Dubai: As global markets anticipate a highly contested US election little over a week away, investors will meanwhile await any new hints this week on who will likely win the presidency of a key economy.
With the day of the election and the following weeks widely expected to be detrimental to markets, global investors were hoping for more cues on how the vote will impact the short-term view of the world’s top economy, which currently continues to reel in a surge of new COVID-19 cases.
“The final US presidential debate was less chaotic than the first but offered little new information to inform the result for markets,” wrote Stephen Innes, Chief Market Strategist for Axicorp. “Meanwhile, talks relevant to the post-election economic outlook was limited, particularly from President Trump.”
Wall Street investors late last week were weighing better-than-expected weekly unemployment claims in the US against continued monetary stimulus negotiations, with Senate Republicans showing little sign of support for a potential deal.
Stimulus unlikely before US vote
Investors worldwide in the past weeks have been gauging the chances of a deal on more fiscal support for the struggling economy, however, prospects of a deal has currently dimmed as it looks unlikely Democrats and Republicans will this week strike a bargain on an aid package.
New US weekly jobless claims totaled 787,000 last week, coming in below the median economist estimate of 870,000. It also marked a decrease from the prior week’s revised total. Additionally, several earnings reports from big US companies came in better than analysts had expected, which helped put investors in a buying mood.
With earnings season in full swing, investors are hinted that some firms are adapting to uncertainty about a global pandemic that may extend deep into next year. Overall, 73 companies in the S&P 500 index have offered guidance this quarter so far, well below the 170 firms that typically offer guidance.
UAE, GCC indices largely slip
Apart from the bourse in Abu Dhabi, indices in Dubai and elsewhere in the oil-dependent Gulf region were in the red at the start of the week, as investors turned wary amid a continued drop in oil prices.
Rising COVID-19 cases in several parts around the world has posed a renewed threat to oil demand, and sent oil prices back below $40, turning investors much more cautious than before.
Dubai’s main share index (DFM) slipped 0.37 per cent, bogged down by a 0.8 per cent drop in shares of real estate giant Emaar Properties. The Abu Dhabi index (ADX), meanwhile, edged up 0.25 per cent, with Abu Dhabi Commercial Bank advancing 1.9 per cent.
Elsewhere, the Saudi benchmark index declined 0.6 per cent, while in Qatar, the index dropped 0.4 per cent. The Bahrain bourse dropped 0.85 per cent, while Kuwait’s key index was down 1 per cent. Jordan’s Amman Stock Exchange benchmark was down 0.2 per cent.