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Weekly financial market overview 19.10.-25.10.

News - October 26, 2020



Konstantins Goluzins, CFA

Head of Asset Management
Phone.: (+371) 6700 0456
E-mail: trust@bib.eu


Main events of the previous week

On October 22, US President Donald Trump and Democratic presidential candidate Joseph Biden held their final debates ahead of the November 3 presidential election. The debate went better than the last time, as the muted microphones prevented them from interrupting each other during the first two minutes of answering each question. During the debate, Biden compared Trump's attempts to mend relations with North Korean leader Kim Jong-un to trying to appease Hitler. In turn, commenting on the statements of the head of National Intelligence about possible interference in the elections of Russia and Iran, Trump stressed that these countries wish him to lose (elections). Biden, speaking, threatened any country that intervenes in the elections by saying that it will have to "pay the price." Much of the debate has also focused on racism in the United States. Biden acknowledged the existence of "structural racism" in the country and accused Trump of "adding fuel to the racist fire." Trump admitted that at first he was negative about the Black Lives Matter movement, as he have heard that they called police pigs. "There is no less racist in this room than me," Trump said. Once again, Trump attacked Biden, accusing his son Hunter of unscrupulous financial transactions in Ukraine, the fruits of which his father allegedly took advantage of. Biden, on the other hand, said that in his life he did not take a single penny from foreign sources. According to him, he published his tax returns for all 22 years, while Trump did not publish a single one.

Economic data

US. The number of initial jobless claims for the week was registered in the amount of 787 thousand, which is 55 thousand less than the week before and 73 thousand less than predicted by analysts.

According to the primary assessment of the PMI business activity index in October, the indicator increased by 1.2 points compared to September and amounted to 55.5. Of the indicators that make up the index, business activity in the service sector was 1.4 points higher, and the state of the manufacturing sector was 0.1 points higher.

Eurozone. According to the primary assessment of the PMI business activity index in October, the indicator fell by 1 point in comparison with September and amounted to 49.4. Of the indicators that make up the index, business activity in the service sector was 1.8 points lower, while the state of the manufacturing sector increased by 0.7 points.

China. According to the initial numbers, the GDP in the third quarter grew by 2.7% compared to the second quarter of 2020, while on an annualized basis (relative to the third quarter of 2019), GDP growth was 4.9%.

The volume of retail sales in September increased by 3.3% compared to September 2019, which was the highest figure this year.

Industrial production in September also reached its maximum growth in 2020, amounting to 6.9% compared to September 2019.

In turn, the unemployment rate in September fell by 0.2 percentage points and amounted to 5.4%.

Key events this week

  • On Monday, the US is to publish data on new home sales in September.
  • September durable goods sales in the US will be announced on Tuesday.
  • On Wednesday, the US will report on changes in oil reserves for the week.
  • On Thursday, the US will publish the initial estimate of GDP growth in the third quarter, as well as the number of initial jobless claims for the week, in turn, the ECB and the Bank of Japan will publish their decision on the key rate.
  • And on Friday, the initial estimate of GDP growth in the third quarter will be announced in the Eurozone, as well as data on unemployment for September and inflation in October, while the US will publish data on personal spending and income of their citizens.

The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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