Markets digest a heated presidential debate

Markets digest a heated presidential debate 150 150 Realm

The first presidential debate was heated to say the least with President Donald Trump and Democratic candidate Joe Biden clashing over the economy, the handling of the coronavirus pandemic, law and order and other issues. U.S. equity index futures fell back following the debate, and overnight.

 

Global Macro

  • Stocks of crude oil in the United States fell by 0.8 million barrels in the week ended September 25th, 2020, after a 0.7 million build in the previous week and compared with market expectations of a 1.4 million gain, data from the American Petroleum Institute showed.
  • The S&P CoreLogic Case-Shiller 20-city home price index in the US rose 3.9 percent from a year earlier in July of 2020, following a 3.5 percent increase in the previous month and above market expectations of a 3.8 percent gain. Phoenix (9.2 percent), Seattle (7 percent) and Charlotte (6 percent) reported the highest gains among the 19 cities (excluding Detroit). In contrast, prices in Chicago (0.8 percent) and NY (1.3 percent) grew the least. The national index, covering all nine US census divisions, advanced 4.8 percent, higher than 4.3 percent in the previous month. “The strength of the housing market was consistent nationally with all 19 cities reporting higher prices, with 16 of them outpacing their June gains”, said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices.
  • The US trade deficit on goods widened to USD 82.94 billion in August of 2020 from a revised $80.11 billion in the previous month, a preliminary estimate showed. That is the highest trade gap ever amid higher imports as businesses try to rebuild inventories. Imports increased 3.1 percent to USD 201.29 billion, mainly due to sales of consumer goods (7 percent), capital goods (1.4 percent) and autos (6.2 percent) while those of industrial supplies fell 4.6 percent. Exports rose at a slower 2.8 percent to USD 118.35 billion, boosted by sales of industrial supplies (10.6 percent) and consumer goods (1.2 percent) but fell for capital goods (-3.9 percent).
  • Wholesale inventories in the US rose 0.5 percent month-over-month in August 2020, following three consecutive months of declines, a preliminary estimate showed. Durable goods stocks jumped 0.8 percent, compared to a 0.6 percent fall in July, while nondurable goods increased at a softer 0.2 percent after a 0.7 percent advance. Year-on-year, wholesale inventories fell 5.0 percent.
  • On Tuesday: European stocks ended lower as concerns over rising coronavirus cases across the world and the continued uncertainty about a Brexit deal rendered the mood bearish. US stocks faltered after recovering from a weak start, but slipped deeper into the red by noon and despite recovering gradually, eventually ended the session on a negative note, snapping a threeday winning streak. Investors were also reacting to the latest updates on a coronavirus relief package. After a near one hour conversation on Tuesday, Speaker Nancy Pelosi and U.S. Treasury Secretary Mnuchin made plans to speak again Wednesday on their effort to deliver trillions of dollars in relief to struggling Americans just ahead of the November election.

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