Time expires: Pelosi’s 48 hours, Last Days of Brexit, OPEC+

20 oct. 2020

Markets are still interested only in two topics: stimulus in the US and Brexit. All other information is tangential. For example, the earnings season in the United States, China's GDP data (worse than forecasted, but still +4.9% compared to the same period last year in the current reality is just an excellent result), industrial production (+ 6.9% y / y ) and retail sales (+ 3.3% y / y), as well as retail sales in the US (last week they came out much higher than forecasted), a sharp deterioration in the epidemiological situation in the world.

The only thing that pleases in all this: time is running out. The case of stimulus for the United States, according Democratic spokesman Nancy Pelosi expires in 48 hours (starting Monday) – if there will be no deal, the issue of stimulus will be closed until the elections, which means almost certainly until 2021.

Brexit is also on the finish line. Despite Johnson's withdrawal from the negotiations, they continue and the markets are full of hopes for a deal. An additional reason for optimism is inspired by the expectation that the Internal Market law will be revised. But again, the countdown goes on. In theory, the deadline is early November. But in reality, at any moment the situation can change, so trading with the pound in such conditions is extremely risky, but interesting and promising.

Meanwhile, yesterday the oil market was awaiting for the meeting of the OPEC + technical committee. But nothing radically new has happened. All the most interesting, obviously, has been postponed to December. When OPEC + will need to decide to keep 7.7 million bbl / d of voluntary production cuts, or, as previously agreed, increase production by another 2 million barrels per day. So, our recommendation is unchanged - we are actively selling oil from the current prices.

Pfizer, meanwhile, took the lead in the vaccine race. The company is so confident in its vaccine that it has already begun mass production without waiting for regulatory approval. In this light, we cannot but remind that purchases of Pfizer shares are one of the few noteworthy purchases in the US stock market nowadays.