After the red Wednesday on the stock markets, the time has come for a green Thursday, where most markets are making up for some of yesterday's losses. The market received what the bear game indicated, i.e. new restrictions introduced mainly in France in Germany due to the spreading epidemic.
Germany imposed the closure of restaurants, pubs, cinemas, theaters and fitness centers. Schools and kindergartens will remain open. France also closes restaurants, forbids gatherings, and only to work, the doctor and stores will be allowed to go out, as those together with the schools will remain open.
The ECB will not change anything today?
Today the market is waiting for the decision of the European Central Bank. The ECB is expected to keep interest rates unchanged at today's meeting. Nor will it change the pandemic asset purchase program, which amounts to 1.35 trillion euros. It is expected that only in December the ECB will decide to increase the pandemic bond purchase program by 500 billion euros. It seems, however, that investors may already be looking for some indications as to the bank's readiness to use the program to mitigate the economic effects related to the deterioration of GDP growth prospects. The inflation outlook is also deteriorating, and the eurozone remains in deflation for the second month in a row. At the beginning of the week Christine Lagarde, head of the ECB, said in an interview with Le Monde that the set of tools to be used has not yet been exhausted.
America is waiting for important publications
In the USA, investors seem to be waiting for new data on GDP growth in the USA in the third quarter and quarterly reports of large technology companies. The contracts at Dow Jones increased by almost 150 points, while S&P 500 and Nasdaq gained almost 1%.
Today at 1:30 p.m., the Bureau of Economic Analysis will publish preliminary estimates of GDP growth in the third quarter, with forecasts indicating a record 31% annual result.
Amazon, Alphabet, Apple and Facebook will publish quarterly results today, which may also affect the further behaviour of the US stock market and entire stock indices.
Oil is becoming cheaper as stocks are piling up
Oil futures fell by more than 2 percent to $36.6 per barrel, the lowest level in seven weeks. During the week, the price of a barrel of WTI oil fell by more than 8 percent, making the raw material one of the faster losing markets of all popular ones.
Data from both EIA and API has put additional pressure on prices. They showed higher than expected crude oil stocks in the USA, which were created last week. The EIA report reported an increase in US oil stocks of 4.320 million barrels in the week ended October 23rd, and the API report showed an increase of 4.577 million barrels.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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