands and Guam reported increases in coronavirus cases on Wednesday over the past 14 days.

The White House coronavirus task force stated in its latest weekly report that there is “now aggressive, unrelenting, expanding broad community spread across the country, reaching most counties, without evidence of improvement but rather, further deterioration”.

Wednesday, 18 November 2020

Markets fall, euro zone faces double-dip recession

Markets mostly fell on Tuesday.

The S&P 500 fell 0.5 percent and the STOXX Europe 600 fell 0.2 percent.

Earlier in Asia, markets were mixed. The Nikkei 225 rose 0.4 percent but the Shanghai Composite fell 0.2 percent.

“Euphoria is understandable, but unsustainable,” strategists at French bank Societe Generale wrote in a note. “The surge of COVID cases in the US and Europe’s second lockdown guarantee global economic weakness for several more months.”

Similarly, Felicity Emmett, a senior economist at ANZ, wrote in a Tuesday note that “the current virus surge is stifling near-term growth prospects”.

Indeed, a Reuters poll showed that economists think that the euro zone is on track for a double-dip recession.

Tuesday, 17 November 2020

Markets rise as another prospective COVID-19 vaccine reported

Markets rose on Monday.

The S&P 500 and the STOXX Europe 600 both rose 1.2 percent while the Nikkei 225 surged 2.1 percent.

Oil rose, with US crude rising 3.0 percent and Brent gaining 2.4 percent.

Markets were boosted after Moderna said its prospective vaccine was 94.5 percent effective in preventing COVID-19.

Still, with increasingly strict limits on social gatherings and commercial activity being announced in the US recently, Andrew Mies, chief investment officer at 6 Meridien, said: “You are definitely going to see the economy have another dip, another weak spot, and they are going to have to address that with extended unemployment because a lot of people are out of work and aren’t going to see any income coming in.”

Monday, 16 November 2020

S&P 500 and US COVID-19 set record highs

The S&P 500 rose 2.2 percent to a record high last week even as the COVID-19 pandemic continued to rampage across the US.

According to data from John Hopkins University, the US surpassed 11 million COVID-19 cases on Sunday. It set a new record-high number of patients hospitalised with the disease on Saturday.

"We are in the worst moment of this pandemic to date. The situation has never been more dire," Michigan Governor Gretchen Whitmer said on Sunday in announcing new restrictions, one of several states to do so in recent days.

Expectations for the release of a vaccine soon kept the stock market rally going though after Pfizer reported early last week that their COVID-19 vaccine was more than 90 percent effective in preventing the disease.

While a vaccine could indeed help the economy recover, experts cautioned that it may take a while for it to actually become available.

And then there is the view of Bank of America that investors should actually sell upon the vaccine’s availability.

"We are sellers-into-strength into vaccine [rollout] in coming months," it said on Friday.

Saturday, 14 November 2020

S&P 500 hits record high amid new COVID-19 restrictions

Markets were mixed on Friday.

The S&P 500 jumped 1.4 percent to close at a record high but the STOXX Europe 600 was flat and the Shanghai Composite fell 0.9 percent.

“This week’s positive vaccine news is a game-changer in our view, as it allows the market to look through the recent surge in COVID-19 cases to the impending end of the pandemic and broader reopening of the economy,” wrote Marko Kolanovic, JPMorgan’s head of macro quantitative and derivatives strategy.

Indeed, stocks rose in the US even as new restrictions are being imposed to suppress the spread of COVID-19.

“We are in a life-or-death situation, and if we don’t act right now, we cannot preserve the lives, we can’t keep saving lives, and we will absolutely crush our current health care system and infrastructure,” Governor Michelle Lujan Grisham of New Mexico said in imposing a two-week stay-at-home order.

Oregon Governor Kate Brown ordered a two-week “freeze” starting Wednesday, under which all businesses will be required to close their offices to the public and mandate work-from-home “to the greatest extent possible.”

However, with deaths from COVID-19 having climbed to about 1,000 a day on average and projected to reach nearly 439,000 by 1 Mar, Dr Michael Fine, former director of Rhode Island’s Health Department, said: “Short of very profound lockdowns, I don’t think we have a chance of slowing the spread.”

Friday, 13 November 2020

Markets fall as recovery enters “challenging” months

Markets were mostly lower on Thursday. The S&P 500 fell 1.0 percent and the STOXX Europe 600 fell 0.9 percent.

