Daily Markets: Markets Rattled on News That President Trump Tested Positive for Coronavirus

Today’s Big Picture

Most of Asia’s equity markets were closed today and after yesterday’s unexpected closure, Japanese equities resumed trading, finishing the day down 0.7%. In a day with modest economic and earnings news, the focus is that with 34 days left in the 2020 U.S. presidential election, President Trump tested positive for the coronavirus. In response, European equities have retreated in trading and U.S. futures are in the red as investors contend with this latest round of uncertainty surrounding the election, including Trump’s campaigning and the next scheduled presidential debate set for October 15, as well as the current round of pandemic-related stimulus talks.

While investors look for further details from the White House regarding Trump’s condition and its implications, U.S. equity futures will likely be shaped to some degree by today’s September Employment Report set for 8:30 AM ET this morning. During the day, market watchers will continue to watch for any signs of progress toward the next round of pandemic fiscal stimulus as Pelosi-Mnuchin negotiations look to continue. We’d note that with Congress expected to leave Washington for the remaining weeks of the 2020 campaigns, the fiscal stimulus deal clock is ticking.

That potential deal won’t be the only one investors keep tabs on over the weekend. The final round of scheduled Brexit talks between the UK and European Union is set to be held today, however noting the limited progress thus far and the EU launching legal action over UK prime minister Boris Johnson's plan to potentially override the Withdrawal Agreement, Johnson said he will hold talks on Saturday with European Commission President Ursula von der Leyen in an attempt to unlock a deal.

All of the above will make for an interesting weekend, and we’ll be here to help you makes sense of it all come Monday morning.

Data Download

International Economy

September Consumer Confidence in Japan rose to 32.7 vs. 29.3 in August and the expected 32.0 reading for the month.

Year over year, the September Flash Inflation Rate fell 0.3% in the Eurozone, more than the expected drop of 0.2% drop. On a month over month basis, the September Flash Inflation Rate ticked 0.1% higher vs. the -0.4% reading for August. The September Flash Core Inflation Rate in the Eurozone rose 0.2% YoY, below the expected 0.5% and down from the 0.4% reading in August. We suspect the European Central Bank will be digging into the data rather closely as it debates whether to add stimulus to support the Eurozone’s recovery from the coronavirus recession.

The European Central Bank has applied to trademark the term "digital euro," signaling it is laying the groundwork for a central bank digital currency (CBDC). During its “investigation phase,” the ECB will experiment with digital currency and collect feedback as it looks to decide by mid-2021 whether launch it.

Domestic Economy

Before today’s market open, we’ll get the September Employment Report, which is expected to see 850K jobs added during the month vs. the 1371K in August. Later in the day, the September ISM New York Current Business Conditions index will be reported as will August Factory Orders and Final September reading for the University of Michigan Consumer Sentiment Survey.

Markets

Yesterday, Nasdaq posted solid gains, up 1.4%, led by Amazon (AMZN) and the rest of the Fab 5 that all finished higher on the day. By comparison, the S&P notched a 0.5% gain while the Dow eked out a modest increase and the Dow rose 0.1% while the Russell 2000 rose 1.56%, making it the best performing index as we started off the month of October. Compared to the declines recorded in September, we suspect investors welcomed the positive start to October even though the S&P 500 finished off its highs for the day. The index’s gains evaporated following reports that distance remains between Treasury Secretary Mnuchin and House Speaker Pelosi on the topic of fiscal stimulus.

Stocks to Watch

Twilio (TWLO) shares traded higher in aftermarket trading last night following an SEC filing that shared the company now expects total revenue for its just wrapped September quarter to be ahead of previously issued guidance for $401-$406 million. Consensus expectations for quarter are revenues of $404.7 million and EPS of -$0.05.

Nu Skin Enterprises (NUS) now sees its 3Q 2020 revenue in the range of $700-$703 million vs. its prior guidance of $605-$635 million. Roughly 90% of the quarter’s sales were in the form of digital transactions.

Activision Blizzard (ATVI) is delaying the release of its “World of Warcraft: Shadowlands” installments to continue beta testing the game. The Blizzard division had expected to release the update to the multiplayer online role-playing game at the end of October but is opting to release it “later this year.”

Honda's (HMC) total US sales rose 11.5% YOY to 127,058 units in September — cars up 1%, trucks up 19.9% - but even so the company’s sales for 3Q 20 Q3 sales declined 9.5% YoY to 388,433 units. The company also announced it will withdraw from Formula One (FWONA) at the end of the 2021 season.

