US stimulus optimism and covid concerns
Fiona Cincotta October 21, 2020 2:47 PM
After a modestly firm handover from the US, Asian stocks moved higher and European bourses are seeing a mildly positive start amid renewed hopes for additional US fiscal stimulus.
After a modestly firm handover from the US, Asian stocks moved higher and European bourses are seeing a mildly positive start amid renewed hopes for additional US fiscal stimulus. However, any gains remain capped by concerns over rising covid cases & tighter lockdown restrictions.
On Wall Street Google parent Alphabet ended the session over 1% higher despite an antitrust law suit against it by the US Department of Justice. Google is being accused of being the “gate keeper” to the internet, paying billions to hold a monopoly. Google meanwhile insists that people use Google because they want to The lawsuit comes following similar filings in Europe suggesting that the mood towards big Tech is turning, not just outside of the US but now on home soil as well. However, the fact that the share price finished higher reflects a lack of concern among investors. Any such case would be a very long drawn out process, not something which is really on investors radar just ahead of earnings.
Netflix reported overnight. After 26 million subscribers were gained over the past two quarters, the lockdown quarters, just 2.2 million new subscribers were added in Q3, weaker than the 2.5 million forecasts. Netflix had warned that the elevated level of subscriber growth was unsustainable. Even so the drop off was a sharp pull back to reality. Q4 subscriber outlook was also slightly weaker than expected. The bottom line is as economies reopen subscriber growth can be expected to return to pre-covid levels.
Sticking with earnings Tesla is due to report Q3 earnings after the bell. After the stock has surged 425% year to date, to say expectations are high would be an understatement. We know that 139,000 vehicles were delivered in Q3, the big question is whether full year guidance of 500,000 remains intact? Profitability has always been a big theme for Tesla, mean expectations are for EPS of $0.56 a 51% jump from a year earlier.
UK inflation misses GBP remains resilient
UK inflation rebounded from August’s disinflation; however, the rebound was less punchy than expected. Prices rose +0.4% month on month, less than the 0.5% increase forecast. Borrowing as also significantly higher than forecast. The Pound, however, is unfazed, advancing versus both the Euro and the weaker USD.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.