Earlier in Asia, markets were mixed. The Nikkei 225 rose 0.7 percent but the Shanghai Composite dipped 0.1 percent.

“The sell-off globally is being driven by the sharp spike in new coronavirus cases,” said Oliver Pursche, president of Bronson Meadows Capital Management.

Indeed, some economists think the US economy may already be taking a turn for the worse.

Gregory Daco, chief US economist at Oxford Economics, said that its broad index of the recovery “is reeling” after declining for four consecutive weeks.

Fed chair Jerome Powell said on Thursday that while he still sees the US recovery on a “solid path”, he acknowledged that “the next few months could be challenging”.

Thursday, 12 November 2020

Markets rise, “very cavalier” about COVID-19 risk

Markets rose on Wednesday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 rose 1.1 percent and the Nikkei 225 rose 1.8 percent.

While the latest rally in stocks was sparked by Pfizer and BioNTech’s announcement that their COVID-19 vaccine was more than 90 effective, Carl Tannenbaum, chief economist at Northern Trust, cautioned that the vaccine will not result in an “instant stimulus” to the US economy.

“On the employment front, we still have 10 million Americans that were working in January that are not working today. And those that remain unemployed are seeing a much longer track back to full employment, so they will continue to need a certain amount of support,” said Tannenbaum.

Indeed, CNBC’s Jim Cramer remains concerned about COVID-19.

“I think this market’s being very cavalier about the fact that we’re running at more than 130,000 new cases per day,” he said.

Wednesday, 11 November 2020

Markets mixed amid increased hope for economic recovery

Markets were mixed on Tuesday.

The S&P 500 dipped 0.1 percent while the STOXX Europe 600 rose 0.9 percent.

Earlier in Asia, the Nikkei 225 rose 0.3 percent but the Shanghai Composite fell 0.4 percent.

“The strong results from the Pfizer vaccine were better than most expected and means we could be opening back up sooner than expected,” said Ryan Detrick, chief market strategist at LPL Financial.

Terry Sandven, chief equity strategist at US Bank Wealth Management, said that “near term, with signs of economic improvement on the horizon, we’re going to see cyclical companies outperform”.

Tuesday, 10 November 2020

Markets rise on COVID-19 vaccine news

Markets rose on Monday.

The S&P 500 rose 1.2 percent, the STOXX Europe 600 surged 4.0 percent and the Nikkei 225 jumped 2.1 percent.

US crude oil surged 8.5 percent and Brent rose 7.5 percent.

Markets were buoyed by news that Pfizer and BioNTech reported that their COVID-19 vaccine was more than 90 percent effective in preventing the disease among those without evidence of prior infection.

Paul Craig, portfolio manager at Quilter Investors, said the news marked a “first major step back to normality”.

Indeed, it will be much-needed, as the COVID-19 pandemic rages across the US, which reported more than 770,000 new cases in the week ended 10 November, up 34 percent over the previous seven days.

Monday, 9 November 2020

Stocks rally even as COVID-19 cases rise past 50 million

The S&P 500 rose 7.3 percent last week, its biggest weekly increase since April.

Most media attention last week was on the US presidential election, which former vice president Joe Biden ultimately won.

“The market is just getting more comfortable with the outcome of a divided government, where we see a continuation of political gridlock [and] no meaningful changes on tax policy,” said Dan Eye, head of asset allocation and equity research at Fort Pitt Capital Group.

Markets largely shrugged off the potential impact of the COVID-19 pandemic last week.

That may yet turn out to be a mistake, as global infections passed 50 million on Sunday.

Europe, with about 12 million cases, is the worst affected region, with countries such as Germany, France and the UK in various degrees of lockdown.

The US, which passed 10 million cases on Sunday, is the worst affected country. It reported a record 131,420 COVID-19 cases on Saturday and president-elect Joe Biden pledged on Saturday to make tackling the pandemic a top priority.

Saturday, 7 November 2020

Markets mixed, US records “amazing” Oct job growth

Markets were mixed on Friday.

The S&P 500 was flat, the STOXX Euroe 600 fell 0.2 percent and the Nikkei 225 rose 0.9 percent.

A stronger-than-expected US jobs report failed to give US stocks much lift.

