Investing.com | Nov 22, 2020 20:06
By Noreen Burke
Investing.com -- In the coming holiday-shortened week stock markets are likely to remain focused on the twin themes of brightening prospects for a coronavirus vaccine against the rapid spread of the pandemic across the United States. Economic data, including reports on personal spending and consumer confidence will show whether the resurgent virus is prompting concerns over the economic outlook ahead of Black Friday, the kick-off event for the holiday shopping season. PMI data from the euro zone will likely point to a significant decrease in business activity as the new lockdown measures will be fully reflected in the figures. Meanwhile, Britain and the European Union appear to be on the verge of striking a post-Brexit trade deal. Here is what you need to know to start your week.
Stock market investors are weighing the risks from the fast spreading virus and a potentially robust economic recovery once a vaccine is widely deployed.
The benchmark S&P 500 index has recently soared to record highs on evidence of high efficacy rates in two experimental vaccines - from Moderna (NASDAQ:MRNA) and jointly from Pfizer (NYSE:PFE) and BioNTech. Both vaccines could be ready for U.S. authorization and distribution within weeks.
But the pandemic remains an immediate threat with the U.S. recording its 12th million COVID-19 case on Saturday, capping a series of days with record-breaking infections. Meanwhile, millions of Americans are expected to travel for the upcoming Thanksgiving holiday, ignoring warnings from health officials about furthering the spread of the virus.
The U.S. is due to release data on consumer confidence on Tuesday. Wednesday will be a packed day on the economic calendar with data on personal spending expected to point to a slowdown in October, while figures on third quarter GDP are expected to be unrevised.
Other reports include figures on initial jobless claims, which will be closely watched after an unexpected increase last week signaled that the recovery in the labor market may have stalled. There will also be data on the trade balance, durable goods orders, new home sales and consumer sentiment ahead of Thursday’s Thanksgiving holiday.
Later Wednesday, the Federal Reserve will publish the minutes of its last meeting with investors on the lookout for any discussion around potential tweaks to its asset purchase program. Meanwhile, appearances by regional Fed presidents Thomas Barkin and Charles Evans on Monday and James Bullard on Tuesday will also be in focus.
In a normal year, U.S. shoppers would be gearing up for "Black Friday," the traditional start of the holiday shopping season. But not this year. While growing coronavirus cases make the familiar scenes of consumers crowding into stores to snap up bargains unlikely, online orders are expected to surge.
Oxford Economics expects holiday sales to rise only 0.6% from a year ago due to a confluence of coronavirus, suffering incomes and a weak job market. Macy's (NYSE:M) expects a tough time with a possible 20% sales decline over the fall.
But it’s not all doom and gloom: Walmart (NYSE:WMT) forecasts a promising holiday season and upcoming earnings results from Nordstrom (NYSE:JWN), Gap (NYSE:GPS) and Dollar Tree (NASDAQ:DLTR) will offer more insights.
Preliminary readings of November business activity from the euro zone on Monday are expected to be dismal amid the resurgent coronavirus and the second round of lockdown measures put in place to contain it.
While last month showed a small tick down for most indicators, these readings are expected to show a significant decrease. This will be largely due to the service sector, which is where all restrictive measures have been introduced so far, but there is likely to also be some impact in the manufacturing sector.
Britain appears to be on the verge of reaching a post-Brexit trade deal with the European Union that would regulate their relationship after the transition period ends on Jan. 1, 2021 -- just six weeks away.
Brexit deadlines have come and gone several times in the past, but negotiators are making a final push and the consensus is London and Brussels will come to some sort of agreement - possibly a bare-bones deal with details to be decided down the line.
Recent gains in sterling and UK stocks imply assets have been buoyed up by hopes for a vaccine and a Brexit deal, but they could be in for a bumpy ride.
--Reuters contributed to this report
Written By: Investing.com
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