After three sessions of decline, there is more optimism on Wall Street today, which is also supported by macroeconomic data on retail sales. However, with no agreement on the aid package and a rapidly growing number of new COVID-19 cases, the question remains open as to whether the good sentiment will continue next week as well.
U.S. retail sales increased by 1.9 percent in September compared to the previous month after rising by 0.6 percent in August. The market consensus assumed growth of only 0.7 percent, which is the highest sales growth in three months. According to the published data, 11 percent of clothing and 4 percent of cars were the highest growth. In annual terms, retail sales increased by 5.4 percent.
Consumption, as the driving force behind the U.S. economy, has raised futures contracts on stock indices. Futures on DJIA increased by nearly 150 pts. and on the S&P 500 by nearly 20 pts. Meanwhile, futures contracts on Nasdaq gained almost 80 points. Pfizer also reported that it may apply for its test vaccine for COVID-19 as early as November, which may have a calming effect on markets that feared a slowdown in economic recovery after the first wave of coronavirus. The U.S. pharmaceutical group announced that the application for the vaccine may be made as soon as safety data is available in the third week of November.
In Europe, pan-European STOXX 600 increased by 0.8% after losing more than 2% on Thursday, as new social restrictions in Europe, including curfew in major French cities and tighter restrictions in London, scared investors, Reuters said. Now the key question is whether today's rebound will be sustained next week and in the increasingly intense influenza season.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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