The Labor Department reported that nonfarm payrolls increased by 638,000 in October and the unemployment rate was at 6.9 percent.

“The strength of this report is really amazing in the face of rising coronavirus cases,” said Michael Arone, chief investment strategist at State Street Global Advisors.

However, some economists are worried that the strength may not be sustained.

“I think the risks are pretty high here that the economy backtracks,” said Mark Zandi, chief economist of Moody’s Analytics. “We are suffering a very significant reintensification of the virus...that’s going to start doing some damage.”

Friday, 6 November 2020

Markets rise, US faces split Congress and surging COVID-19

Markets rose on Thursday.

The S&P 500 surged 1.9 percent, the STOXX Europe 600 rose 1.1 percent and the Nikkei 225 jumped 1.7 percent.

“It looks likely that we’ll see a split Congress, which, based on history, has been the preference of the stock market,” said Lindsey Bell, chief investment strategist at Ally Invest, as the US election vote-counting dragged on on Thursday.

Also on Thursday, the Federal Reserve left monetary policy unchanged.

“We’ve gotten through the first five, six months of the expansion better than expected,” said Fed Chair Jerome Powell at a news conference after the two-day policy meeting. “But we have to be humble where we are relative to this disease. It has not gone away.”

Indeed, the US reported a record 114,876 new COVID-19 cases on Thursday. Hospitalisations for COVID-19 reached all-time highs in 16 states on Wednesday.

Thursday, 5 November 2020

Markets rise as US election remains undecided

Markets rose on Wednesday.

The S&P 500 surged 2.2 percent and the STOXX Europe 600 jumped 2.1 percent.

While the US presidential election remained undecided and the possibility of a contested election exists, Tom Essaye, founder of the Sevens Report, said that “we do not see it as a bearish gamechanger”.

Wednesday, 4 November 2020

Markets rise ahead of US presidential election

Markets rose on Tuesday.

The S&P 500 jumped 1.8 percent, the STOXX Europe 600 surged 2.3 percent and the Shanghai Composite rose 1.4 percent.

Markets rose as Americans head for the US presidential election, with former Vice President Joe Biden holding a lead in national polling over President Donald Trump.

“I think that no matter who wins, you have a quick dip and you have to buy,” said CNBC's Jim Cramer.

Similarly, Jim Paulsen, chief investment strategist at the Leuthold Group, said that “after almost a 10% decline in the last month, buying on the dip is back”.

Earlier in the day, the Reserve Bank of Australia reduced its cash rate target to 0.1 percent.

“The cash rate is now really as close to negative as it can be,” said Paul Bloxham, chief economist for Australia, New Zealand and global commodities at HSBC.

Tuesday, 3 November 2020

Markets rise amid positive manufacturing PMI data

Markets rose on Monday.

The S&P 500 rose 1.2 percent, the STOXX Europe 600 jumped 1.6 percent and the Nikkei 225 gained 1.4 percent.

“Even though we’re worried that there could still be one more wave down if we get another big influx of uncertainty, we think the stock market is now setting up nicely for a nice net advance over the next two months or so,” said Matt Maley, chief market strategist at Miller Tabak.

Markets were boosted by positive manufacturing PMI data on Monday.

The Caixin/Markit China manufacturing PMI rose to 53.6 in October from 53.0 in September.

The IHS Markit eurozone manufacturing PMI rose to 54.8 in October from 53.7 in September.

In the US, the ISM manufacturing PMI rose to 59.3 in October from 55.4 in September.

However, with the COVID-19 pandemic still raging around much of the world, Gus Faucher, chief economist at PNC Financial, warned that “the path forward will be more difficult as the economy continues to cope with the pandemic”.

Monday, 2 November 2020

Markets fall amid COVID-19 surge, lockdowns and record hospitalisations

Markets fell last week.

The S&P 500 and the STOXX Europe 600 both fell 5.6 percent.

Oil fell over 10 percent.

The rising number of COVID-19 cases weighed down markets last week and may continue to do so this week.

In Europe, new cases doubled over the past five weeks and propelled the total number of infections to over 10 million on Sunday.

France, Germany and the United Kingdom have announced nationwide lockdowns for at least the next month.

In contrast, in the US, which is seeing a continuing rise in COVID-19 cases with Midwestern states experiencing record hospitalisations, nationwide action to limit the spread has been limited of late.

