Week Ahead: Tesla and Netflix top Q3 earnings season bill

Week Ahead

Earnings season on Wall Street revs up this week with Tesla due to report its Q3 results after delivering a record number of vehicles during the quarter. Meanwhile Covid top pick Netflix will update the market on its quarterly earnings performance and subscriber additions. Elsewhere the data is quite light this week with the focus on the flash PMIs on Friday. 

Tesla 

Tesla shares have soared around 450% this year as the company has driven sales and profits higher whilst also allaying concerns about its balance sheet. The company reports Q3 numbers on Wednesday, with investors expecting strong earnings off the back of a record quarterly delivery number. Tesla delivered 139,300 vehicles in the third quarter and produced 145,036. This marked a significant uptick from the roughly 90,000 delivered in Q2.  

Baird analyst Ben Kallo recently raised his price target on TSLA by 25%. In a note reiterating a neutral rating that he’s had on the stock since January, the analyst raised the price target to $450 from $360. He thinks the company can start to refocus on investment in growth following the stock’s rally.  

“We have experienced increased inbound interest in TSLA, particularly deciphering the bull/bear case from here,” Kallo wrote. “Interestingly, we have found investors increasingly focused on 2025+ blue-sky scenarios, in stark contrast to a few months ago when the primary focus was on the upcoming quarter.” Analysts remain split on Tesla, with 7 Buy, 10 Sell and 13 Hold/Neutral ratings. 

 

Netflix 

A big focus for the market will be the number of subscribers Netflix managed to add in the third quarter. Lockdowns around the world delivered a huge boost in the first half of 2020, with paid net subscriber additions soaring to 26m from 12m during the same period a year before. The company has forecast 2.5m paid net adds for Q3 versus 6.8m in the prior year quarter as the surge in H1 likely pulled forward some demand from the second half of the year. However, this could be a very conservative estimate and Netflix could beat this number handsomely. 

Investors will also be looking at the cash burn as production schedules fill up again; the investment in content is both a cost but also seen as an important lever for Netflix in overcoming rivals in an increasingly competitive space. “Netflix’s content library investment allowed the company to evolve from a platform to watch re-runs to a quality source of original content, and now a destination for some of the biggest movie premieres, which makes the service an essential part of any consumer entertainment bundle,” analysts at Cannacord said earlier this year. 

Goldman Sachs, which has previously noted that the company’s “massive content investments, global distribution ecosystem and improving competitive position will further drive financial results significantly above consensus expectations”, recently raised its price target on the stock to $670 from $600, citing better-than-expected Q3 results as a likely bull catalyst.  

Don’t forget to tune into our Daily Earnings Season Specials on XRay for more updates

Economic data 

Global economic data is rather thin on the ground. The focus will be on earnings season on Wall Street to provide a steer for markets. As just about the only country expected to growth this year, China’s GDP, industrial production and fixed asset investment numbers due on Monday will help gie the markets some direction early in the week. UK retail sales and inflation numbers will be parsed for any clues as to whether the Bank of England might take interest rates negative, after it sent a letter to banks asking for their readiness for taking rates below the zero-lower bound. Friday sees the release of the flash manufacturing and services PMIs for the US, UK, Eurozone, Japan and Australia. These will help show whether the reopening momentum is fading as quickly as bears fear. 

US Election Watch 

Finally, investors will need to keep a close watch on the US elections, with the narrative of late focusing on a Blue-wave victory for Democrats that could unleash a flood of fiscal stimulus on to the market. Polling data has shown Joe Biden with a healthy lead over Donald Trump in the polls, however his lead in the key battleground states that will decide the election is a lot narrower. Moreover, Trump was actually doing worse at this stage four years ago when we look at the most important swing states. The race for the Senate is taking on extra interest given the assumption that Biden will triumph – a Republican Senate could seriously hamper reform efforts. Expect volatility to increase as the election nears, but as our friends at BlondeMoney pointed out last week, fears of a disputed result may be overblown.

