Morning Minutes 10/23/2020

Morning Minutes

Profits, Politics and PMIs in Focus For Friday

October 23, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

Friday morning finds stock markets around the world trending upward. Over in Europe, the Dax is up 1.1% and the FTSE is up 1.6%. Here in North America, US index futures are up 0.2% to 0.3% adding to yesterday’s gains of 0.2% to 0.5%.  Commodities are steady with WTI and Brent Crude Oil up about 0.4% after Russia indicated openness to extending output cuts, while copper is flat so far. Currency trading is mixed with the Euro (up 0.3%) and Pound (down 0.3%) heading in opposite directions against the US Dollar while gold and silver are up 0.6% and 0.9% respectively

With last night’s final US Presidential Debate in the books, the final leg of the campaign is now underway. Congress continues to haggle over stimulus but it’s uncertain what it would take to make a deal with the election now only 11 days away. Investors are responding positively to progress on a treatment. Gilead Sciences is up 4.2% premarket after the FDA gave its Remdesivir coronavirus treatment full marketing approval, up from emergency use only approval.

The main economic news out today is flash PMI reports, the first look at October economic conditions in the US and Europe. European numbers were split with Flash Manufacturing PMI reports for Germany and France above 50 in expansion territory and above expectations, while Flash Service PMI numbers for both countries were below 50 in contraction territory and below expectations. This suggests that COVID Wave Two may be having a bigger impact on the service sector so far than the manufacturing sector, especially with politicians focusing on targeted closures, rather than widespread, lockdowns. US flash PMI numbers are due at 9:45 am EDT today with the street expecting readings of 53.4 for Manufacturing and 54.3 for Non-Manufacturing.

Earnings reports and the reaction to them has been mixed this morning. Intel is down 10.0% in premarket trading after reporting in-line earnings as investors focused more on disappointing sales from its data center division. American Express ($1.30 vs street $1.35) missed expectations on earnings while Seagate Technology missed on sales. Toymaker Mattel is up 7.0% premarket after beating earnings expectations ($0.95 vs street $0.39).

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