by Noreen Burke
Investing.com – In the coming week of trading, shortened by holidays in the US, stock markets are likely to continue to focus on two main themes: the prospect for a coronavirus vaccine versus the rapid spread of the pandemic in the US. Economic data, including reports on personal spending and consumer confidence, will show whether the virus rekindled worries about the economic outlook before Black Friday. Purchasing managers’ indices from the eurozone are likely to reflect a significant decline in business activity as the new lockdown measures will be fully reflected in these numbers. Meanwhile, the UK and the European Union appear to be on the verge of signing a post-Brexit trade deal. Here’s what you need to know to start your trading week informed.
1. Impf Optimism vs. Virusrealität
Stock market investors are weighing the risks of the rapidly spreading virus and the potential for a robust economic recovery once a vaccine is widely available.
The benchmark recently hit new highs when two experimental vaccines had high efficacy rates – from Modern (NASDAQ 🙂 and that jointly by Pfizer (NYSE 🙂 and BioNTech (NASDAQ 🙂 developed funds were reported. Both vaccines could be ready for US approval and distribution within weeks.
The pandemic remains an imminent threat, however, as the US recorded its 12th millionth Covid-19 case on Saturday, closing a series of days with record-breaking numbers of infections. In the meantime, millions of Americans are expected to travel for the upcoming Thanksgiving Day, ignoring warnings from health officials about the virus accelerating its spread.
2. US economic data
In the US, dates will be released on Tuesday. Wednesday turns into a full day on the economic calendar with data on what is expected to show deterioration in October, while Q3 numbers are likely to be confirmed without correction.
Other reports include numbers on those likely to be under scrutiny after the unexpected surge last week signaled that the labor market recovery may have stalled. There will also be dates for the U.S., the, and the before Thanksgiving Thursday.
On Wednesday evening, the Federal Reserve will announce its final meeting as investors wait for any discussion of a possible expansion of the asset purchase program. Meanwhile, regional Fed Presidents Thomas Barkin and Charles Evans will also make public appearances on Monday and James Bullard on Tuesday.
3. Black Friday
In a normal year, US shoppers would be preparing for Black Friday, the traditional start of the Christmas season. But this year is different. While growing coronavirus case numbers make the familiar scenes of consumers huddling into stores for bargains unlikely, it is expected that even more will be ordered online.
Oxford Economics predicts Christmas sales will only increase 0.6% year over year due to the pandemic, crumbling incomes and a weak labor market. Macy’s (NYSE 🙂 is expecting a tough time with a potential fall in sales of 20% this fall.
But things don’t look dark everywhere: Walmart predicts a promising Christmas season and the upcoming quarterly reports from Nordstrom (NYSE :), Gap Inc (NYSE 🙂 and Dollar Tree Inc (NASDAQ 🙂 will provide further insights.
4. Eurozone purchasing managers’ indices at a glance
Preliminary estimates of November business out of the euro area on Monday are likely to be grim amid the resurgent pandemic and the second round of lockdown measures put in place to contain it.
While the last month saw a small decline for most of the indicators, these values are expected to show a significant drop. This will mostly be limited to the one where all restrictive measures have been put in place so far, but they are likely to have some impact on the as well.
5. Brexit negotiations on the home stretch
Britain appears to be on the verge of reaching a post-Brexit trade deal with the European Union that would settle its relations after the transition period expires on January 1, 2021 – which is only six weeks away.
The Brexit deadlines have come and gone repeatedly in the past, but the negotiators are making one last effort and the consensus is that London and Brussels will come to an agreement – but possibly only on a framework agreement that postpones the negotiation of detailed issues until later .
Recent gains in US and UK stocks imply that investments have been solidified on hopes for a vaccine and a Brexit deal, but may have a bumpy ride ahead.
– This report was produced with the assistance of Reuters.