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Paused vaccine trials hit market optimism

Eli Lilly has put its antibody treatment for the coronavirus on hold after Johnson & Johnson paused its vaccine trials on Monday.
The pauses stretch out the timeline for when investors should expect to see a vaccine approved.

MARKETS
Europe open
European markets look set for a flat to positive open as coronavirus drug trials are paused after Wall Street snapped a 4-day winning streak after the release of the new iPhone from Apple.

Eli Lilly pauses trials
AstraZeneca has since resumed its trials that were paused everywhere except in the US. Odds are the Eli Lilly and J&J trials will resume too. But while it is just a pause, it’s still a setback in a race that everyone has an interest in being finished. With J&J also reporting a rise in profits in its Q3 results, the shares were largely unaffected but the news did weigh on broader risk taking appetite.

Big banks double profits, investors not impressed
A more than doubling of profits over last quarter at JP Morgan Chase and Citigroup have got bank earnings season off to a good start. The banks set aside huge loan loss reserves in the first and second quarter of 2020 and an improving economic outlook meant they needn’t do so again this time. JP Morgan set aside just $611m compared to $10.5billion last quarter. However investors were non-too impressed and the stocks fell. There may have been a little unease about prospects for the banks heading into next year given their projections. JP Morgan lowered its forecasted unemployment for Q4 this year but kept its expectations for Q2 and Q4 2021 about the same.

IMF World Economic Outlook
Stocks pulled back, the dollar gained as a haven and bond yields moved lower as the IMF tempered its improved growth outlook with a warning on asset prices. The IMF’s Tobias Adrian suggested asset prices were being held aloft thanks to policy stimulus and that a delay to the economic recovery could see a sharp adjustment lower in prices. The IMF now expects a -4.4% contraction in 2020, better than the -4.9% forecast made in June and reduced its 2021 forecast to 5.2% from 5.4%.

Apple's iPhone 12
Apple shares closed over 2% lower following the release of its first 5G enable iPhone. It was a classic buy the rumour sell the fact event. Options trading volumes go some way to explain a somewhat unexplainable 6% in Apple’s stock on Monday. Call volumes were back up near the same levels of July and august before the September tech wreck. The biggest feature of the new phone was known well in advance- its 5G capability, the rest was open to disappointment. Apple's new 'barbell' approach to pricing has got a few investors nervous that the 12 mini edition could cannibalise the 12 Pro Max

DAY AHEAD
Speeches from ECB’s Lagarde, Mersch and Lane
US PPI data
Bank of America earnings
Wells Fargo earnings
Goldman Sachs earnings
United Airlines earnings

23-10-2020

Bitcoin above 13k, Barclays Q3 results & flash PMIs
The day ahead will see the reaction to the second and final US presidential debate as well as the release of October PMIs and Q3 earnings from British bank Barclays. European stocks look set for cautiously higher open with the idea that the presidential debate… Read more

22-10-2020

Intel is selling off parts before Q3 results
The day ahead will see two US corporate behemoths Intel and Coca-Cola report Q3 results while the lack of US stimulus puts the spotlight on weekly jobless claims. European stocks look set for opening losses on Thursday with indices testing the lowest levels in… Read more

21-10-2020

No pre-earnings delirium for Tesla
The day ahead will see earnings from EV carmaker and retail options trading favourite Tesla and the UK reports inflation stats at a critical stage in EU/UK trade negotiations. This really feels like it's the last-chance saloon for a pre-election US stimulus bi… Read more

20-10-2020

Netflix earnings and stimulus deadline
MARKETSEuropean markets have opened lower following the late losses headed into the close on Wall Street. Stocks in Asia are mostly lower with the exception of China after the PBOC kept the LPR steady. Early optimism gave way to sweeping losses across stock ma… Read more

19-10-2020

48 hours for stimulus, China GDP grows
HEADLINESChina GDP grew 4.9% in the third quarter, slightly missing estimates Stocks are bouncing back from last week’s sell-off on hopes for US stimulus There could be a coronavirus stimulus bill within 48 hours and an emergency-use COVID-19 vaccine by Novemb… Read more

16-10-2020

Stricter COVID rules send stocks tumbling
MARKETSWall Street ends well off lows in wild tradingThe US equity benchmarks fell for a third day but by much narrower margins than mid-day losses would have implied. The Dow was down by over 300 points but bounced back to close just 20 points lower. Facebook… Read more

15-10-2020

US bank stocks getting clobbered
The British pound rallied (GBP>1.30) after the UK signalled it would not walk away from trade talks after today's EU Summit. Big US banks have seen shares turn lower after earnings results. The prospect of future loan losses and low interest rates are keepi… Read more

14-10-2020

Paused vaccine trials hit market optimism
Eli Lilly has put its antibody treatment for the coronavirus on hold after Johnson & Johnson paused its vaccine trials on Monday. The pauses stretch out the timeline for when investors should expect to see a vaccine approved. MARKETSEurope openEuropean mar… Read more