© Reuters By Geoffrey Smith
Investing.com — President Donald Trump calls off the stimulus talks, the House of Representatives damns Big Tech for abusing their market dominance, and stocks are only bouncing weekly from Monday’s slide. Here’s what you need to know in financial markets on Wednesday, October 7th.
1. Trump nixes stimulus talks
President Donald Trump abruptly called off talks with House Democrats on a fresh stimulus package, saying that the Democrats’ demands included too much money for what he called badly run state and city governments.
Trump promised a fresh stimulus package after the November elections. His ability to deliver that, however, will depend on the Republicans regaining control of the House of Representatives, which neither opinion polls nor prediction markets expect.
Trump’s move came on the same day that Federal Reserve Chairman Jerome Powell made what analysts said was his strongest plea yet for more support for the economy from fiscal policy.
Vice-presidential candidates Mike Pence and Kamala Harris will hold their only debate after the market close.
2. House damns Big Tech monopolies
A House of Representatives report concluded that the big technology companies who dominate the Internet with their consumer-facing platforms have all abused their market power, and recommended that they be forced into a radical restructuring of their businesses.
House Republicans said they didn’t share the report’s conclusions but repeated their criticism of the companies’ perceived bias against conservative views.
The report could be a foretaste of a much tougher line against the likes of Amazon (NASDAQ:), Apple (NASDAQ:), Facebook (NASDAQ:) and Alphabet (NASDAQ:) after the elections, especially if the White House and Senate also swing to the Democratic Party. It comes at a time when smaller companies appear increasingly emboldened to sue Big Tech for anti-competitive behavior, most notably in Fortnite owner Epic’s action against what it perceives as price-gouging through its App store.
3. Stocks set to bounce weakly
U.S. stock markets are set to open with a bounce after the sharp reversal that followed Trump’s announcement late in the session on Monday.
By 6:15 AM ET, were up 170 points, or 0.6%, recouping just under half of Monday’s losses. The contract was up 0.5% and , which underperformed on Monday, were continuing that underperformance so far with a gain of only 0.4%.
Aside from the Big Tech stocks, companies likely to be in focus on Wednesday include the airlines, for whom President Trump is still trying to carve out $25 billion in additional aid, in a bid to forestall over 30,000 job cuts announced in recent weeks by the struggling companies.
There’ll also be interest in Boeing (NYSE:), after it cut its forecasts for global jet demand by 11%, and in General Electric (NYSE:), after the company landed in trouble with securities regulators for accounting practises at its insurance unit.
4. Europe’s shaky recovery
Europe’s economic recovery totters on, a day after being called ‘shaky’ by European Central Bank President Christine Lagarde. Lagarde’s comments were interpreted as readying the market for fresh stimulus from the ECB at its December meeting.
, the heart of the Eurozone economy, surprisingly fell 0.2% in August, defying hopes for a 1.5% increase. The numbers are best viewed together with factory orders data, which exceeded expectations on Monday. Spain’s drop eased, meanwhile.
There was more unambiguously good news from Italy, where crept into positive territory in year-on-year terms with an 8% increase in August.
U.K. , meanwhile, rose at their fastest pace since 2016 in September, according to mortgage lender Halifax.
5. Crude falls again on Trump, API; EIA stockpiles eyed
prices fell back below $40 a barrel in response to a double-whammy from the American Petroleum Institute and President Trump. U.S. crude futures were down 2.7% at $39.58 a barrel, while futures were down 2.3% at $41.68 a barrel.
The API’s data for last week rose by just under 1 million barrels, in contrast to expectations of a drop of some 600,000 barrels. The Energy Information Administration’s are due as usual at 10:30 AM ET.
Trump’s comments, meanwhile, knocked hopes for a sustained recovery in U.S. fuel demand, especially since they came more or less immediately after Powell’s pleas for help. The lack of a stimulus package is likely to feed through directly into lower demand for jet fuel, gasoline and diesel.
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