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Top 5 things to watch in Thursday's financial market | 1st October, 2020

Top 5 things to watch in Thursday’s financial market | 1st October, 2020

  • Update Time : Thursday, October 1, 2020
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Top 5 things to watch in Thursday's financial market | 1st October, 2020
Top 5 things to watch in Thursday's financial market | 1st October, 2020

Here are five things to keep in mind in the economic market on Thursday, 1st October:

1. There is still the possibility of an stimulus package

The U.S. dollar has depreciated and the value of risk assets has risen as the U.S. government may announce new stimulus packages before the election.

Treasury Secretary Steven Mnuchin said he had held talks with House Speaker Nancy Pelosi and that the two sides were $600 billion away from their proposed package. According to the Wall Street Journal, the two agreed that the new incentives would be given to household spending, which would increase consumer spending.

Pressure on the government to implement the incentives has increased after a number of large companies announced job cuts.

2. Jobless claims and ISM are going to be published

A lot of economic data will be released today, including weekly Jobless claims at 6:30 a.m. Eastern time. Personal income and expenditure reports will be published at the same time. Besides, ISM manufacturing survey will be published at 10 am.

Last week, the weekly Jobless claim was over 850,000. The same amount is expected this week as well. The NFP, which is due to be released next week, expects unemployment claims to fall by 350,000 to 12.25 million.

Philadelphia Fed President Patrick Harker will speak at 9:30 a.m. Eastern time, New York Fed President John Williams at 9 a.m., and Governor Michael Bowman at 3 p.m.

3. The New York session is going to start upwards

The US stock market is going to start the fourth quarter in an upward trend with the expectation of new stimulus. The possibility of such an incentive has been declining in the last few weeks as the two sides in the US Congress did not want to back down from their positions.

At 6:30 a.m. Eastern time, Dow futures rose 216 points, or 0.7%, while S&P futures rose 0.9% and Nasdaq 100 futures rose 1.3%.

The stock market will be looking at Pepsico (NASDAQ: PEP) which has reported 12% higher earnings than forecast.

4. The Fed has increased restrictions on bank dividends and buybacks

Banking stocks will be under scrutiny as the Federal Reserve extends restrictions on dividend payments and stock buybacks later this year.

The Fed says it wants banks to keep their capital stable, which means the Fed is worried about $40 billion loans from the second-quarter.

Earlier, JPMorgan (NYSE: JPM) boosted investor confidence by saying it could start buyback in the fourth quarter.

5. Eurozone PMI to two-year high; Brexit tensions are extreme

Factory production in the eurozone rose in September, according to IHS Market’s Monthly Purchasing Manager Index.

The eurozone’s manufacturing PMI rose to 53.7 this month from 51.8 in August, the highest level in two years.

The pound, meanwhile, has plummeted. The European Commission has said it will take legal action against the UK for violating the Brexit deal. According to the report, EU leaders will not accept any of the UK’s demands in the ongoing negotiations.

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