With the markets entering the final month of the year, will investors start to hear the faint bells of a Santa rally? Or will covid get in the way?
US
The markets potentially find themselves between headlines as November tumbles into December.
It now appears that Donald Trump is going to allow for a less bumpy than expected – but far from smooth – transition to a Joe Biden presidency.
Meanwhile, in regards to vaccines, the US Food and Drug Administration aren’t meeting to discuss the emergency use authorisation of the Pfizer/BioNTech preparation until December 10th.
The two biggest news stories – and biggest market movers – of November, then may have a limited presence in the first week or so this December.
Will that cause investors to linger on the latest covid-19 headlines? It’s not like there isn’t a lot to be concerned about. At one point last week the States was seeing a covid-19 death every 40 seconds. Lockdowns are being extended around the world. And the global number of cases is now above 60 million. Without distractions, panic could start to creep in.
How the week eventually pans out will be in part determined by Friday’s nonfarm jobs report. The headline figure has been steady falling month-on-month from that 4.8 million peak posted in June. Between September and October the drop-off slowed down, slipping from 661k to 638k – will that hold, or is the reading set to fall under half a million?
Meanwhile the unemployment rate is currently sitting at 6.9%, while the average hourly earnings figure last came in at 0.1%.
Before that you’ve got the Chicago PMI and pending home sales on Monday, the final Markit and ISM manufacturing PMIs on Tuesday, the ADP nonfarm employment change reading on Wednesday, and the jobless claims and final Markit and ISM service PMIs data on Friday.
UK
The closer we move to the end of the year, and that December 31st Brexit deal deadline, the more fretful the pound may get. What’s unclear is whether the FTSE will share sterling’s concerns, or whether it will continue to rise whenever the currency is under pressure.
Alongside the perpetual hum of Brexit and covid-19 anxiety, the UK is also facing a commodity-focused start to the week, with the latest PMIs out of China and a set of OPEC meetings on Monday.
Tuesday then has the UK’s final manufacturing PMI, with the services reading on Thursday and the construction number on Friday.
Eurozone
The Eurozone data week follows a similar pattern to elsewhere, with German and Spanish inflation on Monday, German retail sales and the final manufacturing PMIs on Tuesday, Spanish unemployment on Wednesday, the final services PMIs on Thursday and Italian retail sales and German factory orders on Friday.
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