The news that you’ll have woken up to is that Donald and Melania Trump have tested positive for coronavirus. The President’s doctor has said that it won’t interfere with his working schedule, but he sits well within at risk categories, so we can only hope that this is the case. Self isolation will take him away from the campaign trail, which had four scheduled events between now and Sunday and probably triple that number over the course of his required self-isolation, so this could well make a difference to his polling – though the ‘rally around the flag’ effect that we saw when Boris contracted the virus earlier in the year doesn’t necessarily mean this is a one way move. Polling numbers have swung slightly against him in the days after the first presidential debate – the latest poll of polls shows Biden at 49.7% and Tump trailing at 43.1% on a national basis.
Something else that won’t be doing Trump favours is economic news which is showing that the economic bounce back isn’t continuing as hoped: Yesterday Disney added their name to a growing list of big corporate names that have announced large scale redundancies over the last week and data shows that whilst initial jobless claims aren’t rising, they’re not falling away that quickly either. Adding to uncertainty over the number; California had to pause their claims process for two weeks to deal with a backlog of some 600,000 benefits claims. These won’t all be jobless claims, but they’re almost certainly going to have an impact on any number revisions that we get, or feed heavily into next month’s data.
Optimism over a fiscal stimulus boost faded yesterday, as Democrats passed their $2.2trn package in the House yesterday, but it has now moved to the Senate where it is not going to reach the majority that it needs – as it would require 13 Republicans to cross the aisle and without the assent of Mitch McConnell and ultimately the White House, there’s no way they’d get to that number. Nancy Pelosi is still negotiating with Steve Mnuchin, but commentators are saying that with Democrats having passed the bill through the House knowing that it will fail it will be a political statement by Republicans for there not to be any iteration of this deal passed into law and as such we’re actually a step back from where we were on Wednesday. *Insert quote about political ideals coming at the cost of a country*
It wasn’t all doom and gloom on the US markets though, as despite the risk off tone, the Nasdaq had another great day and started the quarter up by 1.5%. This is being attributed to a single investor coming in and buying large amounts of call options on tech giants. There’s speculation that it’s the same trader that was in the market in August and who’s outsized summer trades heled to drive the index higher by 11%. The bullish trades point to someone thinking these stocks still have further to go over the next six months. Bloomberg has the story
Sterling also saw some large price action around lunchtime yesterday too, with someone hitting the market in size and at a time when liquidity was light enough to send the value of a Pound up by more than a cent. The market has about reset to where it was, but it certainly took some time to settle down as the obvious question was asked; ‘do they know something we don’t?’
Closer to home: Priti Patel is being targeted by civil servants in the foreign office who are leaking ‘plans’ on how to discourage migrants from making the Channel crossing, according to Whitehall. Over the last few days, we’ve seen increasingly outlandish ideas on how to manage migrants (process asylum claims on Ascension Island or on decommissioned ferries, running fences across the channel, putting chains in boat propellors etc.) The government say that these aren’t proposals that are up for consideration and are instead being manufactured and leaked by the Foreign Office in a bid to discredit Ms Patel – which we do hope is the case, as some of the ideas are horrendous. The Times has the story.
Something we’re watching out for are possible new appointments to the BBC and Ofcom. Stories circulated earlier in the week that the candidates that have the PM’s backing are Charles Moore and Paul Dacre, respectively. The former being Boris Johnson’s old boss at the Telegraph and the latter being the editor-in-chief at the Daily Mail. Charles Moore is a staunch critic of the BBC’s funding model and Paul Dacre is no fan of tech giants being so dominant in the media space. If these appointments were to be realised, massive changes would undoubtedly be afoot. There’s obviously a process to go through and adverts to be placed, but there’s also nothing to stop the government getting their way with their preferred candidates. The Independent has the story.
The EU have finally got around to placing sanctions on Belarussian officials, but have stopped short of placing them on President Lukashenko! The news has drawn criticism from just about everywhere, for taking too long to action and for not targeting the real cause of the problem (Lukashenko) and even the UK managed to beat the EU to the punch and imposed travel bans and an asset freeze on him.
In a possible sign of progress, Michel Barnier won’t be giving his usual press conference when Brexit talks wrap up for the week, later today. Instead he’s going to have a one to one with Lord Frost, the head of the UK’s negotiating team. Whether this is reading too much into the tealeaves or not, we’ll wait and see. The EU confirmed their plans to pursue legal action against the UK over the Internal Market Bill that the government is pursuing. The confirmation yesterday was a bit of a non-event, as people were quick to point out that the legal process would take more months than we’d be a member of the EU for and post Brexit we’ll either have a deal or the European courts won’t take precedent over us.
The news of Trump’s positive test saw ow futures drop 500 points. They’ve bought back some of that loss, but we’re still around 300 points down and it’s not looking like a great start for European markets as we get going on the last day of the week. the market taking such a negative viw of this news could be over fears that Trump will double down on the “China virus” talk and negative trade sentiment. Here’s hoping for a Brexit breakthrough to get us back in the game.
Have a great weekend