US President Donald Trump was able to leave the hospital and returned to the White House. How the (for the time being short) illness of the president so close to the election date will affect the Americans and whether this will have an influence on their decision, is currently questionable. It seems certain that Trump has by no means changed his attitude towards the coronavirus.
On Wall Street investors reacted positively to the quick recovery and the return of the president. The Dow Jones Industrial rose by +1.68% to 28 148.64 points and the broad-based S&P 500 also made an impressive start to the week with a daily gain of +1.82% (3 408.60 points). In Asia, too, the stock markets benefited from the return of the US President and climbed to a two-week high in some cases. In Tokyo, the Nikkei Index, which comprises 225 stocks, was up around +0.5%.
The infection of the US President with the coronavirus also has possible consequences for the work of the US Congress. For example, a vote on a corona aid package could be further delayed because three Republican senators also tested positive for Covid-19 and therefore had to go into quarantine. Mitch McConnell, Republican majority leader in the Senate, has already announced a recess until October 19. Meanwhile, Nancy Pelosi, Democratic President of the House of Representatives, expressed confidence and said: “We are making progress“. Earlier, the Democrats had put forward a compromise proposal for around USD 2.2 trillion. The Republicans' offer currently stands at USD 1.6 trillion.
Despite the still uncertain pandemic situation in the US, companies in the service sector surveyed by the Institute for Supply Management (ISM) industry association were more optimistic in September. The ISM purchasing managers' index improved from 56.9 points in the previous month to 57.8 points. Analysts had expected the index to cloud over to 56.2 points on average. The improvement in the employment component is also a particularly positive feature.
The monthly survey of around 1000 investors conducted by the German financial market analysis company Sentix showed a slightly more cautious assessment of the economic outlook for the eurozone in October. After the sentiment barometer had risen continuously over the past five months, reflecting the recovery from the peak of the corona pandemic, the indicator now dropped back by 0.3 points month-on-month to -8.3 points. Investors were most optimistic about the development in Asia. The corresponding indicator reached its highest level since the beginning of the year. According to Sentix, the investors surveyed reflected the increasingly better economic picture in China.
The final figures of the monthly purchasing manager surveys conducted by the London market research company IHS Markit confirmed that the recovery of the overall economy in the euro zone has stalled somewhat, following the brilliant recovery from the corona shock. The combined purchasing managers' index (PMI Composite) fell from 51.9 to 50.4 points in September. While the situation in the industrial sector appears to be relatively stable, the service sector is suffering from the renewed increase in the number of corona cases. Accordingly, the Purchasing Managers' Index for the service sector dropped from 50.5 to 48.0 points in September, which means that the sector has slipped back into contraction. The European services sector was hit particularly hard by the corona measures and the recovery has been much weaker than in industry in recent months.
|08:00||GE||Factory Orders (August, y/y)||-7.3%|
|14:30||US||Trade Balance (August)||-USD 63.56bn|
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Source: LGT Bank (Switzerland) Ltd.
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