Virus Numbers Surge, Jobless Claims Due, Turkey Rate Hike - What's up in Markets

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Virus Numbers Surge, Jobless Claims Due, Turkey Rate Hike - What's up in Markets
Credit: © Reuters.

By Geoffrey Smith -- Stocks are set to open lower as new record hospitalizations hit the U.S. and New York City closes its public schools. Jobless claims data are due, as are two regional surveys from the Federal Reserve. Turkey raises rates dramatically to halt the lira's decline, while Indonesia cuts them to a new record low. Oil slips on reports of unhappiness among its members at current production quotas. Here's what you need to know in financial markets on Thursday, November 19th.

1.  Virus numbers surge; New York to close schools 

The U.S. passed the grim milestone of over 250,000 deaths from Covid-19 as cities and states across the country moved to tighten restrictions on gatherings and economic life to stop their health systems from being overwhelmed.

The number of people hospitalized with the virus rose to a new record high of over 79,000, while the death count hit its highest since early May.

New York City is to close its public schools from today, a measure that, when applied in the first wave of lockdowns, did more than most to hit economic activity.

There was slightly better news from Europe, where the hospitalization count in France fell sharply.

2. Jobless claims, regional Fed surveys due

The surge in Covid-19 cases and the corresponding pressure on the leisure and hospitality sector, in particular, may be reflected in the week’s jobless claims data, which are due at 8:30 AM ET (1330 GMT). Initial claims are expected to be largely unchanged at 707,000, having registered a post-pandemic low of 709,000 last week.

 The Philadelphia Federal Reserve’s monthly business survey is due at the same time, while the Kansas City Fed’s comes out at 11 AM ET.

In between the two will be existing home sales data for October. These had hit a 14-year high in September as the pandemic triggered a rush for the suburbs by city-dwellers.

3 Stocks set to open lower on Covid concerns

U.S. stock markets are set to extend Wednesday’s losses when they open later, on fears that the current wave of Covid-19 cases will weigh heavily on output in the final quarter of the year.

By 6:30 AM ET, Dow Jones Futures were down 128 points, or 0.4%, while S&P 500 Futures were also down 0.4% and NASDAQ Futures were down 0.5%, hit slightly by an underwhelming outlook given by chipmaker Nvidia after the close on Thursday.

Nvidia (NASDAQ: NVDA ) lived up to expectations with a strong quarter driven by demand from data centers and videogamers, very much in line with the narrative that has fueled a big rally in its stock this year. However, questions remain around its planned $40 billion acquisition of U.K.-based ARM Holdings (LON: ARM ) from Softbank (OTC: SFTBY ), a deal seen by many as expensive.

4. You want interest rates? We got interest rates!

The Central Bank of Turkey raised its key one-week borrowing rate by 475 basis points, as its new governor acted to shore up the world’s worst-performing currency among the big emerging markets this year.

The lira, which had tumbled to record lows against the dollar in early November, rose 1.0% to 7.693 in response. It had peaked at nearly 8.58 two weeks ago.

Other central banks were, however, adding to the recent trend of further policy loosening. Indonesia cut its key rate to a new record low. The move pushed the dollar 0.8% higher against the rupiah, which is still up over 3% on the month against a generally weak greenback.

The South African Reserve Bank will also announce the results of its latest policy meeting at 8 AM ET (1300 GMT).

5. Oil dips amid UAE chatter

Crude oil prices slipped again on fears for the future of global demand as the coronavirus tightened its grip on the northern hemisphere. Aside from the U.S., Russia also reported a record high rate of daily infections, while the death rate reached its highest since spring in the U.K.  In Germany, the daily infection rate stuck stubbornly above 22,000.

By 6:30 AM, U.S. Crude futures were down 1.2% at $41.53 a barrel, while Brent futures were down 0.6% at $44.08 a barrel.

Market sentiment wasn’t helped by chatter that the United Arab Emirates is contemplating abandoning the OPEC+ bloc in protest at its low production quota. While the UAE is unlikely to take such a step, the reports indicated the depth of its unhappiness at the current arrangements and are a hint as to where the problems in agreeing a production policy for 2021 may lie.

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