Due to the upcoming Christmas holidays, many economic reports have been moved to today, making Wednesday’s agenda packed with events.
First off, the day began with the minutes from the latest policy meeting of the Bank of Japan, which held no surprises for investors. The coincident index, also from Japan, was slightly worse than anticipated at 89.4.
Spain published the final round of GDP growth reports for the third quarter, which were worse than expected. Year-on-year, Spain’s GDP has grown by -9%, in large part due to the country’s prolonged and difficult fight with the coronavirus pandemic.
Italy, who had a similar Covid-19 experience, published upbeat reports on business and consumer confidence, pleasing investors.
The schedule of economic publications will be the heaviest in the United States today, where we await the core PCE index, durable goods orders, and the overall PCE price index. In addition, initial and continuing jobless claims report, together with the 4-week jobless average and income and spending reports are going to be released later today.
Investors also await the Michigan economic projections reports, as well as oil inventories data out of the United States today.
Meanwhile, President Trump is causing more disruptions in the US. He has refused to sign the stimulus bill that months of difficult negotiations between the two chambers of Congress negotiated. He claims the funding is too little (which is technically correct) to satisfy the needs of the economy, failing to recognize that a little bit now is better than nothing, something President-elect Joe Biden touched upon recently. Senate Republicans are not going to agree on a more generous bill, so if Trump kills this one, there will be no stimulus until Biden is inaugurated.
In Europe, France was forced to reopen its border with the United Kingdom due to economic concerns. As the news of the new strain of coronavirus in the UK broke out, many countries imposed travel banks on the UK. But this has meant European transport trucks have been stuck in the UK and vice versa. The pressure of the incident proved too great, and now traffic with the UK will be restored, despite all health concerns.
On the stock markets there is more stability today, which may hold around Christmas. Stock indices are recovering in value. Companies to watch include Tesla and Apple, which bickered over the latter’s announcement it will expand its business into the electric vehicle market. Tesla CEO Elon Musk shared on Twitter that years ago he tried and failed to sell Tesla to Apple because the tech giant was not interested. Tesla stock fell due to this news.
