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Vladimir Zernov
U.S. Stock Market

Coronavirus Aid Talks Continue

Yesterday, S&P 500 lost more than 1.5% on signs that U.S. Republicans and Democrats will not be able to reach consensus on the new coronavirus aid package deal before the November election.

Today, S&P 500 futures are gaining ground in premarket trading amid renewed hopes for a stimulus deal. On Monday, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin talked for about an hour and managed to narrow the gap between the positions of Republicans and Democrats.

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Their talks will continue today, and traders hope that they will ultimately manage to agree to a new stimulus package. Failure to reach consensus on the new aid deal could lead to another sell-off.

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Brexit Talks Have Stalled

EU and Britain continued to blame each other after they failed to reach consensus on the Brexit deal. However, it looks like both sides are not ready to walk away from the deal, and both EU and UK signaled that they were prepared to continue negotiations.

Despite the absence of any material progress, the market believes that the deal is imminent. EUR/USD and GBP/USD have gained ground in October as currency traders have mostly ignored Brexit risks. Meanwhile, stock traders are more focused on the U.S. stimulus deal and the second wave of coronavirus in Europe.

In this situation, a potential Brexit without a deal could turn into a real black swan event for markets as it looks like nobody is prepared for such a scenario.

U.S. Building Permits Increased By 5.2% In September

The U.S. has just provided Building Permits and Housing Starts reports for September. Housing Starts increased by 1.9% after declining by 6.7% in August (revised from -5.1%). Analysts expected that Housing Starts would grow by 2.8%.

Meanwhile, Building Permits grew by 5.2% compared to analyst consensus which called for growth of 1.8%. Back in August, Building Permits decreased by 0.5% (revised from-0.9%).

The housing sector remains a bright spot in the U.S. economy, and the new reports are bullish for stocks.

For a look at all of today’s economic events, check out our economic calendar.

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