 

Top Economic Data This Week

Date  Event 
Oct 19th  China GDP, fixed asset investment, industrial production 
Oct 19th  BOC business outlook survey 
Oct 20th  RBA meeting minutes 
Oct 21st  UK CPI inflation 
Oct 21st  Canada CPI, retail sales 
Oct 21st  US crude oil inventories 
Oct 21st  Fed Beige Book 
Oct 22nd  German Gfk consumer climate 
Oct 22nd  US weekly initial jobless claims 
Oct 22nd  US CB leading index 
Oct 22nd  Nat gas storage 
Oct 22nd  New Zealand CPI inflation 
Oct 23rd  Flash PMIs – AUS, EZ, Japan, UK, US 
Oct 23rd  UK retail sales 

 

Top Earnings Reports This Week

Don’t forget to tune into our Daily Earnings Season Specials on XRay for more updates

Date  Company 
Oct 20th   Procter & Gamble 
Oct 20th   Netflix 
Oct 21st  Tesla 
Oct 21st  Verizon 
Oct 22nd  Amazon* 
Oct 22nd  Intel 
Oct 22nd  Coca-cola 
Oct 22nd  AT&T 
Oct 21st   NextEra Energy 
Oct 20th   Lockheed Martin  
Oct 23rd  American Express 
Oct 23rd  Daimler 
Oct 21st  Biogen 
Oct 19th   Philips 
Oct 20th   UBS 
Oct 20th   Snap (Snapchat) 
Oct 19th   IBM 
Oct 22nd  Valero Energy 
Oct 20th   Vinci 
Oct 20th   Reckitt Benckiser 
Oct 21st   Countrywide 
Oct 21st   William Hill 
Oct 21st   Metro Bank 
Oct 21st   Centamin 

*Slated for this date 

 

 

Election update: Blue-nami flips to consensus bull catalyst

US Presidential Election

US presidential election update: Bank of America strategists say the Blue-nami outcome, which had been initially considered negative for equities, is being priced in better by the market and may now be a positive. “Blue wave election outcome (Democrats winning) has curiously flipped from consensus bear to bull catalyst in recent months,” they say. 

The S&P 500 corrected through September, flushing out some of the weaker hands and allowing longs to cautiously rebuild as the market traded the 3200-3400 range. The recent upside break came despite negotiations around a broad $2.2tn stimulus package all but breaking down entirely. In this period polls have reverted to showing a greater likelihood of a Biden win and odds shortening on a Democrat clean sweep. 

As noted in our election playbookthere are lots of reasons why the market could really like a Biden presidency, even if tax and regulation could be a problem.  

Clean sweep

Ultimately though it may matter less in the long run who enters the White House than whether the Senate turns blue or stays red. Unusually, the economy may benefit more from unity than the current polarisation – the normal idea that gridlock in Washington is good, because it stops politicians from interfering with the free market, doesn’t quite wash this time. 

The pandemic has upended the norms and the economic backdrop to this election. Cohesion in Washington would likely deliver the kind of fiscal stimulus required to flood the economy with money and get the wheels turning again. 

A Democrat clean sweep would probably result in a far larger package of support and therefore deliver a much stronger stimulus than we would anticipate if Trump wins and the Senate remains in Republican hands whilst the House of Representatives stays blue. Biden’s plans to stimulate the economy involve enormous spending pledges – and to be fair, an increase in the budget deficit is exactly what the economy needs right now. The Federal Reserve has already said it will not get in the way by raising rates should inflation emerge – a major policy shift announced in August that has huge implications for the economy and the application of fiscal policy. 

Wall St or Main St?

Joe Biden would raise taxes, which is supposed to be bad, but Trump’s tax cuts disproportionately benefited the rich, large corporations and people who own stocks. This does not generate additional consumer spend in the same way as a more evenly distributed tax cut. To borrow a line from a leading economist, how many additional swimming pools did Jeff Bezos put in because his tax rate fell under Trump? 

JPMorgan conducted an investor survey recently: 79 per cent said the worst-case scenario would be a Democrat president and Senate, whilst 49 per cent said the best would be a Republican president and Senate. But that may be more about a fear of regulation (and higher taxes) than a belief that a Biden presidency and Democrat clean sweep would be bad for stocks. 