Volkswagen AG (VWAGY) reported its 3Q 2020 sales fell 7.6% YoY even though its SUV sales for the quarter rose 4.7%.

Chinese Electric Vehicle (EV) company Nio Inc. (NIO) delivered 12,206 vehicles in the September quarter, up 154.3% YoY, beating its guidance of 11,000-11,500 vehicles for the quarter. For the month of September the company delivered 4,708 vehicles.

Intel (INTC) announced it won a second-phase contract in a project aimed at helping the U.S. military make more advanced semiconductors within the United States.

Nokia (NOK) announced it signed 17 new 5G commercial deals in during the September quarter, which brings its total of 5G deals with individual customers to more than 100 and its total number of commercial 5G engagements, including paid trials, to 160 exiting the quarter.

ABB (ABB) announced it has acquired Netherlands based Codian Robotics B.V., a provider of delta robots, which are used primarily for high-precision pick and place applications.

Telenav (TNAV) confirmed it received a proposal from V99, a Delaware corporation led by HP Jin, Co-Founder, President and Chief Executive Officer of Telenav, to acquire all outstanding TNAV shares for $4.32 per share in cash in a "go private" transaction structured as a reverse triangular merger.

BorgWarner (BWA) announced it has complete the acquisition of UK based vehicle propulsion systems company Delphi Technologies (DLPH) and will hold a conference call to discuss the deal on October 8th at 9:30 AM ET.

Walmart (WMT) agreed to sell its British supermarket chain Asda to private equity group TDR Capital and the founders of petrol station operator EG Group for 6.8 billion pounds ($8.8 billion).

Credit-rating agency Moody's Investors Service, a division of Moody’s Corp. (MCO), downgraded New York City's $38.7 billion debt to Aa2 from Aa1 citing "substantial financial challenges" faced by the city in the wake of the COVID-19 pandemic.

After today’s market close, there are no companies slated to report their quarterly results. Investors interested in using the weekend to get a jump on the corporate earnings reports to be had next week should visit Nasdaq’s earnings calendar page.

On the Horizon

• • October 5: Before US equity markets open, SailPoint Technologies (SAIL) will replace Sally Beauty (SBH) in the S&P MidCap 400, and Sally Beauty Holdings will replace Oasis Petroleum (OAS) in the S&P SmallCap 600. Markit Services PMI and ISM Services.
  • October 6: Trade Balance and JOLTS Job Openings
  • October 7: MBA Mortgage Applications, Consumer Credit, FOMC Meeting Minutes
  • October 8: Initial Jobless Claims, Bloomberg Comfort
  • October 9: Wholesale Inventories, Wholesale Trade Sales
  • October 13: NFIB Small Business, CPI, Real Hourly Earnings, Budget Statement
  • October 14: MBA Mortgage Applications, PPI
  • October 15: Initial Jobless Claims, Bloomberg Comfort, Empire Manufacturing, Import/Export Prices, Philly Fed Outlook
  • October 16: Options Expiration Day, Retail Sales, Industrial Production, Business Inventories, University of Michigan Consumer Sentiment, TIC Flows
  • October 19: Home Builder Sentiment
  • October 20: Building Permits and Housing Starts
  • October 21: MBA Mortgage Applications, Fed Beige Book
  • October 22: Initial Jobless Claims, Bloomberg Comfort, Leading Index, Existing Home Sales, Kansas City Manufacturing
  • October 23: Preliminary Markit PMIs
  • October 26: Chicago Fed Activity, New Homes Sales, Dallas Fed Manufacturing Activity
  • October 27: Durable/Capital Goods, FHFA Home Prices, Case-Shiller Home Prices, Consumer Confidence, Richmond Fed Manufacturing
  • October 28: MBA Mortgage Applications, Wholesale Inventories, Retail Inventories
  • October 29: Initial Jobless Claims, Bloomberg Comfort, GDP, Personal Consumption, Pending Home Sales
  • October 30: Personal Income, Personal Spending, PCE Deflator, Employment Cost, MNI Chicago PMI, University of Michigan
  • October 31: Boo!

Thought for the Day

“Don’t let yesterday use up too much of today.” ~ Will Rogers

Disclosures

• Intel (INTC), Nokia (NOK) are constituents in the Tematica BITA Digital Infrastructure and Connectivity Index.
• Walmart (WMT) is a constituent in Tematica Research's Thematic Dividend All-Stars Index.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Coronavirus Economy Stocks US Markets Politics