After sharp bounce, market may take a ‘breather’ on lingering election uncertainty, virus outbreak

first_imgThere are a few economic reports in the week ahead, including consumer price index inflation data Thursday and the producer price index Friday. The earnings season is beginning to slow down, but there are still dozens of reports, including from McDonald’s on Monday and Walt Disney, Applied Materials and Cisco on Thursday.“I think next week is just setting up to be a breather. There’s still a lot to figure out here,” said Grohowski. “The equity market’s reaction has been I think understandable and probably better than many might have expected.”Grohowski said there may be uncertainty for awhile. “What I’m thinking about is the Senate races. Part of the market reaction has been relying on this divided government.” After the votes are all in or recounted, “a sweep is unlikely but possible.”“I think the longer this stays uncertain and messy, the more the post-election bounce comes into question,” he said.Different than 2000It would not be unusual for the stock market to sell off before rallying into year end, according to Sam Stovall, chief investment strategist at CFRA. Stovall does not expect the type of turbulence there was in 2000, when former Vice President Al Gore lost to George W. Bush in a tight race that ultimately went to the Supreme Court.“In 2000, they were not expecting hanging chads. But they do expect a contested election this time. I think in many ways the market anticipated this,” said Stovall.But the market, after its election week surge, could pull back. “Historically, the market goes down in the month of November, after a Democratic victory,” said Stovall. Since World War II, Democrats won the White House nine times, and the market fell an average of 0.5% in November in those years, compared to the average gain for all Novembers of 1.4%, he said.After those Democratic victories, stocks then rose 1.9% in December on average, more than the normal 1.5% gain for all Decembers.Strategists said they currently do not expect the kind of lockdowns that states ordered when the pandemic started to spread in March. But there could still be some impact that could be negative for stocks.Grohowski said he sees some signs of optimism for the market. Strong data, like third quarter GDP, October’s drop in unemployment to 6.9%, and the better-than-expected earnings are all positives for the market. Another is that investors are so skeptical.“What does still exist is a great deal of dry powder. There’s $4.3 trillion in money markets alone,” he said. “I can tell you, being in touch with investors of all shapes and sizes this week, there’s still a lot of skepticism. From a contrarian view, high cash and a lot of skepticism is a contrarian indicator.”Week ahead calendarMonday Earnings: McDonald’s, SoftBank, Beyond Meat, Simon Property Group, Ambac Financial, Tilray, ZoomInfo, Occidental Petroleum, Myriad Genetics, Taubman Centers, International Flavors and Fragrances, Norwegian Cruise, Canopy Growth, Aurora Cannabis, Party City 1:30 p.m. Cleveland Fed President Loretta Mester2:00 p.m. Senior loan officer survey Tuesday Earnings: Lyft, Advance Auto Parts, Adidas, D.R. Horton, Rockwell Automation, CyberArk Software, Hain Celestial, Rackspace, Ashland, Rocket Cos 6:00 a.m. NFIB small business survey10:00 a.m. JOLTS10:00 a.m. Boston Fed President Eric Rosengren WednesdayVeterans DayBond market closed, stocks market open regular trading hours Earnings: Air Products, DouYu, Lemonade, Reynolds Consumer, Vroom, Fossil Thursday Earnings: Walt Disney, Palantir Technologies, Applied Materials, Beazer Homes, Cisco Systems, Siemens, Burberry, Brookfield Asset Management, Unity Software8:30 a.m. Jobless claims8:30 a.m. CPI1:00 p.m. Chicago Fed President Charles Evans2:00 p.m. Federal budget2:00 p.m. New York Fed President John Williams Friday Earnings: Manchester United, Draftkings, Vipshop 7:00 a.m. New York Fed’s Williams8:30 a.m. St. Louis Fed President James Bullard8:30 a.m. PPI10:00 a.m. Consumer sentiment – Advertisement – The S&P 500 was up more than 7% in the past week, and the Nasdaq rose nearly 9%. Technology, communications services, health care and discretionary stocks led the rally, after it appeared Democrat Joe Biden could be the next president but with a split Congress.The election was still unresolved heading into the weekend, but even if Biden is declared winner, close votes and lawsuits are likely to result in recounts. The Senate appeared to be in Republican hands, but the margin of control is likely to be tight, and runoff elections are required for two Senate seats in Georgia in early January.“I think the uncertainty is going to catch up the market on a short-term basis,” said Leo Grohowski, BNY Mellon’s Wealth Management chief investment officer. “Perhaps next week could be a drifting lower kind of week.”- Advertisement – Spencer Platt | Getty Images News | Getty Images At the same time, there has been a surge in daily new coronavirus cases to more than 122,000. Economists are concerned that the economic recovery could suffer as some states could restrict activities and consumers may pull back heading into the important holiday season.The Fed, in its post-meeting statement Thursday, repeated that the course of the virus could help determine the path of the economy.- Advertisement – Ahead of the election, the market had been betting on a “blue wave,” where Biden would take the White House and Democrats would get control of the Senate, giving them total control of Congress. But when it appeared the Senate would stay in Republican hands, stocks surged on the idea of gridlock, which would keep Biden from implementing tax increases and lots of new regulations. After an initially exuberant election reaction, stocks may trade more cautiously in the week ahead, as investors watch election developments unfold and track the course of the coronavirus. – Advertisement –last_img read more

World Cup 2019 warm-up: Hosts England brush aside Afghanistan by 9 wickets

first_imgEngland cruised to a nine-wicket win over Afghanistan in their final World Cup warm-up at The Oval on Monday after a Jofra Archer-led bowling attack restricted the underdogs to 160.Opener Jason Roy smashed an unbeaten 46-ball 89, studded with 11 fours and four sixes, and Joe Root finished on 29 not out as England chased down the total with 32.3 overs to spare.After defeat to Australia in their previous warm-up game, Roy was pleased with his team’s all-round display ahead of Thursday’s World Cup opener against South Africa at the same venue.”I am feeling really good. I want the tournament to start now. It was a good preparation leading into Thursday (opening World Cup match,” Roy said.”We want to be doing this on Thursday and doing it throughout the whole tournament. The World Cup can’t come soon enough.”After England captain Eoin Morgan won the toss and opted to field, Archer and Root’s part-time off-spin delivered three wickets apiece in bowler-friendly conditions.Barbados-born fast bowler Archer struck twice with the new ball, drawing a top edge from Hazratullah Zazai before wicketkeeper-batsman Rahmat Shah holed out to mid-on.The wheels came off the Afghanistan innings when they lost four wickets in the space of just eight deliveries, with Hashmatullah Shahidi (19) and Najibullah Zadran (1) carelessly run out.Captain Gulbadin Naib (14) was caught at long-on to Moeen Ali and Rashid Khan edged Root to slip for a golden duck. Root claimed his third wicket as Aftab Alam chipped straight to point.Mohammad Nabi offered some resistance with a 42-ball 44, which included three sixes, but he was the last man out when a thick edge off Archer found Jonny Bairstow at deep third-man.advertisementEarlier in the day, England’s medical department delivered some positive news as seamer Mark Wood was declared fit to face South Africa.The 29-year-old Durham bowler had left the field after feeling discomfort in his left foot against Australia but scans have shown no sign of injury.Also Read | World Cup 2019: Waqar Younis feels Pakistan capable of reproducing 1992 magicAlso Watch:last_img read more