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Vladimir Zernov
U.S. Stock Market

Traders Hope For A New Round Of Stimulus

Stimulus talks are back into spotlight as U.S. President Donald Trump has recently signaled that he wanted a bigger stimulus package. It remains to be seen whether Republicans will agree to such a deal, but Donald Trump stated that he could convince them.

The American economy clearly needs another round of economic stimulus, and the markets are convinced that Republicans and Democrats will ultimately agree to a compromise deal. However, the timing of such agreement is unclear so any indications that the deal may be coming soon are bullish for stocks.

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Not surprisingly, S&P 500 futures are gaining ground in premarket trading as traders increase their stock purchases on hopes for a big coronavirus aid package.

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Data From China Provides Additional Support To Stocks

Today, China reported that its GDP increased by 4.9% year-over-year in the third quarter. While analysts expected that GDP would grow by 5.2%, China’s growth is still impressive given the challenges posed by the pandemic.

Meanwhile, China’s Retail Sales increased by 3.3% year-over-year in September while Industrial Production grew by 6.9%, suggesting that Chinese economy continued to recover from the heavy blow dealt by the virus.

Many investors view China as an example of what will happen in other countries once they manage to contain the virus so positive data from China is usually bullish for stocks across the globe.

European Countries Introduce New Restrictions In Their Battle Against The Second Wave

European countries have so far managed to avoid nationwide lockdowns but new restrictions are introduced on a weekly basis.

Italy has provided its mayors with the power to shut public squares from 9 p.m. and introduced other curbs. UK is set to announce additional measures in Wales and Manchester as it tries to contain the growing number of daily cases. Ireland will also impose additional nationwide measures in the upcoming days.

At this point, the world markets have mostly ignored the potential negative impact from the second wave of the virus in Europe. While closures of pubs and gyms could be devastating for their owners, the negative impact on the whole economy is limited.

However, traders will continue to monitor the situation closely as potential nationwide lockdowns could deal huge damage to the European economy and cause a sell-off in the world markets.

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

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