US Open – A disappointing week

A week that hasn’t lived up to expectations

This week hasn’t quite lived up to expectations and investors are getting a little nervous as we head into the final few months of the year.

The Fed is highly accommodative but not accommodative enough, Congress is desperate to agree a much needed relief package but no closer to doing so and virus numbers globally are rising, rapidly. What’s more, tech stocks – which were a driving force behind the outstanding stock market comeback – remain shaky and vulnerable to more downside.

While the end of the year could look very different – a Covid vaccine, political clarity and fiscal support – the next few weeks could be challenging. Congress is running out of time and an awful lot of compromise is required to get anything over the line. In the absence of a deal, it’s not hard to envisage a continuation of the tech-led correction in the markets.

UK heading for more restrictions as consumer continues to drive economic recovery

What’s more, we’ve long anticipated a tough winter as far as Covid is concerned but the spike has arrived early and restrictions are already being put in place which will weigh heavily on the economic recovery, just as policy makers were starting to feel a little upbeat about the pace of the rebound.

Here in the UK, regional restrictions are already being imposed in the hope that a repeat of the nationwide lockdown can be avoided but already there’s reports that a brief two week repeat is under consideration next month. It could be a bleak winter for business and the icing on the cake could be no-deal Brexit. Once again, compromise is required in these difficult times.

UK retail sales remained strong in August, up 0.8% compared to July and 4% since February. In an economy like the UK, consumer spending is hugely important and so these numbers are clearly a source of encouragement. Of course, that’s until you remember that the furlough scheme comes to an end in October, at which point the picture may change dramatically as unemployment soars. It may be time for another government u-turn to help the economic recovery navigate through the hard winter.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.