“We have hospitalizations going through the roof,” said Wisconsin Governor Tony Evers on Sunday. “We absolutely need somebody that understands that this is an issue, it’s a thing. People are dying.”

Saturday, 31 October 2020

Markets mixed, Europe readies new COVID-19 restrictions

Markets were mixed on Friday.

The S&P 500 fell 1.2 percent and the Shanghai Composite fell 1.5 percent but the STOXX Europe 600 rose 0.2 percent.

Strategists at MRB Partners wrote in a note that “mounting new economic restrictions, particularly in Europe, despite being forecastable and in lagged response to the re-acceleration in COVID-19 infections, only caught investors’ attention this week, triggering sharp losses”.

Indeed, EU officials warned Europe to be ready for wider COVID-19 restrictions.

“We need to pull through this, where needed, with restrictions on everyday life to break the chain of transmission,” said EU Health Commissioner Stella Kyriakides.

The US reported a record 91,248 new cases on Thursday and reached its 9 millionth case on Friday.

Friday, 30 October 2020

Markets mixed, ECB to respond “promptly” to COVID-19 second wave

Markets were mixed on Thursday.

The S&P 500 rose 1.2 percent but the STOXX Europe 600 dipped 0.1 percent and the Nikkei 225 fell 0.4 percent.

“The earnings season so far has resulted in significant positive earnings surprises,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

The European Central Bank left interest rates and wider monetary policy unchanged at its monetary policy meeting on Thursday but hinted at more monetary stimulus in December.

“The Governing Council will carefully assess the incoming information, including the dynamics of the pandemic, prospects for a rollout of vaccines and developments in the exchange rate,” the ECB said in a statement.

Noting the rise in COVID-19 cases in Europe, ECB President Christine Lagarde said at a press conference after the meeting that the central bank had “responded very promptly...for the first wave; we will do it again for the second wave”.

Elsewhere, the Bank of Japan also left monetary policy unchanged on Thursday even as it revised its forecast of Japan's real GDP to show a 5.5 percent decline from a 4.7 percent fall in its previous projection.

Thursday, 29 October 2020

Markets fall, France and Germany back in lockdown, US faces “whole lot of pain”

Markets fell on Wednesday.

The S&P 500 plunged 3.5 percent, the STOXX Europe 600 tumbled 3.0 percent and the Nikkei 225 fell 0.3 percent.

Markets fell as the COVID-19 pandemic continued to surge globally and France and Germany announced that they were going back into lockdown.

“The virus is circulating at a speed that not even the most pessimistic forecasts had anticipated,” said French President Emmanuel Macron. “I have decided that we need to return to the lockdown which stopped the virus.”

“We need to take action now,” said German Chancellor Angela Merkel as she ordered bars, restaurants and theatres to be shut from 2-30 November.

In contrast, US President Donald Trump appears to be in denial over the severity of the COVID-19 pandemic in the US.

“We are turning the corner. We are rounding the curve, we will vanquish the virus,” Trump said at an election campaign rally in West Salem, Wisconsin.

However, Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, appears to disagree, telling CNBC in an interview on Wednesday that the US is “going in the wrong direction”.

“If things do not change, if they continue on the course we’re on, there’s gonna be a whole lot of pain in this country with regard to additional cases and hospitalizations, and deaths,” said Fauci.

Wednesday, 28 October 2020

Markets fall as COVID-19 cases set new records

Markets were mostly lower on Tuesday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 1.0 percent. Asian markets were mixed.

Stocks pulled back as the COVID-19 pandemic continued its own record-breaking run. Europe reported a record 230,892 new cases on Monday while the US reported an average of 69,967 new cases daily over the past seven days, the highest seven-day average on record.

“We are dealing with exponential growth,” German Economy Minister Peter Altmaier announced.

“This is a harbinger of a very tough winter that’s coming,” said Dr Bill Schaffner, an epidemiologist at Vanderbilt University.

Tuesday, 27 October 2020

Markets fall amid record high COVID-19 cases

Markets fell on Monday.

The S&P 500 plunged 1.9 percent, the STOXX Europe 600 tumbled 1.8 percent and the Shanghai Composite fell 0.8 percent.

Markets fell as the US, Russia, France and many other countries are setting records for COVID-19 infections, forcing some countries to impose new curbs.