Meanwhile the BoA report also highlighted how renewable energy stocks may front run a Democratic victory in presidential and Congressional elections. Clean energy stocks make up a large part of our Biden20 Blend. 

Week Ahead: Trump and Biden to face off in first Presidential Debate

Week Ahead

It’s a big week for financial markets, as the first US Presidential Debate kicks off on Tuesday. Donald Trump has spent a long time attacking ‘Sleepy Joe’s’ mental prowess, but has he accidentally set the bar too low for his opponent, or will Biden’s verbal blunders see him put on a poor show? 

After the two candidates have argued about the economy we’ll get another update on the labour market when the nonfarm payrolls report is published on Friday. 

Fireworks likely at first US Presidential Debate

Headline risks surrounding the US Presidential Election will shoot higher this week as President Donald Trump and Democratic nominee Joe Biden get ready for the first Presidential Debate on September 29th. Topics are liable to change in response to the latest new events, but at the time of writing the debate commission had announced the following itinerary: 

  • The Trump and Biden Records 
  • The Supreme Court 
  • Covid-19 
  • The Economy 
  • Race and Violence in our Cities 
  • The Integrity of the Election 

It’s a list of huge controversies, but even with such important topics, can the debates do much to swing the opinion of such a highly-polarized electorate? 

Biden leads Trump by 7.1% in the national polls according to our election poll tracker. Much has been made of his age and his verbal blunders and there’s a risk he’ll find himself flattened by Trump’s aggressive debating style. 

However, thanks to months of the President attacking ‘Sleepy Joe’s’ mental capacity, some Republicans fear that Trump has actually set the bar incredibly low for Biden. 

Nonfarm Payrolls

A few days after Trump and Biden have argued over the state of the economy, we’ll get another look at the health of the labour market. Payrolls growth slightly undershot forecasts in August, coming in at 1.371 million against expectations for 1.4 million. 

Of the more-than 22 million Americans who lost their jobs towards the start of the pandemic, 11.5 million of them are still out of work. There’s still a long way to go until the labour market has recovered and some analysts are expecting the pace of job creation to have softened again. 

Inflation, Caixin and ISM PMIs, finalised growth figures

Other data in focus next week includes Germany and Eurozone flash inflation reports and the China Caixin Manufacturing PMI. Thursday will be a busy day for US data, with core PCE, personal income, personal spending, initial and continuing jobless claims and the ISM Manufacturing PMI all in the docket. 

Finalised quarterly growth figures from the US and UK and finalised manufacturing PMIs from Eurozone member states and the UK could garner some interest if the figures differ notably from initial readings. 

Earnings: McCormick, Micron, PepsiCo, Constellation Brands

Tuesday sees the latest earnings reports from McCormick & Co before the New York open and Micron Technology after the close. 

McCormick has fallen -12% from its September 1st peak, but remains 65% above its March lows. Both hedge funds and company insiders have been selling the stock recently, which is trading -9% below its average price target on Wall Street. 

Micron Technology, on the other hand, has a 27% upside, although it has also experienced heavy selling in the past quarter. 

On Thursday PepsiCo and Constellation Brands both report before the opening bell. After the March recovery PepsiCo has struggled to hold above opening levels and is currently down over -4% on the year. You can download the latest research on the stock by Thompson Reuters in the platform. 

Constellation Brands is virtually flat for the year. Analysts see a 9% upside for the stock. 

Highlights on XRay this Week 

Read the full schedule of financial market analysis and training.

17.00 UTC 28⁠-⁠Sep Blonde Markets
17.00 UTC 29⁠⁠⁠⁠-⁠⁠⁠⁠⁠⁠⁠Sep Webinar: Money Management and Trading Psychology
11.00 UTC 30⁠⁠⁠-⁠⁠⁠⁠⁠⁠⁠Sep Midweek Lunch Wrap
17.00 UTC 01-Oct Election2020 Weekly

Key Events this Week

Watch out for the biggest events on the economic calendar this week. A full economic and corporate events calendar is available in the platform.

