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Election Debate, Virus Deaths and Fed Speakers: What's up in Markets on Tuesday

EconomySep 29, 2020 11:34
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By Geoffrey Smith --  Donald Trump and Joe Biden face off, the virus claims its one millionth victim as Mike Pence warns of rising infection numbers, Fed speakers galore - and the Turkish and Russian currencies weaken as their allies square off in the Caucasus. Here's what you need to know in markets on Tuesday, September 29th.

1. Seconds out, round one

Donald Trump and Joe Biden will take part in their first head-to-head debate ahead of the presidential election at 9 PM ET (1700 GMT).

The state of the economy, the handling of the pandemic and issues of racial inequality and law and order are likely to top the bill. One further issue of note is likely to be Trump’s tax records, which were leaked by the New York Times at the weekend.

Opinion polls suggest that at the moment, the election is Biden’s to lose: an average of polls on put him nearly 7 points ahead nationally. The debates are nonetheless likely to be a severe test of the 77 year-old’s powers of concentration, which Trump has repeatedly flagged as a weakness in his opponent.

2. Covid-19 hits the million milestone

Covid-19 has now officially killed more than 1 million people worldwide, according to data from Johns Hopkins.

There’s no particular power in such numbers, but markets remain under pressure from signs of rising infections across much of Europe and the U.S.  Vice-President Mike Pence, who argued during the summer that there was no ‘second wave’, said on Monday that Americans should expect case numbers to rise in the coming days. While he put this down to more widespread testing, positivity rates have also risen across much of the Midwest in recent days.

Deaths from the virus rose 40% in England and Wales to their highest in five weeks, while German Chancellor Angela Merkel warned she might impose tighter restrictions on public gatherings to pre-empt a further surge in infections.

On the brighter side, India – which has been the world’s virus hotspot in recent weeks – posted its lowest level of new infections in nearly a month.

3. Stocks consolidate after big gains

U.S. stock markets are poised to open largely flat ahead of Tuesday’s presidential debate, consolidating after rapid gains over the last two sessions.

By 6:30 AM ET (1030 GMT), Dow futures and S&P 500 Futures were both flat, while NASDAQ Futures were down 0.1%.

Markets reacted with skepticism overnight to new proposals from House Democrats for a $2.2 trillion stimulus package for the economy. The numbers remain far above what the Republican-controlled Senate has signalled it will approve.

Stocks likely to be in focus later include chipmaker Micron (NASDAQ:MU) and cruise operator Carnival (NYSE:CUK), both of which release quarterly updates.  Investors will also be on the lookout for more details about Palantir’s IPO. It’s set to start trading on Friday.

4. Fed speakers, consumer confidence, house price data due

The data calendar fills up a bit more today, with updates from the Conference Board on consumer confidence at 10 AM ET, and the S&P/Case-Shiller house price index for July an hour before that.

A raft of speakers from the Federal Reserve will also hit the newswires, starting with New York’s John Williams (NYSE:WMB) at 9:15 AM and ending with bank supervision head Randall Quarles at 3 PM. Influential Vice-Chair Richard Clarida is sandwiched between them at 11:40 AM ET.

European data overnight pointed to persistent weakness in consumer prices in the euro zone in September, which followed an overwhelmingly dovish address to the European parliament by ECB President Christine Lagarde on Monday.  

5. Caucasus fighting hits currencies; oil not so much

Oil prices fell in overnight trading, as a brief rally on geopolitical concerns ran out of steam ahead of the weekly update on U.S. crude stockpiles from the American Petroleum Institute.

By 6:30 AM ET (1030 GMT), U.S. crude futures were down 0.5% at $40.39 a barrel, while Brent futures were down 0.5% at $42.66 a barrel

The eruption of fighting between Azerbaijan and Armenia briefly raised concerns about the security of a 1.2 million barrel-a-day pipeline that takes Azeri crude to the Mediterranean. The two former Soviet republics both have powerful supporters in Turkey and Russia, who exercise considerable influence over both.

While the fighting hasn’t had a durable impact on oil prices, yet, it has hit both the Turkish and Russian currencies, which both fell against the dollar (the Turkish lira hitting another all-time low overnight).


Election Debate, Virus Deaths and Fed Speakers: What's up in Markets on Tuesday

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