Stimulus deal remains elusive and coronavirus infections hit record

26/10/2020 U.S. futures started the week on the back foot as a stimulus deal remained elusive and coronavirus infections hit a record for a second day. Asian stocks drifted lower and S&P 500 contracts retreated, though were off their session lows. Stocks slipped in China, Japan and South Korea. They fluctuated in Australia. The dollar strengthened. U.S. House Speaker Nancy Pelosi said the chamber could pass a pandemic relief plan this week, though a deal with the White House remains elusive as chances faded of a resolution before next week’s election. Hong Kong is closed for a public holiday, so no read through on Tencent.

Locally the JSE All Share ended the day up 1% as SA Inc names drove the market however this was off-set by the sell-off in the Gold and Platinum names. Some big winners were CLS + 12.07%, NED + 9.61%, OMU + 9.34% and SLM + 8.40%, NHM and IMP ended the day down 5.41 and 5.44% respectively.

• South Africa’s Rail Expansion Plan Links Soweto to Johannesburg.
• Transnet of South Africa Reports $617 Million in Irregular Spend.
• South Africa May Ring-Fence Transnet’s Irregular Spending: BD.
• South Africa 3Q unemployment Release Delayed to Nov. 12
European markets closed higher on Friday as investors monitored signs of progress toward a U.S. stimulus deal and digested a raft of major corporate earnings. The pan-European Stoxx 600 provisionally closed about 0.5% higher, with banks jumping over 2.5% on the back of strong earnings to lead the gains while retail stocks slumped around 0.9%. FTSE + 1.29%, DAX +0.82%, CAC + 1.20%. On the data front, the flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, dropped to a four-month low in October to 49.4, versus 50.4 in September. A reading below 50 represents a contraction in activity. Futures in Europe are softer across the region also keep mind the UK moved their clocks forward one hour yesterday.
Futures tied to major U.S. equity benchmarks traded lower in morning trading on Monday as Wall Street headed for the last full trading week ahead of Election Day. Dow futures fell 194 points. The S&P 500 futures and the Nasdaq 100 futures both also traded in negative territory. This week marks the last week of October and the final trading period before Nov. 3. Major averages are on track for modest gains for the month, with the S&P 500 and the Nasdaq both rising more than 3% so far. The 30-stock Dow is up about 2% this month. Traders will keep their eyes peeled for a raft of Big Tech and blue-chip corporate earnings as well as key economic data this week. Apple, Facebook, Alphabet, Amazon, Boeing and Caterpillar all report later in the week, while the first look at third quarter GDP is due on Thursday.
Oil prices fell on Monday, extending last week’s losses, as a jump in COVID-19 infections in the United States and Europe raised alarms over crude demand, while the prospect of increased supply also hurt sentiment. Brent fell 2.7% last week and WTI dropped 2.5%. OPEC+, a grouping of producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, is also set to increase output by 2 million bpd in January 2021 after cutting production by a record amount earlier this year. Brent $ 40.56, WTI $ 39.04.
Gold is trading a little softer on the Dollar strength as we wait for any stimulus news, the metal is trading at $ 18.96 down 0.28%. Silver fell 0.5% to $24.45 per ounce, while platinum dipped 0.7% to $895 and palladium eased 0.5% to $2,382.12.
Have a great week ahead.