Weekly Market Update

Author : Rachel Poole
Date : October 17, 2020

Global Market News

Global equities little changed on the week
Global equities were little changed on the week after we saw several days of losses following a positive week last week. The US 10-year Treasury note eased to 0.74% after its rise to 0.79% last week and the price of a barrel of West Texas Intermediate crude oil dropped slightly to $40.75. Volatility inched up to 27 this week as we near closer to the presidential election.

US Federal deficit soars to $3.1 trillion
Official figures released on Friday show that the US federal deficit surged to $3.1 trillion in 2020 as the Covid-19 pandemic fueled unprecedented government spending. The deficit is $2 trillion more than the White House’s budget forecast in February.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 39,100,000

Global Covid-19 deaths: 1,100,000
US Confirmed Covid-19 cases: 8,040,000

US Covid-19 deaths: 218,000
*As of Friday evening

Europe’s Covid-19 case count surges
This week Europe reported that the seven-day average of new Covid-19 cases reported has topped 100,000 whereas the US’ seven-day average case count has risen to only 53,000. Over the last ten days, one million new cases have been reported across Europe. The spikes in cases seen across Europe has lead many leaders to tighten restrictions. For example, Paris and eight other metropolitan areas in France have imposed nightly curfews.

Geopolitics Spotlight

A no-deal Brexit is on the horizon
British Prime Minister Boris Johnson is expected to make a final call on whether to accept a post-Brexit trade deal with the European Union or decide on a no-deal scenario. On Thursday, the EU gave the UK an ultimatum and on Friday, Johnson told the United Kingdom that it was time to prepare for a no-deal Brexit unless the EU was willing to fundamentally change their position.

Thailand cracks down on protests
Despite the government’s efforts to quell protests, thousands of protesters gathered in the country’s capital to show their anger over an emergency decree that seeks to crack down on nationwide demonstrations against Thailand’s monarchy and military. In response to the protests, government authorities have banned gatherings of five or more people and have prohibited online speech that could “affect national security”.

US Social & Political Developments

Trump and Biden hold separate town halls
Thursday night, President Donald Trump and Democratic candidate Joe Biden held separate town-hall style events in place of a second presidential debate. The meetings were strikingly different in tone as President Trump was often engaged in tense exchanges with the host while Biden had a much more calm back and forth. The third presidential debate is scheduled for next Thursday, October 22nd.

US stimulus not expected before election
As talks have continued between US Secretary of the Treasury Steven Mnuchin and Speaker of the House of Representatives Nancy Pelosi, it seems increasingly unlikely that another relief package will come before the presidential election. A gap of $400 billion separates the two sides as Pelosi seeks $2.2 trillion and the White House only offers $1.8 trillion. Markets are anticipating a larger stimulus package if the Democrats sweep the November election.

Corporate/Sector News

Apple launches new 5G iPhone

This week Apple launched four versions of the iPhone 12 which all have superior 5G connectivity. The announcement of the iPhone 12 has triggered a battle in the promotion game between carriers who are all trying to capitalize on Apple’s latest release.

Virgin Galactic launch coming up

Virgin Galactic is on track to launch its first suborbital spaceflight in the new few weeks. This flight will be the first of two which will complete the testing of the SpaceShipTwo spacecraft system. Given that both flights succeed, the company will fly its founder, Sir Richard Branson, into space in the first quarter of 2021.

Foxconn enters electric vehicle market
Foxconn, a company well-known for making Apple’s iPhones is entering the world of electric vehicles. It has recently introduced the “MIH Open Platform” which is a set of tools that would allow Foxconn to design large parts of electric cars such as battery capacities, suspension types, etc.

Image of the Week

Video of the Week

This is Earth in the next 100 years if we don’t act on climate change
Source: World Economic Forum