23.50 UTC 28-Sep Bank of Japan Summary of Opinions
Pre-Market 29-Sep McCormick & Co – Q3 2020
12.00 UTC 29-Sep German Flash Inflation
14.00 UTC 29-Sep US CB Consumer Confidence
23.50 UTC 29-Sep Japan Preliminary Industrial Production / Retail Sales
After-Market 29-Sep Micron Technology – Q4 2020
01.45 UTC 30-Sep China Caixin Manufacturing PMI
06.00 UTC 30-Sep UK Finalised Quarterly GDP
09.00 UTC 30-Sep Eurozone Flash Inflation Data
12.30 UTC 30-Sep US Finalised Quarterly GDP
14.30 UTC 30-Sep US EIA Crude Oil Inventories
07.15 – 08.00 UTC 01-Oct Eurozone Final Manufacturing PMIs
08.30 UTC 01-Oct UK Final Manufacturing PMI
Pre-Market 01-Oct PepsiCo – Q3 2020
Pre-Market 01-Oct Constellation Brands – Q2 2021
12.30 UTC 01-Oct US Core PCE, Personal Income, Personal Spending, Jobless Claims
14.00 UTC 01-Oct US ISM Manufacturing PMI
14.30 UTC 01-Oct US EIA Natural Gas Storage
01.30 UTC 02-Oct Australia Retail Sales
12.30 UTC 02-Oct US Nonfarm Payrolls Report
14.00 UTC 02-Oct Finalised University of Michigan Sentiment

Congressional Elections: Why do they matter?

US Presidential Election

While the race for the White House has received outsized attention, developments such as the failure to reach a new coronavirus relief bill and the looming threat of a government shutdown have heightened the stakes in the battle for control of Congress.

The House of Representatives looks firmly in the hands of the Democrats after the inroads they made in the 2018 midterms. Control of the Senate is therefore crucial. It’s currently in Republican hands and the Democrats would need to win four seats of the twenty-three up for grabs in order to gain an overall majority.

With Biden ahead in the Presidential polls, can the Democrats feel confident about the Senate?

With party now trumping candidate, the general momentum towards the Democrats should give them some hope. 2016 was the first year on record where every single state holding Senate elections voted for the same party for Senate as for president.

It’s no longer the case that voters split their ticket when they go to the polls. For example in 1980, despite Republican Ronald Reagan winning the White House, 12 of 31 Senate seats went to the Democrats.

Now though, the electorate is so polarized that party dominates across elections. If you voted Trump, you vote Republican across your ballot paper.

This means state-wide elections have increasingly been nationalized: Senators struggle to separate themselves from their national parties. This has been exacerbated under President Trump, where almost every Republican Senator has embraced him of fear of losing his conservative base – this is especially the case for the Republican Senator in Arizona, Martha McSally, who has pivoted to the right and linked her fate inextricably to Trump’s.

Rare candidates, like Maine Senator Susan Collins, have been able to maintain an identity distinct to the national party’s and keep split-ticket voting alive – but even Collins’ long-time local reputation as an independent, in a centrist state with a history of electing moderate women, is under threat for her polarizing pro-Trump voting record. She backed Brett Kavanaugh for his confirmation to the Supreme Court, in support of her President – and saw her popularity with female voters plummet.

Replacement for Ruth Bader Ginsburg becomes key election issue

With any coronavirus relief unlikely to pass before the election, control of the Senate will be crucial to any alleviation of the recession. This has been exacerbated by the death of Supreme Court Justice Ruth Bader Ginsburg.  Party politics will now be bogged down in finding her replacement, rather than finding a fiscal compromise.

While Trump has made this a key issue, going as far as releasing an unsurprisingly political list of possible appointees, Biden has in turn also made this a focus of his candidacy, promising to nominate a historic first: a black woman. Given the increasing frequency of constitutional hardball around Supreme Court confirmations, control of the Senate will be a prerequisite to a successful nominee.

Given that the states in the Senate up for re-election are very Republican, this development will energise the base, reducing the likelihood of a Democratic majority.

However, on the Presidential level, the blue wall which deserted Hillary Clinton in 2016 looks likely to be rebuilt, given the intensely partisan nature of the battle to come. Mitch McConnell should be pleased by this weekend’s news, Donald Trump should not.

