Better than forecast German inflation and US GDP numbers steadied markets overnight. US stocks rose, but Europe finished flat after the European Central Bank declined to add to its stimulus program. Oil markets slumped again as rising infection rates dimmed the demand outlook.
Bond markets diverged. European bonds rallied, despite disappointment that the ECB didn’t announce the anticipated 500 billion Euro extension of its liquidity operations. Investors appeared to take comfort from strong hints the program will be extended in December. US bonds sold off after President Trump promised a large fiscal stimulus package on re-election, and the lift in real interest rates saw the US dollar rise.
Twitter, Apple, Amazon and Alphabet all reported after the closing bell. While all exceeded earnings forecasts, there is cause for caution. Twitter subscriber growth disappointed, and its shares tumbled more than 15% in aftermarket trading. Nasdaq futures fell more than 160 points after the releases.
Asia Pacific investors are looking at some relief after a tough week. Futures point to modest gains in Hong Kong and Australia, and a flat start in Japan ahead of the release of industrial production, inflation and housing data today. Hong Kong will release GDPO data after market.