In the final full week of November, one defined by election drama and vaccine relief, what will investors have to be thankful for?
US: What will markets be thankful for this Thanksgiving?
It’s a curtailed week for the Dow Jones and co., due to Thanksgiving on Thursday, and then an empty calendar the day after – though retail stocks may be worth a watch due to the rush of Black Friday and Cyber Monday.
Investors are likely going to remain preoccupied by same 3 things that have had top billing throughout the month: covid-19 numbers, vaccine updates and the election aftermath.
The first of those items is the most worrying – yet it always seems to take a critical mass of bad news for investors to really pay attention. Sooner rather than later, however, the numbers coming out of America are going to be hard to ignore, especially since Trump doesn’t seem interested at all in fighting the virus. It’s all well and good investors look ahead to the vaccine future, but they also need to grapple with the impact of our pandemic present.
Speaking of vaccines, the Pfizer/BioNTech and Moderna updates – with reports of 90% and 95% effectiveness respectively – have been, even more than Joe Biden’s election victory, the main drivers of growth in November. Any further word on trials from around the world could give juice to a rally that has seen the Dow repeatedly flirt with the 30,000 mark as it surged to new record highs.
Finally there’s the election aftermath, which, though it has taken a clear backseat to the vaccine headlines, is still a concern – especially when it comes to the harm a disorderly transition would do to the fight against covid-19. It will be interesting whether the markets will get a sizeable boost when (or sadly, if) Donald Trump eventually concedes.
Elsewhere, it’s a front-loaded week for data, starting with the flash manufacturing and services PMIs on Monday. Both have held up well since returning to growth over the summer, so investors will be hoping for, at worst, another pair of mid-50s readings.
On Tuesday you’ve then got the CB consumer confidence number, while on Wednesday’s an early jobless claims figure is joined by the latest durable goods orders, and a second look at Q3 GDP, which initially came in at 38% at the annualised rate.
UK: Vaccine hopes and covid-19 fears
Beyond the aftermath of the latest round of Brexit negotiations, the FTSE is going to be driven by the same vaccine hopes and covid-19 fears as the rest of the markets. In terms of data, the services PMI is perhaps in danger of falling back into contraction territory on Monday, while the manufacturing sector has a bit more of a buffer.
UK: Stocks to watch
As for the corporate calendar, the DMGT report on Monday, with AO World, Greencore, Pennon Group and Pets at Home on Tuesday, De La Rue and Brewin Dolphin on Wednesday, Severn Trent on Thursday and Reach on Friday.
Eurozone
Over in the Eurozone, the region has a similar path to the US and UK markets, though investors will also be looking out for news of more lockdown restrictions on the continent.
Monday has the German, French and Eurozone-wide flash PMIs, the German Ifo business climate reading on Tuesday, the ECB financial stability review on Wednesday, German Gfk consumer climate on Thursday and French inflation on Friday.
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