News & Analysis

Overnight on Wall Street: Tuesday 27 October 2020

October 27, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

The daily records of coronavirus infections across the US and European countries have dampened risk sentiment. Global equities ended in a sea of red with major pullbacks in the European and US markets. 

Major US equity indices trade mostly in negative territory throughout the day as hopes for a stimulus relief package ahead of the US elections are fading while the virus continues to create havoc in the US. 

  • The Dow Jones Industrial Average lost 650 points or 2.3% to 27,685.
  • S&P 500 fell by 64 points or 1.9% to 3,401.
  • Nasdaq Composite erased 189 points or 1.6% to 11,359.

On the earnings front, tech giants will stand out amid a busy earnings calendar. Investors are eagerly waiting for Thursday as Amazon, Alphabet Inc, Apple, Facebook and Twitter are set to report their quarterly earnings.

Currency Markets 

In the FX space, the price action was driven by the broader sentiment amid a relatively subdued economic calendar on Monday. The markets were rattled by US election-related uncertainties, COVID-19 daily records in Europe, and  Brexit negotiations. Major pairs remain within familiar levels given the indecisiveness and lack of clarity in the markets. 

On the economic front, IFO surveys in Germany came out mixed:

  • The Ifo Business Climate Index fell from 93.2 points (seasonally adjusted) in September to 92.7 points in October. This is the first fall after five consecutive increases. Companies are considerably more sceptical regarding developments over the coming months. In contrast, they gave a slightly more positive assessment of their current situation than last month. In view of rising infection numbers, German business is becoming increasingly worried.
  • The current assessment registered at 90.3 above expectations (89.8) in October.
  • The expectations fell below forecasts (96.5) in October: Actual (95) 

The EURUSD pair edged lower but held above the 1.18 level following mixed IFO surveys and the current risk environment:


Source: GO MT4

In the US, the Chicago Fed National Activity Index which is the monthly index designed to gauge overall economic activity and related inflationary pressure suggests Slower, but still slightly above-average growth in September. The index was up by 0.27 in September, down from +1.11 in the month of August. In the housing market, New Home Sales (MoM) came below forecasts (1.025M) in September at 0.959M.

Commodities

Crude oil prices were underpinned by both the demand and supply side last week. The demand side narrative continues to remain the major concern as various types of curfews and social distancing measures are threatening to paralyse activities again. Traders will likely continue to monitor the weekly oil reports for fresh trading impetus. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading at around $38.64 and $40.46 respectively.

Gold

The precious metal remains relatively unchanged for the day as traders await for the next catalyst. With no US stimulus in sight, the XAUUSD pair is struggling to advance higher despite the second wave of virus hitting hard certain countries. As of writing, the XAUUSD pair is trading around $1,902. 


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Imports, Exports, and Trade Balance (New Zealand)
  • RBA’s Bullock Speech (Australia)
  • ECB Bank Lending Survey (Eurozone)
  • Durable Goods, Nondefense Capital Goods, Housing Price Index, S&P Case Shiller Home Price and Consumer Confidence (US)
Wednesday, 28 October 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.004 0.011 0 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 0 3.251


Disclaimer:  The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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