Morning 10-27

Calendar

  On Thursday ECB meeting expected to be Dovish Unlikely The announce an increase in Bond buys, but still a small chance they do

Also, On Thursday After close Apple, Facebook and Alphabet al release earnings

News:

Chip makers in Focus this morning AMD agrees to Buy Rival Xilinx for $35B in stock

25 SPX companies reported earnings this morning 24 beat, the only loser is Eli Lilly as it set aside $400M for Covid related R&D. Microsoft reports after the close today 3 rd largest weighting in SPX. Caterpillar beat but did say that machine sales on a 3-month rolling basis are down 20% (BBG)

Hurricane Zeta Cat 1 hurricane is a fast-moving storm expected to make landfall Early Thursday morning, the path Continues to move north east away from most of the Energy infrastructure in the Gulf

German M3 money supply multiyear high and Still not a whiff of Inflation to be found

From Mizuho “Markets are paying particular attention to control of the US Senate. Continued Republican control of the Senate would likely result in a smaller fiscal stimulus package than House Speaker Pelosi is seeking. Victory for Joe Biden and a flip of the Senate to the Democrats would clear the way for a bigger-scale stimulus. The implied probability of a Blue Wave. US PredictIt 2020 Will Democrats win the White House and Senate and House (PRITUSDS Index GO) up 4% to 57% (https://www.predictit.org/). One factor behind the selloff in stocks yesterday was the precipitous drop in these odds from October 7th (62%) to October 24th (51%)”

The 10 day Moving average of Put/call ratio hit highest level in 14 years, playing volatility by buying Puts instead Vix?

Senate is adjourned till Nov 9th No deal till after election

France is considering a full 3-week lockdown of 3 cities poss from Friday; the areas are Paris/Lyon / Marseille, measures would inc a 19.00 curfew/closing public transport/ closing non-essential retail; a decision is expected in next few days

Markets:

 Remember that markets more to Surprises then known Events this second, third surge in Virus cases was not unexpected thus the limited reaction in Risk due to spike in cases

 Stocks in Europe sideways to lower 14 -20 Stoxx 600 sectors lower today, Spoos and Nasdaq trading higher as are treasuries. Dollar a bit soft, market waiting for next Week’s election.

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