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Daily Market Update

Latest Economic & Market Update 12th October 2020

Good afternoon, it is October 12th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • US stocks climb on the hope of fiscal stimulus.
  • Democrats reject new fiscal stimulus offer.

US stocks climbed on Friday as investors contemplated the potential of new fiscal stimulus. The S&P500, Dow Jones and Nasdaq rose 0.88%, 0.57% and 1.39% respectively. European stocks rose as companies raised their outlooks, despite economic data showing a slowdown in economic recovery. The Stoxx Europe 600 rose 0.55%. Gold rose 1.9% to $1,930.40/ ounce. Brent Crude fell -1.13% to $42.85 a barrel. Source: Bloomberg

As the negotiations continue regarding a new fiscal stimulus package in the US, investors are receiving mixed signals and the likelihood of an agreement before the election is fading. There has been a wide gap in the amount of stimulus that Republicans want to provide compared to Democrats. Republicans had previously offered $1.6tn but that was much lower than the $2.2tn Democrats were pushing for. On Friday the White House upped their offer to $1.8tn but this was subsequently rejected by the Democratic Speaker of the House of Representatives Nancy Pelosi and described by Pelosi as “one step forward, two steps back”. The new $1.8tn offer was also criticised as excessive by some Republican lawmakers. In a letter, Pelosi stated that the offer did not include enough provisions for Covid testing and tracing and that the White House was resisting tax credits for the poorer families. To add to investor confusion regarding the potential of a stimulus deal, speaking on Rush Limbaugh’s radio show, Trump stated that he would like a bigger stimulus package than what both Republicans and Democrats were offering. The lack of a deal on further fiscal stimulus risks the rebound of economic activity in the US and will slow economic recovery. Jerome Powell, the Chair of the Federal Reserve, has also been clear in his message to the White House that further fiscal stimulus is vital to keep the economic recovery going and prevent another downturn. Source: FT, BlackBee

Best & Worst Performers of Large Cap US Stocks on Friday
Click image to enlarge

Global Market Update
(as at close of markets 09/10/2020)