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October 8, 2020

Congressional ‘Super Committee’ Fails to Reach Budget Agreement; S&P 500 Pressures Support at 1180

The Euro managed to gain back some of its Monday losses after European Finance Ministers approved the next loan disbursement to Greece (valued at (8 billion Euros), which will be paid out at the end of the month.  This helped equity markets and risk sentiment on the whole but this was tempered by comments from Fitch which suggested that the credit outlook rating in the US might be changed from “stable” to “negative”  despite the fact that the other ratings agencies are not expected to make similar moves.

On balance, markets appear to be looking at these issues favorably but there is also the possibility that the rise in equities and high yielding currencies should be viewed as profit taking on short positions rather than a genuine shift in the underlying bias.  Macro data will come mostly from the US today (as there are no major government or corporate releases scheduled in Europe, Asia or the UK).

US releases will be seen with GDP and Personal Consumption Data, which come with the Richmond Fed Manufacturing Survey and the latest FOMC monetary policy meeting minutes.  US corporate earnings are mostly from second tier companies but Hewlett-Packard was the main story yesterday, losing 2.3 percent in aftermarket trading on weaker expectations for fourth quarter earnings (driven by write-downs and slower PC sales).

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About Dorothy A Wheeler

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