With both sides becoming more entrenched the elections look set to deliver a split between the legislature and the executive. With a more polarized Congress, key platform items promised by both candidates will be tougher to achieve. Expect partisan  investigations and tense hearings to persist no matter who wins.

US Presidential Election Weekly: Federal Reserve & US Election

US Presidential Election

Our resident political commentator, XRay regular and Blonde Money CEO Helen Thomas, takes a look at the latest big developments in the race for the White House. This week, the focus is on why the Federal Reserve’s switch to average inflation targeting could help Donald Trump in the polls over the coming weeks.

Don’t forget you can catch more great insight from Helen every week with Blonde Markets and our Election2020 Weekly shows on XRay. For all the latest election updates, including polling data, visit our US Presidential Election 2020 microsite.

The stock market rally is facing a major hurdle

Morning Note

European equities opened firmer again on Thursday morning, extending gains from a very strong session on Wall Street. France’s CAC led the way after President Macron announced an extra €100bn stimulus package over two years. Remember the EU’s bailout fund is still to be delivered. The FTSE 100 moved back towards the 6,000 level as the pound came under further pressure from a resurgent dollar.

US stocks power higher, but Vix raises red flag

US equity markets jumped – the Dow and S&P 500 both rallied more than 1.5% on another strong day for equities. But Vix futures show no signs of backing down either, which indicates fears about the sustainability of the rally. Technical indicators are stretched too – the 14-day relative strength index is flashing a warning light at above 80 for the S&P 500.

Many of the top stocks like Apple are also trading above 80 on the RSI. Salesforce and Apple fell, but there were otherwise broad gains for the Dow, with the likes of IBM and Coca-Cola leading the way. Tesla was down 5% after its stock sale announcement. Apple remains +20% over the last month, representative of the wider tech trend, which remains strong.

Citi this morning upgraded their call on Value stocks from ‘neutral’ to ‘positive’, however they caveat this by saying they mean Value ex-Financials. Whilst rising inflation breakevens favour cyclical value stocks, low nominal rates continue to weigh on financials.

The S&P 500 continued to extend above its long-term weekly trend line (in red) and is really starting to push the envelope to breaking point.

Vix futures (Sep) are extending higher but the sharp contango between the front and back months is extreme with October printing above 35. This risk premium implied by the options market is simply not being reflected by equity markets.

Global economy slow to recover from Covid slump

Economic indicators continue to show a slow recovery. The Fed’s Beige Book – an anecdotal snapshot of businesses across the US – noted that “activity remained well below levels prior to the COVID-19 pandemic”.

PMIs continue to show a slowdown in August – following some softer European numbers, China’s Caixin services PMI slipped to 54 from 54.1 last month. Italy’s services PMI slipped to 47.1 in August from 51.6 in July, indicating businesses think things are getting worse, not better.

US jobs numbers were poor – the ADP report showed the US private sector added just 428,000 jobs in August, which was less than half what was forecast. It bodes ill for Friday’s nonfarm payrolls report. Today’s initial claims number is forecast to come in under 1m, but the slow pace of jobs growth relative to layoffs earlier in the year continue to point to a very long, slow recovery in the labour market.

On a happier note – the New York Times reported that the US Centers for Disease Control and Prevention informed officials to get ready to distribute a potential coronavirus vaccine as early as October. There are several candidates are in the running and there is clearly a lot more confidence we will have a vaccine and be able to declare victory over Covid.

Sanofi and GSK announced today the start of their Phase 1/2 clinical trial for their adjuvanted Covid-19 vaccine. If the trials are positive, the companies aim to move into a Phase 3 trial by end of 2020 and target producing up to one billion doses in 2021.

Odds of Trump re-election grow as White House race grows tighter

Yesterday, betting markets turned in favour of Donald Trump being re-elected. The RCP average showed Trump +0.1pt over Biden at 49.8 to 49.7. Whilst clearly too close to call, the speed at which Trump has narrowed the gap shows how quickly things can change. Betting markets are not, however, the same as polls. They are only market participants’ best guess at what the outcome will be.

But according to our US Presidential Election poll tracker, polls also show a tighter race. On a national level Trump is polling better than at any time since May and has eaten into Biden’s clear lead, which remains strong. However, looking into the key battlegrounds where we know the fight will be bitterest and where it really counts, the lead Biden has is also narrowing and now well within the margin for error area.

