Insights

Top News:

11/09: Investors pushed equity markets, notably non-tech issues, higher, following added clarity on a Biden victory and encouraging efficacy data from one leading vaccine candidate.  China’s exports, which rose 11.4% in October, may face headwinds, in light of fresh European lockdowns.

 

11/10: Vaccine-driven optimism was sustained when the FDA approved an antibody treatment for emergency use for the first time.  Meanwhile, unemployment figures in the U.K. (here) and France (here) rose as Europe’s Covid-induced jobs crisis deepened. 

 

11/11: Despite earlier warnings by experts, every state in the U.S. saw record increases in new coronavirus cases over the past week, with overall hospitalizations reaching the highest point of the pandemic. Constrained economic activities and weakening consumption prompted OPEC to cut its daily global oil demand forecast in 2020 by 10% below last year’s level.

 

11/12: Another week of slow but mostly steady improvement in the weekly jobless claims picture did nothing to bridge the entrenched partisan divide over the size of long-awaited fiscal relief by Congress.  Slack in the U.S. economy was evident in October as core inflation ticked lower to an annual rate of 1.6%.  On the pandemic front, a second mRNA late stage vaccine candidate reached a key milestone, while an advisor to President-elect Biden floated the idea of a nationwide lockdown after the country registered record case numbers six times in just eight days.

 

11/13: Preliminary consumer sentiment fell in the first half of November, dragged down by elections jitters and another wall of Covid-related worries.  However, investors took comfort in October’s Producer Price Index report as a sixth straight month of uptick allayed nagging fears of deflation.  In a move likely symbolic, the Administration banned Americans from investing in Chinese companies deemed to support China’s military. 

 

 

Heard on the Street:

“Now, along with the market’s sharp rise, investor expectations have also risen… on a net-basis, we expect the market to trade in a choppy fashion near-term and the strong gains to moderate… For those investors working excess cash into the market, we would continue to average in but look to be more aggressive on pullbacks.”

— Keith Lerner, chief market strategist at SunTrust Advisory Services, quoted by MarketWatch on 11/13/2020

 

“Indeed, we think that the US unemployment rate could fall quickly enough to warrant a rate hike from the Fed in 2023… Our call does rest on a vaccine being widely available by mid-2021, and another round of stimulus no later than Q1. But assuming we get both, there should be some better-than-expected news for the US…if we look past a gloomy winter.”

— Avery Shenfeld, chief economist of CIBC World Markets, highlighted by MarketWatch on 11/9/2020

 

 

Longer Game:

The EU has fired its initial salvo against Amazon for breach of antitrust rules, portending regulatory actions against other US big techs.  Similarly, reflecting the government’s growing concerns over the influence of digital platforms, including Alibaba and Tencent, China released a draft antitrust guideline to rein in internet-based monopolies.

 

 

Bonus:

In an interview, Secretary of State Mike Pompeo stated that Taiwan hasn’t been part of China. A few hours later, China finally congratulated Biden on winning the election.