5 Important Things to Know This Week
5 Important Things to Know This Week. Earnings continue but they are likely to be overshadowed by the weakening of the economic recovery, the lack of progress in the incentive package negotiations, and the increasing coronavirus cases again. The USA home sales data and unemployment pension applications will be a quiet week in terms of the economic calendar in the USA. In the Atlantic, Brexit may attract attention. On the other hand, China's GDP data will be announced at the beginning of the week and is expected to point to a regular recovery in the world's second largest economy. Here are 5 important developments you should know this week.
- Time Is Running Out For Incentive Package
The $ 300 billion stimulus package proposed by the Republicans which is a fraction of the $ 2 trillion demanded by the Democrats, will be approved by the US Senate on Wednesday.
Described as a “weak” support for the drastically downscaled package, the bill was rejected by the Democrats last month. Accordingly, this bill is expected to fail again.
Even if the increase in
cases in the coronavirus epidemic and the stagnation in business growth continues, the time to reach an agreement on the coronavirus financial support package before the presidential elections to take place on November 3 is quite narrow.
Almost half of the 50 states in the USA, where the most cases and deaths were recorded in the epidemic, reported their highest number of cases since October.
- Earnings Period Reports Accelerate
While the reports for the second quarter of 2020, defined with the coronavirus epidemic, are announced, the earnings period will increase.
Investors are eagerly awaiting the release of Netflix on Tuesday, Tesla and Verizon on Wednesday, and Intel (NASDAQ: INTC) on Thursday.
Due to the quarantine restrictions that came into effect after the coronavirus outbreak and the absence of TV programs in the first half of the year, Netflix experienced one of the biggest profits from the epidemic, experiencing a large increase in users.
Procter & Gamble, Travelers, American Airlines and
American Express are also among those who will announce the report. Reports will be presented in Haliburton on Monday and Baker Hughes and Kinder Morgan on Wednesday.
- Reports Day in the USA
Housing starts in the United States on Tuesday and housing sales on Thursday are expected to indicate a recovery in the housing sector, which is known as the main force of growth.
While record mortgage rates point to a recovery, the way of working returns to “work from home” in the long term due to the epidemic helps to encourage buyer interest.
The first unemployment applications, which reached a surprising two-month high last week, raising concerns that the recovery in the labor market is slowing, will also be among the issues of attention.
On the other hand, the Federal Reserve (Fed) will announce its Beige Book, which collects anecdotal data from 12 Fed banks on local economic conditions in their regions.
- Brexit Uncertainty Continues Pressure On Sterling
The uncertainty over whether a commercial agreement will be made before December 31, which is the deadline for Britain's exit from the European Union, causes pressure on the pound.
At a summit where Brexit was discussed last week, EU leaders expressed concerns about the lack of progress in the exit talks and called on Britain to make concessions on disputed areas or to exit the bloc without an agreement as of January 1, when the transition period ends.
Fair competition, the way to solve problems, and fishing were described as three problematic points.
Sterling can gain from signs that “Britain will not stop negotiating”. On the other hand, as the economic effects of the epidemic increase, the possibility of prolongation the negotiations may keep sterling on its toes.
- Third Quarter GDP of China
China will publish GDP data for the third quarter, which is expected to show that the economic effects of the coronavirus pandemic are diminishing.
The Chinese economy, known as the world's second largest economy, is expected to accelerate and grow by 5.2 percent annually in the three-month period until September, compared to the 3.2 percent growth announced in the second quarter.
A strong reading before the interest rate assessment on Tuesday, which is not expected to change for the 6th month in a row, will support the argument to keep interest rates on hold.
GDP figures to be announced are also expected to show a recovery in retail spending, which is a soft point. While the effects of the epidemic are greatly reduced, this may indicate better spending worldwide.