Hopes for a stimulus deal in the US also dimmed after White House economic advisor Larry Kudlow said on Monday that talks had slowed down.

“The double whammy of a stalled stimulus bill and new highs in cases is a harsh reminder of the many worries that are still out there,” said Ryan Detrick, chief market strategist at LPL Financial.

Monday, 26 October 2020

Countries “on dangerous track” as daily COVID-19 cases hit record highs

The COVID-19 pandemic appears likely to continue to weigh on markets this week.

On Friday, World Health Organization Director-General Tedros Adhanom Ghebreyesus said during a press briefing that the world is “at a critical juncture in this pandemic” and that “some countries are on a dangerous track”.

Indeed, France reported a record 52,010 new confirmed coronavirus infections over the past 24 hours on Sunday, following a record 45,422 on Saturday.

The Spanish government on Sunday declared a national state of emergency that includes an overnight curfew. “The situation we are living in is extreme,” said Prime Minister Pedro S├ínchez.

The US reported 83,757 new COVID-19 cases on Friday, a record high. This was followed by another 83,718 cases on Saturday.

“I think the winter is going to be very difficult,” said Dr Scott Gottlieb, the former US Food and Drug Administration commissioner.

Saturday, 24 October 2020

Markets mixed, Europe and US COVID-19 cases surge

Markets were mostly higher on Friday.

The S&P 500 rose 0.3 percent, the STOXX Europe 600 rose 0.6 percent and the Nikkei 225 rose 0.2 percent.

Economic data on Friday were mixed.

The IHS Markit US PMI indices rose in October. The index for services climbed to 56.0 from 54.6 in the prior month while the index for the manufacturing sector edged up to 53.3 from 53.2.

However, the flash IHS Markit eurozone composite PMI fell to 49.4 from 50.4 in September.

“The euro zone is at increased risk of falling into a double-dip downturn as a second wave of virus infections led to a renewed fall in business activity,” said Chris Williamson, chief business economist at IHS Markit.

Indeed, Europe’s daily COVID-19 infections have more than doubled in the last 10 days, reaching a total of 7.8 million cases and about 247,000 deaths. France passed 1 million cases on Friday with a new record daily tally of more than 42,000.

The situation is little better in the US. 76,195 new cases were reported on Thursday, and the death toll could surpass 500,000 by February unless nearly all Americans wear face masks, according to the University of Washington’s Institute for Health Metrics and Evaluation.

“We are heading into a very substantial fall/winter surge,” said IHME director Chris Murray.

Friday, 23 October 2020

Markets mixed, hospitals stretched as COVID-19 surges

Markets were mixed on Thursday.

The S&P 500 rose 0.5 percent. However, the STOXX Europe 600 dipped 0.1 percent and the Nikkei 225 fell 0.7 percent.

US stocks rose amid renewed hopes for a fiscal stimulus after House Speaker Nancy Pelosi said Democrats and the Trump administration were on the verge of an agreement.

Still, the COVID-19 situation in the US remains dire as several US states reported record single-day increases in infections on Thursday and hospitals became increasingly stretched.

In Europe, France extended curfews to around two thirds of its population on Thursday. “We are already swamped,” said Bruno Megarbane, head of intensive care at the Lariboisiere hospital in Paris.

In Spain, which this week became the first European country to pass 1 million cases, Health Minister Salvador Illa said the epidemic was now “out of control” in many areas.

Thursday, 22 October 2020

Markets fall, US facing “exponential, explosive growth” of COVID-19

Markets were mostly lower on Wednesday.

The S&P 500 fell 0.1 percent and the STOXX Europe 600 fell 1.3 percent. However, the Nikkei 225 rose 0.3 percent.

A resurgent COVID-19 pandemic continued to weigh on markets, with six US states reporting record daily inceases in coronavirus-related deaths on Wednesday.

“We are not far from the period of exponential, explosive growth of #covid19 in the U.S.,” said Dr. Leana Wen, former Baltimore health commissioner, on Twitter.

Wednesday, 21 October 2020

Markets mixed, Europe faces renewed COVID-19 lockdowns

Markets were mixed on Tuesday.

The S&P 500 rose 0.5 percent while the Shanghai Composite rose 0.5 percent.

However, the STOXX Europe 600 fell 0.4 percent and the Nikkei 225 fell 0.4 percent.

