The Wednesday Market Minute

  • Global stocks mixed as markets react to contradictory statements on stimulus from President Donald Trump.
  • Hours after ordering White House officials to stop negotiating with Democrats, Trump suggested he would sign a ‘stand alone’ bill to support airlines and small businesses.
  • White House economic adviser Larry Kudlow tells CNBC a piecemeal agreement on stimulus is a “low probability event”.
  • The U.S. dollar edges higher amid the stimulus uncertainty, made more complicated by the President’s coronavirus diagnosis, while benchmark 10-year Treasury yields hold at 0.764%.
  • Oil prices eases as the Energy Department trims near-term demand forecasts and Hurricane Delta slows to a category 3 storm as it heads towards the crude production areas of the Louisiana coast.
  • U.S. equity futures suggest a firmer open on Wall Street, with a 240 point gain priced for the Dow Jones Industrial Average.

U.S. equity futures powered ahead Wednesday, while the dollar inched higher against its global peers, as markets reacted to a U-turn on stimulus talks from President Donald Trump that could signal a breakthrough in talks from lawmakers in Washington.



Dow Futures Gain on Trump Stimulus U-Turn; Dollar Grinds Higher As Markets Eye Talks in Washington


© TheStreet
Dow Futures Gain on Trump Stimulus U-Turn; Dollar Grinds Higher As Markets Eye Talks in Washington

Just hours after ordering his White House staff — many of whom remain in self-isolation following the his coronavirus infection last week — to cease negotiating with Democratic lawmakers to try and bridge a $600 billion gap between rival stimulus bills, Trump Tweeted his willingness to sign a ‘stand alone’ agreement that would provide paycheck protection to small businesses and $25 billion in support to U.S. airlines.

https://twitter.com/realDonaldTrump/status/1313658825040371712

While a smaller, more targeted bill is something House Speaker Nancy Pelosi has advocated for in the past, it’s difficult to tell at this stage in the election campaign, with just four weeks

The Wednesday Market Minute

  • Global stocks mixed as markets react to contradictory statements on stimulus from President Donald Trump.
  • Hours after ordering White House officials to stop negotiating with Democrats, Trump suggested he would sign a ‘stand alone’ bill to support airlines and small businesses.
  • The U.S. dollar edges higher amid the stimulus uncertainty, made more complicated by the President’s coronavirus diagnosis, while benchmark 10-year Treasury yields hold at 0.764%.
  • Oil prices eases as the Energy Department trims near-term demand forecasts and Hurricane Delta slows to a category 3 storm as it heads towards the crude production areas of the Louisiana coast.
  • U.S. equity futures suggest a firmer open on Wall Street, with a 190 point gain priced for the Dow Jones Industrial Average.

U.S. equity futures powered ahead Wednesday, while the dollar inched higher against its global peers, as markets reacted to a U-turn on stimulus talks from President Donald Trump that could signal a breakthrough in talks from lawmakers in Washington.

Just hours after ordering his White House staff — many of whom remain in self-isolation following the his coronavirus infection last week — to cease negotiating with Democratic lawmakers to try and bridge a $600 billion gap between rival stimulus bills, Trump Tweeted his willingness to sign a ‘stand alone’ agreement that would provide paycheck protection to small businesses and $25 billion in support to U.S. airlines.

While a smaller, more targeted bill is something House Speaker Nancy Pelosi has advocated for in the past, it’s difficult to tell at this stage in the election campaign, with just four weeks to go before the polls open on November 3, whether she would hand the President a tactical victory when he trails rival Joe Biden in most national polls.

Federal Reserve Chairman Jerome Powell, however, cautioned yesterday that

(Bloomberg) — The dollar extended gains and U.S. equity futures fluctuated as investors weighed the impact of President Donald Trump’s decision to end stimulus talks until after next month’s election. Asian equities were mixed.



chart, line chart: 30-year Treasury yield trying to convincingly break above 200-day moving average


© Bloomberg
30-year Treasury yield trying to convincingly break above 200-day moving average

S&P 500 futures were little changed after the benchmark fell more than 1% overnight. Fresh comments from Trump calling for support for airlines and the Paycheck Protection Program helped reverse earlier losses. Shares saw modest gains in Hong Kong and South Korea and fluctuated in Japan. Treasury yields held overnight declines. Nasdaq contracts earlier retreated after a House panel proposed a series of far-reaching antitrust reforms to curb the power of U.S. technology giants including Amazon.com and Alphabet Inc. European futures pointed lower.

