Sharp Brexit talks drag on (new deadline: Sunday) and deadlocked US talks over a coronavirus aid package are not good premises for stock market bulls. Futures contracts on European and American stocks are in the redfollowing setbacks in Asia.
Part of this is also due to the heavy blow that American technology suffered on Wednesday, when Facebook has been hit with lawsuits which could force him to sell valuable WhatsApp and Instagram assets. Electric vehicle maker Tesla, which is set to join the S&P 500 next week, also came under pressure after JPMorgan warned the company was “significantly” overvalued.
On the positive side, the European Central Bank should announce a reinforced and extended policy pandemic recovery program, although it is already cooked in the markets. And two days EU summit kicks off and will likely unblock a locked-in spending program of 1.8 trillion euros.
Meanwhile, the IPO frenzy continues. DoorDash food delivery company grew by over 80% in its early days, valuing it at $71.3 billion, bodes well for home rental startup Airbnb, which makes its own a long-awaited market entry Thursday. The year was generally a bonanza for IPOs, as the following chart shows:
Finally, despite the slump in growth and the grim COVID-19 assessmentinflation expectations represented by US equilibrium rates have almost reached the approximate threshold of 2% set by the Fed.
Key developments that could further guide markets on Thursday:
-ECB meeting
-EU starts two-day summit
-Meetings of central banks in Serbia, Peru, Ukraine
–UK GDP grew by 0.4% in October (vs 1.1% in September)
-US Core CPI Data/Weekly Unemployment Claims
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