While European stocks were weighed down by new restrictions on business activity and travel in several European countries to contain the rising number of COVID-19 cases, Yousef Abbasi, global market strategist at StoneX, suggested that “the market seems comfortable with the measures being taken as long as they are not large-scale stay-at-home orders”.

Still, James Griffith at CNN suggested that “much of Europe stares down the barrel of renewed coronavirus lockdowns, and a potentially miserable -- and deadly -- winter to come”, whereas China, where the COVID-19 virus was first detected, is now recovering much better.

Tuesday, 20 October 2020

Markets fall, China GDP growth below expectations

Markets were mostly lower on Monday.

The S&P 500 fell 1.6 percent and the STOXX Europe 600 fell 0.3 percent.

Earlier in Asia, markets were mixed, with the Shanghai Composite down 0.7 percent but the Nikkei 225 up 1.1 percent.

China's third quarter GDP grew 4.9 percent from a year ago, below expectations of 5.2 percent growth.

OCBC Bank’s Vasu Menon said that despite missing expectations, “when you drill down to the details, especially domestic consumption, I think that offers some room for optimism”.

Meanwhile, COVID-19 remained a concern as worldwide cases crossed 40 million on Monday, according to a Reuters tally.

Monday, 19 October 2020

Stocks rise as COVID-19 cases surge

Stocks rose last week, with the S&P 500 rising 0.2 percent.

In propelling markets higher, nvestors have largely looked past the surge in COVID-19 cases in the US and Europe.

On Friday, the US reported the most infections in a single day since July. As of Saturday, more than 8.1 million cases had been reported in the US and 219,286 people have died, according to Johns Hopkins University.

"This surge has the potential to be way worse than it was than either the spring or the summer," said epidemiologist Dr Abdul El-Sayed, Detroit's former health director.

Meanwhile, in Europe,the death toll from COVID-19 passed 250,000 on Sunday after a 44 percent increase in cases last week.

Restriction are being raised in most parts of Europe. Nighttime curfews on millions came into force in France this weekend and Switzerland required all its citizens to wear masks in indoor public places.

Saturday, 17 October 2020

Markets mixed as COVID-19 cases rise

Markets were mixed on Friday.

The S&P 500 was flat but the STOXX Europe 600 jumped 1.3 percent.

Earlier in Asia, the Shanghai Composite rose 0.1 percent but the Nikkei 225 fell 0.4 percent.

In the US, a report on Friday showed that retail sales rose 1.9 percent in September, a gain that Mike Loewengart, director of investment strategy at E-Trade Financial, said “suggests consumer strength is pretty robust”, adding that “momentum on that front could be a positive for the market as investors look for signs of recovery”.

However, another report showed that US industrial production fell 0.6 percent in September, which economists at Oxford Economics said is “one of the first real signs that the recovery is losing momentum”.

Indeed, the US could be facing a tough winter as the total number of COVID-19 cases surpassed 8 million on Friday.

The country has averaged more than 53,000 new daily cases for the past week, an increase of more than 55 percent in just over a month.

It is even worse in Europe, where cases have now overtaken the US, averaging roughly 97,000 new cases per day, up 44 percent from one week ago.

Friday, 16 October 2020

Markets fall amid surging COVID-19 cases and “nightmare” equity valuations

Markets fell on Thursday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 plunged 2.1 percent and the Nikkei 255 fell 0.5 percent.

The surge in COVID-19 cases dominated concerns, especially in Europe, where France, Germany, Italy, Poland and the Netherlands all reported record high new infections on Thursday.

Dr Hans Kluge, the head of the World Health Organisation Europe office, said death rates across the bloc could be “four to five times higher than those in April” by early next year if the pandemic is not consistently taken seriously.

However, US stocks managed to recover much of their early losses despite a report showing that claims for jobless benefits climbed 53,000 to 898,000 last week.

Still, Mark Hulbert at MarketWatch said contrarian thinking suggested that more weakness could lie ahead as investors have been extremely bullish lately.

“To put the timers’ current exuberance in perspective, consider the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects their average recommended equity exposure. Since 2000, 99% of the HSNSI’s daily readings have been lower than where it stands today,” he said.

Indeed, Cole Smead, president and portfolio manager at Smead Capital Management, told CNBC that such bullishness has pushed US equity valuations to become a “total nightmare”.

