August 24, 2020

Stock Futures Climb, FDA Approves Covid-19 Treatment

Stock Futures Climb, FDA Approves Covid-19 Treatment

European futures are advancing and picking up the positive momentum from Asian markets. Traders are likely to remain more focused on this week’s Fed’s annual economic policy symposium that takes place in Jackson Hole. The event will be live-streamed on the 27th and 28th of this month, and the Fed will elaborate on its monetary policy framework. In addition to this, Trump and members of this family will speak at the GOP’s national convention this week.

Trump Show 

Last week, Americans heard from the Democrats, and this week, it is all about the Republicans. The important element to focus on here will be the policies that could escalate the tensions between the two biggest economies of the world, China and the U.S. Also; investors will be looking at whether Trump will cause further division with his speech, or if he can bring everyone together. Policies designed for an economic recovery and strategies intended to contain the virus are likely to bring more headlines to the markets. 

Jackson Hole 

Dow Jones futures will remain sensitive to the Federal Reserve monetary policy framework review and their stance towards controlling inflation in the country. Traders will be interested to know how the Fed is anticipating to breathe some life into inflation, and more importantly, what the Fed view of the U.S. economy is. The recent economic number for the U.S. job market indicates that the data has started to tick higher once again, which means more Americans are filling for Initial Jobless Claims. 

GDP Numbers

In Europe, the emphasis remains on the EMEA final GDP numbers. This data is likely to drive the price action for the European equities this week. The GDP numbers are expected to show the extent of damage done to the European economies during the second quarter when the lockdown restrictions were at their highest level. The anticipation is that there may be a synchronized recovery in the region from here onwards, although there are several questions about the recovery pace inside the eurozone. 

No Word on Stimulus Package 

The fiscal support, the second stimulus aid package, isn’t looking imminent. Democrats and Republicans are still very far from reaching a deal, and this means no further immediate aid in terms of fiscal policy. Investors want to know how the Fed intends to use their language to make politicians understand in Washington the importance of another stimulus package.

Oil Prices and Two Hurricanes 

When it comes to the oil market, it is all about the disruption in the U.S. Gulf coast’s oil operation from two significant hurricanes, Marco and Laura. Oil suppliers in the region have shut down their production, and energy-producing platforms have been evacuated. Hurricane Marco is recently downgraded while the hurricane Laura is expected to be a category two hurricane.

Both WTI and Brent are trading lower today. The WTI is trading is at 42.24, and it is down by 02.4% while the Brent price is at 44.29, and it fell by 0.11%.

States such as Texas and Louisiana have declared emergencies, and as the hurricanes are rolling in from various directions, the damage could be in the billions. These hurricanes are coming at a time when Americans are already struggling with the pandemic situation in the U.S.; the economy is already weak, while recovery remains fragile.

Gold Traders Focused on Coronavirus and Jackson Hole

Gold investors will be particularly following the Federal Reserve’s commentary from Jackson Hole. The upcoming event could bring mammoth moves for the gold price.

Gold traders are also paying attention to a potential coronavirus treatment. The regulators now approve the use of blood plasma from recovered Covid-19 patients in the U.S. This has increased appetite among investors for risk on trades, and hence the precious metal is trading lower by 0.35% today. Most of the positive coronavirus related news has been negative for the gold price.