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Elsewhere, Australia’s 3-year bond yield dropped to an all-time low on plans to issue less debt than estimated, while stocks rose after Tuesday’s budget annoucement. Crude oil dropped.

Volatility has picked up this month after Trump contracted the coronavirus and investors weighed the likelihood of a stimulus deal. House Speaker Nancy Pelosi had called on Republicans to get on board with a version of the bill the House passed last week with only Democratic votes. But significant gaps remained between the Democrats’ $2.2 trillion proposal and a $1.6 trillion offer backed by the White House.

“The market rally thus far had really been driven by this unprecedented stimulus from both central banks and governments globally and a large part of that was from the U.S.,” Emily Weis, a macro strategist at State Street Corp., said on Bloomberg TV. The timeline on more American fiscal stimulus “has now been pushed further back.”

Meanwhile, with Trump now out of hospital investors continue to monitor the virus’s impact on economic recoveries

(Bloomberg) — U.S. equity futures fluctuated and Treasuries were steady before a speech by Federal Reserve Chair Jerome Powell on the outlook for the economy.

The Europe Stoxx 600 Index rose, led by gains in banks and travel shares advanced. Hardware maker Logitech International SA slumped as Apple Inc. plans to launch its own audio products and stop selling rival headphones.

The pound weakened after a report that the European Union has no plans to offer concessions to Boris Johnson before next week’s Brexit deadline. The bloc is ready to let U.K. talks drag on into November or December, and even take a chance on Johnson pulling the plug on the deliberations rather than compromise on its red lines, according to a senior EU diplomat.



chart, line chart: Bullion-backed ETF holdings hit record even as spot prices lag


© Bloomberg
Bullion-backed ETF holdings hit record even as spot prices lag

After the S&P 500’s biggest advance in almost four weeks yesterday, investors seem to be taking a break to digest new information. Powell and European Central Bank Chief Economist Philip Lane are set to deliver the keynote addresses at a meeting by the National Association for Business Economics on Tuesday.

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In recent weeks, Fed officials have stressed that the U.S. recovery is highly dependent on the nation’s ability to better contain infections, and that further fiscal stimulus is likely needed to support jobs and incomes.

There are also lingering concerns about the trajectory of the pandemic and its effect on the economy. In Germany, new coronavirus cases jumped the most since mid-April and Italy is set to tighten restrictions to curb the spread of the virus.

“The momentum of the recovery is clearly fading now and the positive surprises have ended,” according to strategists at Dutch asset manager Robeco. “With winter approaching in the northern hemisphere, we are already seeing more

The Tuesday Market Minute

  • Global stocks mixed as markets react to President Trump’s return to the White House from Walter Reed Medical Center.
  • Trump told reporters he was ‘feeling good’ following three days of treatment for his coronavirus infection, but doctors warned that the worst of his symptoms could still surface.
  • Treasury Secretary Mnuchin and House Speaker Pelosi set to resume stimulus talks Tuesday, but the infection of three GOP Senators with COVID-19 could delay ultimate vote for fresh fiscal support
  • Federal Reserve Chairman Jerome Powell speaks at 10:40 am Eastern time, with key central bank address from ECB and BoJ officials slated to follow Tuesday.
  • U.S. equity futures suggest a softer open on Wall Street ahead of redbook retail sales data at 8:55 am Eastern time and Powell’s webcast speech at 10:40 am Eastern time.

U.S. equity futures drifted lower Tuesday, while benchmark Treasury bond yields held at higher levels after a breakout move on Monday, as markets reacted to President Donald Trump’s return to the White House following three days of treatment for his coronavirus infection at Walter Reed Medical Center.

Trump, whose positive test was determined on Thursday, told reporters in Washington he was feeling ‘good’ upon his return to the White House, although doctors cautioned that the worst of the disease’s symptoms could flare up later this week.

Still, the apparent stabilization of the President’s health, as well as reported progress in stimulus talks between House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin, put a floor under U.S. stocks in overnight trading after indices hit a two-week high after Monday’s sharp rally.

Tuesday’s early trading is likely to focus on the both the impact of the resurging virus on major economies around the world, as well as central bank plans to alleviate it, with three