Investors are also ready to receive more coronavirus aid after Senate Majority Leader Mitch McConnell said on Thursday that he wants to pass the stimulus package before the end of the year, in contrast to pre-election comments that said a deal will wait until 2021.
UBS analysts said in a report on Friday: “A completed package at the end of the year will exceed investor expectations and significantly reduce future economic risks.
While that package will likely be a lot smaller than the $ 2 trillion plan Democrats put forward, the markets are getting comfort from the fact that the US economy has expanded over the past few months. .
“Unemployment fell, job openings rose again, home sales surged and corporate profits have clearly entered the corner,” said Nicholas Colas, co-founder of DataTrek Research.
Big warning: Although activity has increased in major economies following historic declines in the second quarter, the recovery is slowing and there are still major risks to the outlook.
The pandemic is expected to cause lasting damage to the labor market, even as some European governments expand their wage support programs next year. “There are risks that employment and income will be lower than before Covid for a while,” the Bank of England said in a statement on Thursday announcing more stimulus measures.
In the United States, where coronavirus infections are increasing at an alarming rate, recovery is exhausting. About 638,000 jobs were added in October, but the country is still down 10 million people since before the pandemic started.
While there may be little public support for indiscriminate deterrent policies in the United States, the rise of infections will at least mask corporate and consumer confidence. weigh on the economy.
According to Colas of DataTrek Research, fourth-quarter US GDP is closer to touching the negative than “comfort”. “For now, the market is fine with that, but further weakness could change their direction.”
Disney had a bad year
Disney reported its fourth-quarter and full-year earnings on Thursday, ending one of the worst fiscal years in its nearly 100-year history, my colleague Frank Pallotta on CNN Business reported.
What’s happening: Disney’s media empire has been plagued by the coronavirus epidemic. Its parks and resorts have been closed for months, its production is halted, and blockbusters like Marvel’s “Black Widow” are delayed until next year.
The company’s third quarter was poor, ending with a net loss of nearly $ 5 billion. Disneyland remains closed in California, and the company has temporarily closed parks in Paris to comply with closure measures.
Disney is laying off 28,000 U.S. employees at its park unit and has revealed plans to reorganize its entertainment division around streaming, mostly Disney + services, which is one point. big morning this year.
Disney shares have fallen about 12% this year.
Details: Investors and media observers will want to know how badly Disney has been going this year. They will also keep an eye on any numbers on the “Mulan” release on Disney + and details on how the media plans to recover next year.
Wednesday: Singles’ day in China; OPEC Monthly Report