US equities are about to start the week off on the right foot, judging by the short-term trend of index futures. At the time of writing, the futures on all three benchmark indexes are up over 0.60%, with Nasdaq being the best performer so far. At the end of last week, the tech-oriented index dropped for four sessions in a row, while the S&P 500 and the Dow recovered slightly on Friday.
Today, investor sentiment is buoyed by vaccine hopes and stimulus talks, as House Speaker Nancy Pelosi continues discussions with Treasury Secretary Steven Mnuchin.
Also, Friday data showed that US retail sales rose above expectations in September, supporting the economic recovery from the COVID crisis. However, in order for the recovery to continue, the US needs another stimulus package, which has been debated for weeks between Republicans and Democrats.
Pfizer announced it might apply for US authorization for its coronavirus vaccine that it is developing in collaboration with German partner BioNTech in November. PFE share price gained over 3%, and investors remain hopeful that a working vaccine would support the economic recovery.
Apple shares have been stagnant since the launch of the new iPhone 12 series, but they can aim for a longer-term uptrend driven by the 5G race. Last Tuesday, Apple launched its first smartphones that can operate on 5G networks, thus joining rival Samsung. All devices from the new series, including the basic, Mini, Pro, and Pro Max models will support 5G, which is regarded as the fastest mobile communication technology ever. Still, this perk cannot impress today, as the new phones require a 5G infrastructure in order to demonstrate its full capacity. This is a great opportunity for mobile carriers and other companies related to the 5G race, as the new market is expected to grow tenfold in the US and the EU within the next 8 years. The Apple stock has rallied 60% year-to-date including on the 5G promise, and it may deliver thanks to carriers’ aggressive promos. For instance, AT&T clients can get a free 5G iPhone with $800 off if they trade in an iPhone 8 or more recent device.
In Asia, equities are mostly bullish on robust Chinese data and vaccines hopes.
At the time of writing, the Shanghai Composite is down 0.38%, and the Shenzhen Component has declined by down 0.36%. Both indexes started the session on a bullish note as China’s GDP had increased by 4.9% y/y in Q3, with industrial production growing 6.9% y/y for the same period. The unemployment rate fell to 5.4% from Q2’s 5.6%. Even though the figures demonstrate an economic recovery in China, equities gave up earlier gains because analysts had even higher expectations from Q3 figures.
Hong Kong’s Hang Seng Index is up 0.80%. Travel between Hong Kong and Singapore has started on the weekend.
Japan’s Nikkei 225 has surged 1.20%. Japan released trade data earlier in the day, showing that the decline in exports slowed significantly to 4.9% y/y in September from previous double-digit figures. Imports fell 17.2% y/y, resulting in a trade balance of JPY675 billion.
South Korea’s KOSPI gained 0.62%, and India’s Nifty 50 rose 0.89%.
In Australia, the ASX 200 closed 0.85% higher. The Reserve Bank of Australia (RBA) is about to release the minutes from its latest meeting tomorrow.
European stocks will open higher, with the French and Italian equities expected to surge.
In the commodity market, oil prices have declined after China’s GDP data failed to match forecasts. Still, the larger timeframes show that gold has been moving sideways since the end of June. Investors are worried about weakening crude demand dragged down by the COVID crisis. Both WTI and Brent futures are down over 0.30% at the moment.
Gold futures are up 0.12% to $1,909 on cautious stimulus hopes. Pelosi said that the deadline for another stimulus bill to get the nod from Congress is Tuesday.
In FX, the US dollar has recovered amid the stimulus uncertainty and on the back of accelerating number of new COVID cases in Europe and some parts of the US. The USD Index is up 0.05% to 93.722, and EUR/USD is down 0.06% to 1.1711.
The British pound is up over 0.15% against the euro and the US dollar amid hopes that the UK and the EU would reach some consensus. After UK Prime Minister Boris Johnson said on Friday that the EU should be ready for a no-deal divorce, his senior ministers admitted the door is still open for a deal if Europe can accept some compromise. EU and UK chief negotiators Michel Barnier and David Frost will have a phone conversation later today.