Thursday, 15 October 2020

Markets fall as fiscal stimulus hope fades and COVID-19 cases surge

Markets fell on Wednesday.

The S&P 500 fell 0.7 percent, the STOXX Europe 600 dipped 0.7 percent and the Shanghai Composite fell 0.6 percent.

Mark Hackett, chief of investment research at Nationwide, said that the likelihood of a US fiscal stimulus soon is “fading”.

Meanwhile, on corporate earnings reports, Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management, said that it is “so far so good”.

However, Brad McMillan, chief investment officer at Commonwealth Financial Network, said that the market’s optimism might make it vulnerable to bad news as “job growth has slowed substantially even as layoffs remain very high”.

In Europe, COVID-19 is clearly the primary concern as new daily cases hit about 100,000 and countries renew curfews and lockdowns.

“We are already in a phase of exponential growth, the daily numbers show that,” said German Chancellor Angela Merkel.

Wednesday, 14 October 2020

Markets fall, COVID-19 cases "to continue to rise"

Markets were mostly lower on Tuesday.

The S&P 500 fell 0.6 percent and the STOXX Europe 600 fell 0.6 percent.

Earlier in Asia, however, the Shanghai Composite was marginally higher while the Nikkei 225 rose 0.2 percent.

Markets fell after news that US regulators paused Eli Lilly’s late-stage COVID-19 trial due to safety concerns and Johnson & Johnson halted its coronavirus vaccine trial after a participant reported an unexplained illness.

Meanwhile, the COVID-19 news around the world remained grim.

Europe is tightening measures to contain the pandemic amid a sharp rise in cases.

The Czech Republic imposed a three-week partial lockdown after reporting the region's highest new infection rate per 100,000 people while the Netherlands imposed a four-week partial lockdown.

In the US, cases are also surging again.

"Now we're back up to (about) 50,000 new cases a day. And it's going to continue to rise," Dr. Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine.

Tuesday, 13 October 2020

Markets rise, could “crack pretty hard” within 18 months

Markets rose on Monday.

The S&P 500 jumped 1.6 percent, the STOXX Europe 600 rose 0.7 percent and the Shanghai Composite surged 2.6 percent.

“Investors have not lost faith that further stimulus measures will follow and that an effective COVID-19 vaccine will soon be placed on the market,” said Milan Cutkovic, market analyst at Axi.

Still, the resurgence of COVID-19 in Europe is leading to new restrictions that could hamper an economic recovery.

“Further lockdowns would jeopardise the already fragile economic recovery and have lasting effects on consumer confidence,” said Cutkovic.

DoubleLine Capital founder Jeffrey Gundlach thinks that the US may not fare much better.

“I don’t think people fully understand how many business closures there’s going to be in the next few months,” he said.

He added that within 18 months, stocks are “going to crack pretty hard”.

Monday, 12 October 2020

Markets gain amid rising COVID-19 cases

Markets rose last week, with the S&P 500 rising 3.8 percent and the STOXX Europe 600 rising 2.1 percent.

In advancing, stocks shrugged off reports of rising COVID-19 cases around the world.

On Friday, the US saw a total of 57,420 new cases, the most since 14 August, and the third consecutive day that cases exceeded 50,000.

Russia reported a record 13,634 cases on Sunday.

India reported 74,383 cases on Sunday, pushing its total caseload above 7 million.

Saturday, 10 October 2020

Markets higher on hopes for US fiscal stimulus

Markets were mostly higher on Friday.

The S&P 500 rose 0.9 percent and the STOXX Europe 600 rose 0.6 percent. The Nikkei 225 dipped 0.1 percent.

US stocks rose as fiscal stimulus talks resumed, with President Donald Trump telling Fox News that there was a good chance an accord could be reached.

“I view election uncertainty as noise and I would be a buyer on short-term volatility,” said Ben Kirby, co-head of investments at Thornburg Investment Management.

Also possibly boosting sentiment in the markets was news that Gilead Sciences's COVID-19 drug remdesivir shortened the time to recovery from the disease.

However, Reuters reported that a dozen US Midwestern states together reported a record 16,807 new cases on Thursday, with the number of hospitalisations hitting a record high for the fourth consecutive day.

Friday, 9 October 2020

Markets rise as low interest rates “clearly creating bubble elements”

Markets rose on Thursday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 1.0 percent.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note that “we do maintain a positive medium-term view for stocks into the middle of next year”.

