The economic agenda of the week started with generally positive signals from Asia. A weekend trade deal fostered hopes of a fuller recovery from the shocks of this year, at least for the Asia-Pacific region, after 15 Asia-Pacific economies including China and Japan, agreed to reduce future tariffs. Meanwhile in Japan, the gross domestic product (GDP) gained 5.0% in Q3 versus Q2 2020, which was better than 4.4% expected by Bloomberg expert poll, also comparing to the previous quarter, during which the economy dropped 8.2%. A growth in the external demand component was at 2.
Oil prices have risen significantly since the beginning of November, when the North Sea Brent benchmark traded below $37.5 per barrel. By noon in Europe on Wednesday, November 11, the quotes even exceeded $45 per barrel, as a vibrant response to widespread hopes for Pfizer's anti-COVID vaccine to come and save the world demand for fuel soon. Despite the fact that other fragments of fundamental reality are less stable, and it could remain so at least for several months.
The "wait and see" mood is once again prevailing on global markets today as Mike Pompeo, the U.S. Secretary of State and a former director of the Central Intelligence Agency (CIA), remarked on Tuesday: "There will be a smooth transition to a second Trump administration". Mr Pompeo told this when answering a question of one journalist, when the transition of power procedures may start and about contacts with Biden's team on this point, the talk suddenly took place at a regular press conference on the routine foreign affairs agenda.
On Monday, markets were woken from a nap by an unexpected welcome surprise. With one accord, and for a few hours, the trading community even seemed to have entirely forgotten all the threadbare media refrains concerning the U.S. election agenda. A set of major European indexes soared by five to seven percent, quickly starting to storm all of their respective multi-month top levels, with the French CAC40 exceeding the best summer quotes, and the U.S. broad market S&P500 index even hit its new record all-time highs.
The U.S. S&P 500 broad market index soared above a 3500 landmark amidst the election uncertainty. At least one possible secret of such a poker-faced behaviour of the stock market could be Wall Street's bet on a probable Republican held Senate that may just block any corporate tax moves or other hasty election pledges by a Democratic Joe Biden administration. If, of course, the state courts or the U.S. Supreme Court will recognise Biden as a legal winner of the election, although it might be fitting to remember that there is many a slip ’twixt the cup and the lip.
Flighty financial markets are closely monitoring the U.S election saga that is still unwinding after Election Day on November 3. As Democratic nominee Joe Biden gets more and more votes, risky assets and currencies against the U.S. Dollar are seen to be getting more support. This trend is not only supported by the democratic promise to approve the large relief bill of $2.2 trillion, but also by hopes of smoothing trade tensions and geopolitical confrontation with China that would most likely improve global trade in investments.
This sentiment is supported by rising stock indexes that gained 1.
The only manifested gainers from a lasting uncertainty surrounding the final U.S. election results seems to be, for now, some European, Asian and other non-American stocks. For example, the German Xetra DAX 30, as well as the French CAC 40 and pan-European Euro Stoxx 50 indexes are climbing higher for the fifth straight trading day in a row. China’s Shanghai Composite (SSEC) also added around 3% compared to last Friday's closing price. The Shenzhen Component rose 1.72%, and Hong Kong’s Hang Seng Index soared 3.25% today. Even in Australia, the broad S&P/ASX 200 index gained 1.
It seems that stock markets and currencies, as well as commodities, are no longer willing to respond appropriately to the regular macroeconomic background or even to the important Q3 corporate reports from giant companies. The investment community itself seems to not care about forming any mental conception or any expectations concerning the outcome of the Bank of England’s meeting or the U.S. Federal Reserve’s meeting this Thursday.
An extreme uncertainty surrounding the foggy U.S.
Today is clearly more of a wait and see mood in the markets, as most of the participants in the investment community are pretending to broadly maintain the status quo after the civilized crowd of innumerable fund managers and private traders found it prudent to transform some part of their capital from stocks and commodity assets into "cash". Those ingenuous plans were mostly accomplished already in the first half of the week.
continued to decline for the third day in a row with the U.S. S&P 500 broad
market index forming fresh dips below the 3350 point landmark on Wednesday's
European morning vs more than 100 points higher close of the previous week, and
less than 24 hours after prices were struggling to hold the levels above 3400
points on Tuesday. The lows of this autumn are located near a 3200 technical