LCG: Trump Supreme Court pick & durable goods

LCG: Trump Supreme Court pick & durable goods

Equity
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By Jasper Lawler, Head of Research, London Capital Group

Speaker Pelosi leaving the door ajar for a stimulus deal despite the wrangling over the Supreme court is a source of relief from the selling pressure across markets

Amazon's hardware day extravaganza seemed to bolsterer sentiment in the hard-hit tech sector.

MARKETS

The Dow Jones ended slightly higher on Thursday, but investors had to deal with intra-day volatility as markets struggled for direction. The rally in tech lost some steam as Apple and Microsoft eased from session highs, though both were up 1%.

Investors' sentiment was also boosted by signs U.S lawmakers are still seeking to get a deal done on further stimulus before the election. The dollar tumbled intraday, ending a 4-day winning streak. Asian stocks were mixed this morning.

DAY AHEAD

For the day ahead, I’ll be watching out for how markets prepare for President Donald Trump announcing his supreme court nominee on Saturday- as well as US durable goods data.

With five weeks to go until the election, there’s no doubt political uncertainty has played a role in the risk-off market environment this week. There is a specific reason for that in that economists had been basing their forecasts for a late year economic recovery off the idea there would be a second US stimulus package- but politicians couldn’t come up with an agreement.

Who the president picks as his supreme court nominee could shape the response from Democrats - and how drawn out the battle could be and distract from the need for further government support. Republicans plan the vote for October 29 according to the AP, four days before the election- and so far only 2 Republicans have come out against having the vote before the election. The favourite appears to be Judge Amy Coney Barrett.

The US dollar has been breaking higher this week - putting the focus on the major data release today which is durable goods orders in August. The growth in the headline number is expected to have decelerated substantially to 1.5% from 11.4% and ex-transport orders are expected at 1.2%, down from 2.6%.

Pent up demand for vehicles with low interest rate loans pushed orders higher over the previous two months. Now that has gone economists will judge something closer to the real state of demand.