- S&P 500 Futures struggle in early November after two consecutive months of downside.
- Fears of wider coronavirus wave 2.0, no immediate US stimulus threaten market sentiment ahead of American presidential election.
- Upbeat activity numbers from China, Japan join Brexit-positive headlines to offer intermediate relief.
S&P 500 Futures print 0.20% intraday gains after bouncing off 3,225, to currently around 3,265, during early Monday. The risk barometer recently respected the market-positive updates concerning the second-tier catalysts. Though, the worsening of the coronavirus (COVID-19) and cautious mood before Tuesday’s US Presidential Election keeps the bulls chained.
Talking about the data, China’s October month NBS Manufacturing PMI joins second-tier activity numbers from Japan and South Korea to portray global economic recovery from the pandemic. Also on the positive side were the news that the European Union (EU) and the UK are getting closer to solver the Brexit riddle as agreement on fisheries is nearby.
Even so, national lockdown in the UK and fears that the British death toll due to the virus can be double than the first round of infection probes the risks. Further, the Democratic victory in the US polling is getting more attention but President Donald Trump is also trying hard to offer any last-minute surprises and defeat the odds of a blue wave in American Congress.
Elsewhere, traders have lost the hope of any stimulus from the US while the Sino-American tussle fails to get any major attention. Also couldn’t entertain markets was the recently published upbeat earnings reports from the American technology giants. The reason could be an anticipated slowdown in demand, mainly due to the COVID-19 wave 2.0 and a lack of US government support to the companies.
Against this backdrop, US 10-year Treasury yields await fresh clues around 0.86% whereas Japan’s Nikkei 225 rise 1.33% as we write.
Although Tuesday becomes the key day for global markets, monthly activity numbers from the US and China can offer immediate direction. It should, however, be noted that the bearish momentum is less likely to fade during this week.