Haefele cited fiscal stimulus, supportive central banks and medical developments as having “scope to surprise”.

Indeed, former Goldman Sachs CEO Lloyd Blankfein told CNBC that the low interest rates provided by central banks “is clearly creating bubble elements”.

“People are lending to what historically have been viewed as weak credits for very little money,” he said.

One problem is that the world entered the current COVID-19-driven economic crisis with already low interest rates.

Boston Federal Reserve President Eric Rosengren specifically cited “low rates persisting for an extended period even after the economy has made progress in the recovery” after the Great Recession ended in 2009 as making the current economic downturn even more severe.

He said that the low interest rates allowed firms to take on more leverage and “magnifies losses when bad outcomes occur”.

“I am sorry to say that the slow build-up of risk in the low-interest-rate environment that preceded the current recession likely will make the economic recovery from the pandemic more difficult,” he said.

Thursday, 8 October 2020

Markets mixed as Trump reconsiders stimulus

Markets were mixed on Wednesday.

The S&P 500 jumped 1.7 percent but the STOXX Europe 600 dipped 0.1 percent. Asian markets mostly rose but Japanese stocks were little changed.

The US stock market was given a reprieve after President Donald Trump said that he would immediately sign individual stimulus measures, if sent to him, after previously calling off talks with the Democratic party.

Meanwhile, however, the COVID-19 situation continues to be a source of concern, with the number of US cases surpassing 7.5 million on Wednesday as nine states set seven-day records for infections.

In Europe, confirmed cases passed 6 million on Wednesday, with Scotland and Belgium the latest to introduce curbs on alcohol consumption.

Wednesday, 7 October 2020

Markets mixed as Trump halts stimulus talks

Markets were mixed on Tuesday.

The S&P 500 fell 1.4 percent but the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.5 percent.

US stocks fell after President Donald Trump instructed White House officials to halt negotiations on further coronavirus stimulus.

“Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus, as is required by the Heroes Act,” said House Speaker Nancy Pelosi.

However, markets are still expecting stimulus eventually.

Jon Hill, senior fixed income strategist at BMP, said that a stimulus programme is still coming, just that “it will not occur until after the election”.

“Even after this news, the 10-year yields are higher than where they were yesterday morning,” noted Hill.

Dennis DeBusschere, quantitative strategist at Evercore ISI, suggested that “unwinding stimulus trades should not be taken too far”.

Tuesday, 6 October 2020

Stocks rally as Trump returns to White House

The S&P 500 rose 1.8 percent on Monday after US President Donald Trump said he would be discharged from the hospital in the evening.

Sure enough, the President returned to the White House that evening, where he was criticised for “an irresponsible mask removal and a reckless pronouncement there is nothing to fear from Covid-19”.

Still, CNBC’s Jim Cramer said that the stock market rally reflects “hope on talks between Secretary Mnuchin and Speaker Pelosi” producing an agreement on fiscal stimulus.

In addition, with former vice president Joe Biden opening his widest lead in a month in the presidential race, Ajay Rajadhyaksha, head of macro research at Barclays, said that markets “have lowered the chance of prolonged uncertainty” following the presidential election.

Monday, 5 October 2020

Trump COVID-19 illness possibly “severe”

The S&P 500 rose 1.5 percent last week, ending a four-week losing streak.

However, the index fell 1.0 percent on Friday after news that US President Donald Trump had tested positive for COVID-19

Some doctors think that the President's condition may be severe, noting that he has been started on dexamethasone.

“We give dexamethasone to patients who require supplemental oxygen,” said Dr Amesh Adalja, an infectious disease specialist at Johns Hopkins University.

Dr Daniel McQuillen, an infectious disease specialist at Lahey Hospital & Medical Center in Burlington, said that “the news conference description suggested the President has more severe illness than the generally upbeat picture painted”.

The President's illness comes as nine US states reported record increases in COVID-19 cases over the last seven days.

As the COVID-19 pandemic drags on, permanent job losses are poised to climb.

And it is a similar story in Europe, as countries report a surge in infections and renewed restrictions.

After reporting a daily record of 16,972 new COVID-19 cases on Saturday, France announced that Paris is to be placed on maximum COVID-19 alert, with bars to close for two weeks from Tuesday and restaurants to put in place new sanitary protocols to stay open.