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LGT Navigator: Trump and Biden fight an unpresidential duel

September 30, 2020

The first television duel in the current presidential election campaign in Cleveland turned into a farce. At least if one had hoped for a presidential and serious debate with content statements on the most burning political and social issues. An initial reaction on the Asian stock markets showed no clear trend and showed that even investors could not identify a clear favorite after the TV duel. New economic data moved into the background. Nevertheless, the mood of American consumers has brightened considerably again.

Trump vs Biden

In the first TV debate, US President Donald Trump and his Democratic challenger Joe Biden exchanged blows for the first time. It is hard to see a small winner in this heated and sometimes chaotic debate. Trump failed to score a knockout and Biden could not score a point. It is questionable whether undecided voters were able to form an opinion, since the discussion did not bring anything new in terms of content. The financial markets are likely to be concerned above all about Trump's renewed refusal to recognize the outcome of the US presidential election regardless of the outcome.

Meanwhile, the difficult negotiations on a US economic stimulus package continue in Washington: The Democratic speaker of the House of Representatives, Nancy Pelosi, and Secretary of the Treasury, Steven Mnuchin, have agreed to continue the talks today.

The American stock indices lost momentum again after the three-day recovery rally and ended the day's trading on Tuesday with losses. The Dow Jones Industrial fell by almost -0.5% to 27 452.66 points. The S&P 500 and the Nasdaq 100 also dropped by -0.48% and -0.37% respectively. Asian stock markets reacted inconsistently this morning to the first US presidential debate. The Nikkei index, which comprises 225 stocks, lost around -1.5%, while the Hong Kong Hang Seng index rose by around +0.7%.

US consumers are more optimistic

The mood among American consumers developed positively in September despite the still difficult pandemic situation. The monthly consumer confidence barometer published by the New York economic research bureau The Conference Board recovered much more strongly than expected from the corona-induced slump in April, rising from 86.3 to 101.8 points, the highest level since March. Economists had expected an average improvement to only 90.0 points. The mood of private households could well play a decisive role in the upcoming elections.

Economic sentiment in the euro zone has continued to recover

The latest survey results from the European Commission point to a sustained but tenacious recovery from the corona shock. The composite index for the assessment of economic development improved in September from 87.5 points in the previous month to 91.1 points, thus exceeding analysts' expectations of 89.0 points. The indicator is broadly based and takes account of the mood in industry, the construction sector, the service sector and developments in the retail sector and private households.

Medium-term prospects for the euro economy remain weak

In a joint forecast, the three research institutes Ifo, Istat and KOF assume that economic growth in the euro zone will level off again in the final quarter of 2020 after the impressive recovery in the third quarter. In the “Eurozone Economic Outlook“ published yesterday, the institutes anticipate comparatively moderate growth of +2.2% in the last three months of this year compared to the previous quarter. This is after the euro economy is forecast to grow by +8.2% in the third quarter (after a corona-induced slump of almost -12% in Q2). For the first quarter of 2021, GDP growth of +1.5% is still predicted. The forecast for 2020 as a whole predicts a decline in economic output of -8%. However, the three institutes from Munich, Rome and Zurich warned that reliable forecasts are difficult in the current environment, as nobody knows how the corona pandemic will develop and when a vaccine will be available.


Economic Indicators September 30

MEZ Country Indicator Last
08:45 FR Consumer Prices (September, y/y) +0.2%
09:00 SZ KOF Economic Indicator (September) 110.2
09:30 EZ ECB Lagarde speech
10:00 IT Consumer Prices (September, y/y) -0.5%
10:00 EZ Consumer Prices (September, y/y) -0.2%
10:00 EZ Core Consumer Prices (September, y/y) +0.4%
10:30 UK GDP Q2 (q/q) -20.4%
14:15 US ADP Private Employment (September) +428,000
14:30 US GDP Q2 (q/q) -31.7%
16:00 US Pending Home Sales (August, m/m) +5.9%

Earnings Calendar October 6

Country Corporate Period
SZ Aryzta Y


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US employment growth remains dynamic at the beginning of the year