Stock markets are expected to end the day in the red as foreclosure concerns replaced recent optimism generated on the backs of vaccination hopes.
Concerns about the health crisis and lockdowns are the main topic of the session. Traders haven’t forgotten the promising news from Monderna and Pfizer-BioNTech on vaccines, but concerns about damage to the economy are at the center of attention today. In London, it is the usual suspects who suffer the most due to health problems, as airlines, transport and hospitality are under pressure. Oil, mining and banking stocks are also suffering. Overall, the supermarket industry is up to the task.
Parcel activity at Royal Mail Group continues to deliver goods as the first half update showed the division to have a 33.2% increase in turnover. The pandemic has caused a surge in online shopping, which has really helped the parcel delivery unit. For the third quarter, the subsidiary should experience strong demand. Letter delivery, without an election, fell by 28%. In the first half of the year, total revenue grew almost 10%, but pre-tax profit fell 90% – Covid-19 costs eroded the bottom line. Royal Mail expects total turnover for the full year to increase to between £ 380million and £ 580million over the year. Additionally, the company hopes to restore its dividend next year. The optimistic outlook has pushed the title to its highest level in nearly two years.
It has been reported that the short interest in Metro Bank stocks rose 47.1% between mid-October and the end of the month. In early November, the stock fell to a new all-time low, but over the past two weeks it has jumped more than 40% – it’s possible the stock’s rebound was fueled by short push.
Cineworld shares are in the red on the back of a report that the film group is considering entering into a voluntary company agreement (CVA). These types of agreements are usually made to avoid going bankrupt. There is speculation that UK cinemas at Cineworld will remain permanently closed. CVAs usually require a big restructuring, so if the group avoids bankruptcy it would likely require a major overhaul of the operation.
Concerns about tighter restrictions dampened sentiment a bit, with the S&P 500 down more than 0.2%. The Philly Fed’s business index for November was 26.3, which was higher than the 22 economists were anticipating. The October update was 32.3 – the best in eight months. The initial reading of jobless claims rose from 711,000 to 742,000, but the metric for count claims slipped to 6.37 million from 6.8 million. It should be remembered that the initial update of unemployment claims is more up to date than the continuous reading of claims. Judging by the reports, this would suggest that the US economic recovery is fading.
Nvidia, like other chipmakers, has seen an increase in demand as video games, artificial intelligence and electronics require them for their processing power. The third quarter numbers were released last night and they were impressive. Revenue jumped 57% to $ 47.73 billion, a record high. EPS was $ 2.91, and that easily exceeded the consensus estimate of $ 2.57. Compute and Networking is the largest division and it recorded a 146% increase in sales. Gaming and graphics revenues increased by 37% and 25% respectively.
Macy’s, the department store, suffered greatly from the lockdown. In the third quarter, comparable store sales were down 20.2%, but keep in mind that analysts were forecasting a 23.3% drop. Digital sales rose 27%, but that wasn’t enough to make up for the drop in in-store sales. Total revenues fell 22% to $ 3.99 billion. The loss per share was 19 cents, which was better than expected as the consensus estimate was for a loss per share of 79 cents.
Tesla Motor Inc Shares set a new record – after the stock split – as the electric vehicle market continues to advance.
the US dollar the index is up after falling for five consecutive sessions. In recent months, the greenback has attracted safe haven flows, and it is at stake today. Uncertainty hangs over the markets as health issues return to the mix, and dealers are looking for assets that are perceived to be lower risk. GBP / USD and EUR / USD were pushed into the red due to the dollar’s upward movement.
AUD / USD is lower because the overall risk of displacement has hurt the currency pair. The Australian dollar is considered to be a risk currency, whereas recently the dollar has been a risk free exchange. Metal prices are under pressure and this adds to the negative movement of the Australian dollar. Australia’s unemployment rate fell from 6.9% to 7%.
Gold was hit by the rise in the United States. The metal is traded in US dollars, so when the dollar gets more expensive, so does the asset. Gold has moved lower this week and if the bearish move continues it may retest late September lows – in the $ 1,848 region.
WTI and Brent raw are down on the session due to the general bearish mood in the markets. Dealers are concerned that lockouts will reduce energy demand, which is why the commodity is offside. Today’s negative move needs to be seen in a larger context as oil hit a one-week high yesterday on the last hope of vaccines.
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