Interactive Investor

Market snapshot: stocks start week in optimistic fashion

19th October 2020 08:09

Richard Hunter from interactive investor

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The positive tone struck at the end to last week has spilled over into Monday's session. 

Investors are braced for a busy week with pointers coming thick and fast on the immediate direction of the markets.

In the US, the economic data remains mixed, with a positive retail sales figure offset by weaker-than-expected industrial production at the end of last week. Hopes for a pre-election fiscal stimulus are hanging by a thread, with time running down to 3 November.

The last US Presidential debate on Thursday will provide the challenger with an opportunity to consolidate his current lead in the polls, while in the meantime results from the likes of Netflix (NASDAQ:NFLX) and Tesla (NASDAQ:TSLA) will be scrutinised to see whether the year to date share price outperformance from each (up 64% and 424% respectively) remains justifiable.

Ahead of an important week, the major indices are all in positive territory for the year, with the Dow Jones index ahead by 0.2%, the S&P 500 7.8% and the Nasdaq 30%.

Elsewhere, there are also opposing indicators on the health of the global economy. China continues to benefit from being one of the first seemingly to emerge from the pandemic, with a reasonably strong GDP number suggesting recovery. And in Europe, the latest round of Covid curfews threaten to derail any tentative economic progress which had been made.

The UK also remains in the spotlight, with EU discussions coming to a head as the political grandstanding from both sides edges towards a conclusion. At the same time, the latest set of lockdowns add to a list of economic headwinds which do not bode well for the remainder of the year.

The FTSE 100 remains persona non grata on the international investing stage, with the index currently down 21% in the year to date, and with few signs of positive catalysts emerging.

Barclays (LSE:BARC) kicks off the UK banking third quarter reporting season on Friday, with clues from the equivalent US sector suggesting that the need for further bad loss debt provisions may not yet have run its course. Given the performance of the banks in the year to date, any positive news would be welcomed.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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