Markets reacted positively to a new round of vaccine optimism and diminishing political uncertainty.
Markets reacted positively to a new round of vaccine optimism and diminishing political uncertainty. On the political front, Joe Biden has named former Fed Chair Janet Yellen as his nominee for Treasury Secretary. Yellen’s dovish tenure while at the Fed and, more notably, the fact that she is a recognized figure, appeared to comfort investors.
Reports that Biden’s transition team was pushing Congressional Democrats to deal with Republicans on fiscal stimulus also appeared to enhance sentiment, although these were later denied by a spokesperson. On the economic front, while the US has not implemented the same degree of restrictions as Europe, rising cases already have had an effect on consumer and business behaviour.
Initial jobless claims rose surprisingly to 778,000, their highest level in five weeks and the second consecutive weekly increase, while personal income fell 0.7% in October, offsetting September’s gain. Also, the latest monthly numbers on U.S. consumer confidence indicate that spiking coronavirus cases may have reversed a recent uptick in optimism.
The University of Michigan’s gauge of November consumer sentiment was revised slightly lower and hit its lowest level (76.9) since August. The Conference Board’s measure of consumer confidence also fell more than expected. On the contrary, core capital goods orders surprised on the upside, rising 0.7% in October, while new home sales also surprised on the upside. GDP grew at an unrevised 33.1% annualized rate, the government said in its 2nd estimate of Q3 output.
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