The tension is rising a notch and all eyes are turning to the economic sectors already weakened by the crisis. Financial markets remain fairly stoic, still irrigated by public support measures. In Europe, they have been more or less stagnant for the past few weeks. On Wall Street, it's a little more choppy, but the losses of early September are gradually being erased. Eight days before the presidential vote on November 3, Joe Biden remains well ahead in the national polls, and remains one step ahead in key states. But in battleground states, Donald Trump is polling pretty much the same as he was in 2016, so the suspense is maintained.
Meanwhile, there are no signs of a compromise that would allow a new stimulus plan to pass through Congress. House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows accused each other of blocking talks, suggesting that an agreement before next week's election is highly unlikely.
The last week of October will be the busiest week for earnings reports in the third quarter. More than 180 companies from the S&P500 index and more than 120 from the Stoxx Europe 600 will posts their results. Including the Microsoft quintet (Tuesday), Alphabet, Apple, Amazon.com, Facebook (Thursday). These companies will focus all the attention while the earnings season is for the moment judged positively by FactSet. On the S&P500, the companies that have already published their results exceed analysts' expectations in record proportions (relative data), but the results naturally drop sharply compared to the same period in 2019 (raw data). To give you an idea, while 27% of the companies in the index had published as of October 23, 84% exceeded expectations. The pendulum effect of analysts' forecasts clearly works both ways.
In Europe, rating agency S&P revised its outlook on Italy's rating. The latter thus goes from "negative" to "stable". S&P also confirmed that it is maintaining its long-term and short-term ratings. This decision should give a boost to Italian bonds, allowing Rome to borrow at lower costs. Meanwhile, the German IFO Business Climate Index is worse than the consensus (92.7).
Today on the agenda, we have the Chicago Fed index and new housing figures.