The RCP data showed Biden at +2.6 in the top battlegrounds, having been more than +6pts in July. By Thursday however, Biden bolstered his lead again to +3.3 in the battleground states. Suffice to say, the race is going to be very close.

Increasingly we see the biggest risk to market stability being a disputed election result, which would considerably dent risk appetite going into the end of the year. Will President Trump resist leaving the White House? Will Biden refuse to concede on the night goes against him even if the vote on the night goes against him? Lots of risks ahead. A clean sweep for the Democrats would mean more regulation and more taxes.

Yields have come back down to pre-Jackson Hole levels with US 10s back at 0.647%. Gold slipped further from the Tuesday swing high towards $1930 and again contending with long-term trend support.

The dollar notched further gains – GBPUSD has retreated to take a 1.32 handle and EURUSD briefly taking a 1.17 handle again. The unwind for these pairs has been sharp but it still looks to be a tough period for USD.

Oil settled lower at its weakest in a month despite a large draw on oil inventories. WTI slipped to $42 as the temporary nature of the shut-ins from Hurricane Laura failed to offer support. The EIA said US crude inventories fell by 9.4m barrels for the week ended Aug 28th, after the API had reported a drop of 6.4m barrels.

Election2020 quick briefing: Trump catches up, markets price for pullback

US Presidential Election
  • Trump catches Biden in betting markets
  • Polls narrow further as race tightens
  • Options markets show concern

September 2nd saw an important development as betting markets turned in favour of Donald Trump being re-elected. The RCP average showed Trump +0.1pt over Biden at 49.8 to 49.7. Whilst clearly too close to call, the speed at which Trump has narrowed the gap shows how quickly things can change.

Betting markets are not, however, the same as polls. They are only market participants’ best guess at what the outcome will be.

US Presidential Election polls tighten as Trump eats into Biden’s lead

But polls also show a tighter race. Our US election poll tracker, which is powered by data from Real Clear Politics, has come in sharply. On a national level Trump is polling better than at any time since May and has eaten into Biden’s clear lead, which remains strong.

However, looking into the key battlegrounds where we know the fight will be bitterest and where it really counts, the lead Biden has is also narrowing and now well within the margin for error area. The latest RCP data shows Biden at +2.6 in the top battlegrounds, having been more than +6pts in July. Trump currently stands on 45.4 vs Biden’s 48.

Vix signals heightened election nerves

The tighter race is being displayed by more implied volatility in options markets for the S&P 500 than the stock market itself is showing. We have talked in the last few days about the Vix moving steadily higher even as the SPX rises – futures again pointing higher today after Tuesday’s record close.

This is the first red flag. The second is the term structure of the Vix futures curve which shows significant increase in expected volatility come Oct and Nov with a sharp 20% contango between the front and back months. Compare for example the CBOE Volatility Index Oct 2020 close at 33.51 vs the front month (Sep) at 28.35. Nov traded at 31.80.

This contango in the Vix is at odds with the general grind higher we are seeing and signals genuine anxiety among investors that the election will create the conditions for pullback.

Our Trump20 Blend – comprised of stocks seen as being most exposed to changes to corporate tax rates – is up but has lagged the broad market in recent days, whilst the dollar has softened despite a decent recovery on Wednesday.

Funnily enough, whilst the implied volatility is elevated around the election, all else being equal Trump’s low-tax, low-regulation agenda ought to be more positive for the stock market than a Democrat clean sweep would be. What this increased volatility may represent more is in fact investor fears about a disputed election result, which would considerably dent risk appetite going into the end of the year.

US Presidential Election Weekly: Republican National Convention

US Presidential Election

Our resident political commentator, XRay regular and Blonde Money CEO Helen Thomas, takes a look at the latest big developments in the race for the White House. This week, the focus is on the Republican National Convention.

Don’t forget you can catch more great insight from Helen every week with Blonde Markets and our Election2020 Weekly shows on XRay. For all the latest election updates, including polling data, visit our US Presidential Election 2020 microsite.

