10/30/2020 | Press release | Distributed by Public on 10/30/2020 03:04
Seven point four per cent growth GDP for the fourth quarter, good earnings anticipated from large tech and fewer jobless claims data, conspired to deliver a bounce on major indices overnight. While stimulus to the Street was flowing, consumer spending rocketed 40.7% annualised, which doubled the post-World War Two record. The U.S. economy expanded at a record 33.1% annualised pace, for the third quarter. However, the latest Covid surge is already tempering consumer behaviour, so other factors took the lead to bring favour back to equities Thursday night.
Unemployment benefit applications for the latest week hit lows not seen since mid-March, down 40 000 from the previous week and the fourth decline in five months. The total number of people receiving benefits from state or federal plans still stands at 22.7 million, with 11 million of them pandemic induced. Another round of layoffs from the pandemic-vulnerable services industry will impact soon as rising infections are already impeding consumer mobility.
Also, on the rise, the U.S. dollar despite an expected Biden/Stimulus win usually pressuring it, and Trump promising 'a very big package' of the stimulus should he win. As the Euro weakens in concert with strict and widespread lockdowns and flu season still a month away, national lockdowns are on the cards if current transmission trends are taken seriously. Of concern, one of the continents few Mega Pharmaceutical companies, Pfizer, who has fast-tracked a vaccine program, still hasn't released data from late-stage trials. The company also reported a 4.3% drop in third-quarter sales as demand for some of its pain treatments declined due to the pandemic.
The S&P 500 rose 2%, but global equities could still have the worst weekly decline since March. Facebooks reported $US21.5 billion in revenue for Q3, beat Wall Street's expectations for $US19.8 billion, and its daily active user base grew to 1.82 billion, up 12%. Alphabet also crushed the Street with earnings/share at $16.40 vs $11.29 expected. Revenue arrived at $46.17 billion vs $42.90 estimated by analysts. Exxon Mobil, on the other hand, is expected to cut 15 per cent from its global workforce.
|Gold Futures ($US/oz)||1868.00||-11.20||-0.6%|
|Spot Iron Ore ($US/t)||116.25||-0.70||-0.6%|
Surprisingly, Europe's STOXX 600 index fell just 0.1% despite Germany and France preparing restrictions nearing last spring's blanket lockdown efforts. COVID-19 deaths across the continent rose almost 40% in a week. Banks are still undershooting estimates for earnings as Credit Suisse net profits for the third quarter fell 38%. An oiler made some rare gains this week as Royal Dutch Shell rose 4.1%. It has reinstated its commitment to increasing shareholder payouts after cutting the payment for the first time since 1945. Our markets are off and jogging after the 97-point defeat Thursday, adding 11 points so far. September data for private sector credit and third quarter producer price index emerges today.
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