The Friday Market Minute
- Global stocks grind higher as hopes of a near-term deal on stimulus offset concerns for rising coronavirus infection rates.
- House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will talk again Friday, but Senate Republicans are unlikely to support a deal that is likely to add a further $2 trillion to the current budget deficit.
- The dollar looks set for a weekly decline against its global peers, while Treasury bond yields have spiked to multi-month highs, as markets brace for more spending either before of after the November 3 election.
- European PMI data contracts in October as the region’s second-wave of coronavirus infections hits economic activity from Ireland to Italy.
- Wall Street futures suggest a firmer ahead of earnings from American Express and October PMI data at 9:45 am Eastern time.
U.S. equity futures bumped higher Friday, while the dollar extended its recent slump and headed towards a weekly decline, as global markets continue to track the progress of stimulus talks in Washington.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are slated to speak again Friday, with reports suggesting the pair are inching closer to an agreement that could see passage, in the House at least, of a $2 trillion-plus coronavirus relief bill in the coming days.
Senate passage, however, looks increasingly unlikely prior to the November 3 election, as lawmakers baulk at some of the targeted spending ambitions and the overall additions to an already-swelled U.S. budget deficit.
The dollar’s weekly retreat against its global currency peers reflects markets’ concerns for the additional spending, as well, with benchmark 10-year U.S. Treasury not yields rising to a June high of 0.86% in anticipation of another wave of bond auctions to fund it.
Stocks, however, look set to edge higher on the session, but are likely to fall for the first week this month as investors pare back risk positions heading into a busy earnings week and the U.S. election countdown.
Futures contracts tied to the Dow Jones Industrial Average suggest an 85 point opening bell gain to kick-off the Friday session, with the S&P 500 priced for a 10 point bump.
Intel Corp. (INTC) – Get Report was a notable pre-market mover, with shares plunging more than 10% after the chipmaker matched Wall Street forecasts for sales and earnings last note, but noted that customer demand for cheaper, lower-margin semiconductors ate into its profits and would likely do so again in the current quarter.
Gilead Sciences (GILD) – Get Report, meanwhile, surged more than 6.5% after the Food & Drug Administration approved its Emergency Use Approval request for remdesivir, a coronavirus drug that was used in the treatment of President Donald Trump.
European stocks were also on the rise, despite data showing economic activity in the region contracted this month as a wave of coronavirus infections triggered lockdowns and curfews in some of the largest member states, including France, Italy and Germany.
Better-than-expected third quarter earnings from U.K. lender Barclays, as well as German luxury carmaker Daimler AG, gave markets an early boost, with the Stoxx 600 rising 0.6% in Frankfurt and Britain’s FTSE 100 gaining 1.1% in London.
Oil prices were largely flat on the session in overnight trading, but primed for a weekly loss, as investors trim bets on near-term demand amid surging coronavirus infection rates robust supplies of crude and gasoline in the domestic U.S. market.
WTI contracts for November delivery, the U.S. benchmark, traded 9 cents lower from their Thursday close in New York and were changing hands at $40.62 per barrel in early European dealing while Brent contracts for December, the global benchmark, were seen 2 cents higher at $42.48 per barrel.
Asia stocks, taking their cue from Wall Street’s steady close last night, ended their Friday session largely in the green, with the Nikkei 225 rising 0.18% to 23,516.59 points to edge into positive territory for the week, while the region-wide MSCI ex-Japan index nudged 0.1% higher to 585.62 points.