Santiago, Chile, Panamá, Hong Kong, Lebanon, Spain, Beirut, Kashmir, Bolivia, Iraq, Russia and before that, the Czech Republic, Algeria, Sudan and Kazakhstan are the group of countries that have had some sort of disturbance or social instability over the past few months.
Nevertheless, that didn’t stop the stock markets from advancing towards new all-time highs amid the growing expectations for progress on the "phase one" trade deal between the US and China.
To be more precise, the S&P 500 once again almost set new record highs last Friday, but fell short of reaching moments later, finally closing week with a 1.2% growth (reaching 3.023 bp).
Better than expected third-quarter results could be also considered as one of the main drivers, especially in case of semiconductor companies.
For the rest, the Dow Jones Industrial Average improved +0.6%, Nasdaq Composite increased +0.28%, and Russell 2000 gained 0.55%.
Keep an eye on euro and British pound
Despite the fact that on Wednesday the British Parliament gave the green light to the preliminary approval to the Brexit deal with the European Union’s (EU) 27 member states, the second vote to enact its legislation before the Oct 31 deadline was defeated.
Thus, the next week will be crucial for both the UK and EU.
In the meantime, the European Central Bank (ECB) kept its benchmark rate unchanged at -0.5%. On the other hand, another round of bond purchases at a pace of 20 billion euros per month will begin next week.
It is worth mentioning that at the end of the month current ECB President, Mario Draghi, is stepping down.
Due to global growth slowdown, investors expect new stimulus plans designed to reinvigorate the economy.
There is a very low probability that the ECB is going to change the parameters of its monetary policy last minute, even though Mario Draghi may use his last meeting to encourage governments to use fiscal measures to promote growth.
Over the next week, the following important economic events will take place:
1. On Monday, we have ECB's President Draghi speech at 10am; A bit later, the Tokyo CPI ex Fresh Food (YoY).
2. On Tuesday, Consumer Confidence together with Pending Home Sales (MoM) in the US and Consumer Price Index (QoQ) with RBA Trimmed Mean CPI (QoQ) in Australia will be released. In addition, RBA's Governor Lowe speech will take place.
3. On Wednesday, German Harmonised Index of Consumer Prices (YoY) and U.S. Annualised Gross Domestic Product will be published. In case of Canada, it is recommended to pay attention to Bank of Canada Monetary Policy Report, BoC Interest Rate Decision and BoC Rate Statement, followed by a press release. Don’t forget that the US Fed is also going to take interest rate decision.
4. On Thursday, Consumer Price Index - Core (YoY), Gross Domestic Product s.a. (YoY), Consumer Price Index (YoY), Gross Domestic Product s.a. (QoQ) in Europe and Caixin Manufacturing PMI in China will be published.
5. Finally, on Friday, we will get US Non-farm Payrolls, ISM Manufacturing PMI and Average Hourly Earnings (YoY) data, together with the September jobs report.
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