This week, earnings and geopolitical events will be the focus for traders and investors alike. With 24% of the S&P 500 companies reporting quarterly results this week, ecodata, the European Central Bank, and ongoing Brexit negotiations, markets are on edge.
First, Brexit talks are coming to a head. With just two weeks left until the departure date set for Oct. 31, the British Pound is indicating investors and traders feel the likelihood of a hard Brexit or a no-deal departure is becoming less likely. A series of recent votes have limited Prime Minister Boris Johnson’s ability to follow through on his hard-nosed departure rhetoric, it’s looking more and more likely we’ll see some sort of a request for a three-month extension. The Sterling has rallied off the 2019 low posted on Sep. 4 at 1.1965 to back above the 130 handle (levels we haven’t seen since mid-May), signaling a more optimistic tone.
We’ve seen progress on the U.S./China trade front as negotiators appear ready to ink a Phase 1 deal. In terms of ecodata this week here in the U.S., keep an eye on Durable Goods Orders on Thursday for further insight as to the health and well-being of the U.S. consumer. On Friday, Consumer Sentiment data will also provide further information.
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