Stock futures paused ahead of Powell’s comments, economic data

US equity futures changed slightly on Tuesday, ahead of Fed Chairman Jerome Powell’s speech on the economic outlook and data on the trade deficit.

S&P 500 futures fluctuated between small gains and losses. Nasdaq 100-linked contracts are down 0.2%. Both indicators rose on Monday, but remained far from their yearly highs.

Data due at 8.30 AM ET is expected to show the US trade deficit Expanded in August The Americans’ appetite for foreign goods exceeded the demand from abroad.

Investors will also be analyzing Mr. Powell’s language for any new clues about the state of the economy when he addresses the annual meeting of the National Association of Business Economics at 10:40 am ET. In recent weeks, Mr. Powell has declared government intervention swift Help support the economy during Coronavirus pandemicHowever, more financial support is likely to be required.

Stocks seem to stop after that Monday strong rally. Investors are trying to assess the repercussions of President Trump’s illness and the spread of infection among US senators And senior White House staff.

Early indications that the election results may be in favor of former Vice President Joe Biden and the Democrats as well Imposing new restrictions In some places, due to new waves of coronavirus infections, there are also factors that are taken into consideration.

“People are waiting for the vote to pass, and expecting the volatility to increase,” said Sima Shah, chief strategic analyst at Principle Global Investors. “This is not the time to make rash decisions about your situation.”

Investors are betting that Joe Biden’s decisive election victory could mean less uncertainty in the days after the election, and a bigger stimulus package next year.


Roberto Schmidt / AFP / Getty Images

New opinion polls showing Mr. Biden ahead of Mr. Trump and may secure a decisive victory in the November election also help calm markets, although expected volatility remains high until Election Day. Investors have grown increasingly anxious in recent weeks about narrowly winning one candidate or another, which could escalate the risk of legal disputes and lead to a period of uncertainty in the days following the election.

“A month or two ago, the market showed a preference for Trump’s victory, and now the preference for Biden’s overall victory,” said Edward Park, chief investment officer at Brooks Macdonald. “The reason behind this shift is about the increasingly controversial vote expectations, and the stimulus talks.”

Park and others said the Democrats’ potential election victory has fueled speculation among investors that Congress will approve a sizeable fiscal spending package after a new government is formed.

“a Clean sweep of the Democrats “It means the $ 3.5 trillion stimulus is likely to pass early next year,” said Peter Garnery, head of equity strategy at Saxo Bank. “This means that stocks will likely return to bullish mode.”

Mr. Trump has left the hospitalWith a diagnosis warned on Monday after three days of treatment for Covid-19. His diagnosis created new uncertainty in his presidential campaign, and it also complicated the plans of the Supreme Court candidate. Senate Majority Leader Mitch McConnell canceled the scheduled votes after several Republican senators tested positive, but said Judge Amy Connie Barrett’s hearings were on track to begin on October 12th.

In the bond markets, the yield on the 10-year Treasury rose to 0.773% from 0.760% on Monday. US government bond yields It has reached its highest levels It has closed since June Monday, buoyed by growing hopes of new fiscal stimulus from lawmakers.

Abroad, the Stoxx Europe 600 continental index is up 0.2%.

In Asia, equity markets posted modest gains as trading closed. Japan’s Nikkei 225 ended trading 0.5% higher, while the Hang Seng in Hong Kong added 0.9%. Shanghai Composite Index remained closed for a holiday.

In commodities, Brent crude, the international energy benchmark, rose 1.5% to $ 41.89 a barrel.

Write to Anna Isaac at [email protected]

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