News & Analysis

Overnight on Wall Street: Wednesday 28 October 2020

October 28, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

It was another day of red in the global stock markets as certain European countries continue to post record numbers of coronavirus cases and reported more deaths seen since April. European stocks traded lower as tighter restrictions might be looming given the rapid spread of the second wave of outbreak.


Source: Bloomberg

Nasdaq eked out some modest gains while the S&P500 and Dow Jones Industrial Average traded 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 222 points or 0.8% to 27,463.
  • S&P 500 fell by 10 points or 0.3% to 3,391.
  • Nasdaq Composite added 72 points or 0.6% to 11,431.

On the earnings front, the immediate attention is on the tech leaders as those companies were among the main drivers to lead the rebound in the US stock market after March lows.

Microsoft reported its fiscal year 2021 first-quarter earnings yesterday after the bell. Powered by cloud and AI and underpinned by security and compliance,  the Company strives in their mission to empower every person and organisation which work remotely during these extraordinary times to minimise disruption across every possible industry and around the world.

Microsoft Cloud Strength Fuels First Quarter Results. As compared to the corresponding period of last fiscal year:

  • Revenue was $37.2 billion and increased 12%
  • Operating income was $15.9 billion and increased 25%
  • Net income was $13.9 billion and increased 30%
  • Diluted earnings per share was $1.82 and increased 32%

However, despite the better-than-expected earnings report, the software company’s share price is falling in after-trading hours. 

Currency Markets 

In the FX space, major currencies were mixed against the US dollar. The price action stayed driven by the broader sentiment as markets seemed concerned with 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. 


Source: Bloomberg

On the economic front, US data came out mixed:

  • New orders for manufactured durable goods in September increased $4.3billion or 1.9percent to $237.1billion. This increase, up five consecutive months, followed a 0.4percent August increase. 
  • House prices rose nationwide in August, up 1.5 per cent from the previous month.
  • Consumer Confidence Index declined slightly in October, after increasing sharply in September. The Index now stands at 100.9 (1985=100), down from 101.3 in September.

Commodities

The demand outlook continues to remain the major concern as various types of curfews and social distancing measures are threatening to paralyse activities again. The weekly inventory data released by American Petroleum Institute yesterday also dragged crude oil prices lower as crude oil stock up to 4.55M in October 23 from previous 0.584M. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading at around $38.79 and $41.20 respectively.

Gold

The precious metal also remains within familiar levels around the key psychological $1,900 level 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 $1,905. 


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Total Filled jobs (New Zealand)
  • RBA Trimmed Mean CPI and Consumer Price Index (Australia)
  • ZEW Survey – Expectations (Switzerland)
  • BoC Rate Statement, Bank of Canada Monetary Policy Report
  • BoC Interest Rate Decision and Press Conference (Canada)
Thursday, 29 October 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.272 0.07 1.224 0 1.286
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
12.289 0 1.6 0 0 0 3.27


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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