Trump approval rating holds up as Republican convention draws to close, battlegrounds tighten

US Presidential Election

We know that the Presidential race will come down to a handful of key swing states. But national polls still tell us something about the direction of the campaigns.

As the Republican convention draws to a close this week, the latest polls indicate Donald Trump’s standing remains at least stable. NBC News|SurveyMonkey Weekly Tracking Poll shows that 45% of American adults strongly or somewhat approve Trump’s performance, 54% disapprove.

Meanwhile there has been evidence that the race is tightening. This should not come as a great surprise – national polls showing Biden with a double-digit lead were never going to hold once the campaign proper got underway.

What’s interesting is the direction of travel in Trump’s favour in some key battleground states.

According to a recent CNN poll, the national split was 50% for Biden-Harris and 46% for Trump-Pence. That is within margin-of-error territory.

But drill down to the most important states for the Electoral College and it’s even tighter. In 15 battleground states the poll showed Biden with just a single percentage point lead – with the Democrat on 49% and Trump on 48%. The latest poll for Wisconsin shows Trump edging it for the first time in months.

According to RealClearPolitics, which powers our Election Coverage, Trump trails on 42.4% to Biden’s 50% nationally. But in the battlegrounds the gap is narrowing, and Trump leads in some. 

And as can be seen by the electoral map, it looks like a toss up as to who will win in November.

Week Ahead: Republican convention fires starting pistol on Presidential election

Week Ahead

The Republican convention this week marks the end of the phoney war and start of the campaign proper in the race to the White House. After striking a record high last week, investors are eyeing a potential rise in volatility as the election approaches. Meanwhile there will be a lot of backwards-looking data to be released in the coming days that could move the markets.  

Republican convention fires campaign starting pistol 

The Republican convention will not only mark the starting pistol for this year’s presidential run, but also the race for the 2024 GOP candidate. Market attention will increasingly come around to the November presidential race with barely over two months left until polling day. Vix futures indicate investors are starting to position for more volatility as the election approaches. Find out all you need to know about the election and follow our special coverage.

Economic data to watch 

There is a lot of economic data to get through this week. New Zealand’s retail sales print gets us underway as markets open for the trading week. On Tuesday we are looking at a couple of tentatively scheduled events – the UK’s monetary policy report hearings and US Tresury currency report. Certain to happen that day is the US CB consumer confidence report. 

Wednesday sees the weekly crude oil inventories report as well as US durable goods orders and Australian construction activity. On Thursday the US weekly initial jobless claims number gets released, which has become the most-closely watched high frequency economic indicator. Look also at the pending home sales and preliminary (second estimate) GDP numbers. 

More US data rounds out the week on Friday with the Fed’s preferred inflation gauge, the core PCE price index; personal spending; University of Michigan consumer sentiment; and the Chicago PMI on the slate. 

Login or register to view the full economic calendar in the platform

Earnings to watch 

Ad titan WPP reports it interim results for the six months ended June 30th on Thursday. The advertising giant is a useful barometer of economic confidence. Big brands have slashed marketing budgets to cope with pandemic and WPP has warned of the hit it will take this year. But rival Publicis reported a 13-% drop in second quarter like-for-like sales, which was well ahead of the –20% anticipated. Shares in WPP are down over 40% this year – could Publicis offer a clue as whether the stock may find a new course? We are also interested in recruiter Hays – which reports finals on Thursday and is often a great indicator as to the overall health of the labour market globally. 

Salesforce.com (CRM)  is expected to deliver earnings and revenue growth when it reports numbers for the quarter ended July on Tuesday. EPS is seen at $0.7 on revenues of $4.9bn. 

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An individual approach to investing.

Whether you’re investing for the long-term, medium-term or even short-term, Marketsi puts you in control. You can take a traditional approach or be creative with our innovative Investment Strategy Builder tool, our industry-leading platform and personalised, VIP service will help you make the most of the global markets without the need for intermediaries.

La gestión de acciones del grupo Markets se ofrece en exclusiva a través de Safecap Investments Limited, regulada por la Comisión de Bolsa y Valores de Chipre (CySEC) con número de licencia 092/08. Le estamos redirigiendo al sitio web de Safecap.

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