Please find the latest edition of Weekly Digest attached.
Politics remained in focus last week, with little progress made on agreeing a new stimulus package in the US. While House Majority Leader Nancy Pelosi continued to sound optimistic, both sides accused the other of moving the goalposts and showed few signs of being able to actually agree a deal. Negotiations are typically characterised by brinkmanship and ‘going to the wire’, but in this case the chances of deal before the election in eight days do look slim.
Coronavirus developments were mixed, with more restrictions being imposed in Europe (Italy and Spain) but some encouraging news on the vaccine front. The AstraZeneca/Oxford University trial reported robust immune responses in elderly people, and in the US the FDA gave approval for the trials of this vaccine, along with Johnson & Johnson’s candidate, to resume. Retail sales are now actually up year-on-year for a number of countries, and recent data suggests that global trade is recovering well:
With only eight days to go until the US election, the first polls to emerge since the last debate show little change with Mr Biden still having a high single-digit lead. Fivethirtyeight.com has his chances of winning at 87%, with the ‘Blue Wave’ that would give Democrats control of the Senate still at 73%. Indications from early voting in six battleground states appear to heavily favour the Democrats, who will also benefit most from mail-in votes. With the deadline for receipt of mail-in votes in some key states being several days after polling day, the prospects of a contested election if it close ‘on the day’ remain alive and well.
The latest Brexit developments over the weekend appeared to augur relatively well for the prospects of a deal, as the EU’s chief negotiator Michel Barnier agreed to stay in London this week.
In China, preparations for the next (14th) five-year plan have started this week, with technological innovation, economic self-reliance and a cleaner environment expected to be the key themes.
This week is a busy one for both economic and corporate news. On the economic front the main focus will be Thursday’s meeting of the European Central Bank. No immediate change in policy is expected but the focus will be on the extent of the bank’s willingness to extend further policy accommodation in the coming months. Also on Thursday we will have the first estimate of US Q3 GDP, along with the usual weekly jobless figures, as well as Eurozone consumer confidence.
The corporate reporting season is in full swing this week. Among the names we are interested in, we have already seen a disappointing Q3 and outlook from SAP today; tomorrow we have Novartis, Whitbread, Roper, HSBC, BP and Microsoft; Wednesday sees Next, GlaxoSmithKline and Visa; Thursday is a bumper day for Tech, with Amazon, Alphabet, Facebook and Apple all scheduled to report, as well as Royal Dutch Shell, Smith & Nephew, and Xylem; Friday sees updates from both Total and Novo Nordisk.