Wall Street headed for muted start

“Lukewarm” is the watchword for global markets today and in keeping with that mood US stocks are set for a tepid start. Spread betting quotes suggest the Dow Jones Industrial Average will open barely changed while the S&P 500 will eke out a four-point gain at 3,584. The NASDAQ Composite is set to provide a bit of va-va-voom, with a 112 point advance to 12,017. “The end of the Trump regime appears to be as anarchic and dysfunctional as it was during its heyday. In a rare rift between the two, the US Treasury and Fed openly disagreed over the end of pandemic assistance programs,” said Neil Wilson at martkets.com. “Treasury Secretary Steve Mnuchin called on Fed chair Jay Powell to extend four lending programs by 90 days but demanded a scheduled end to five other lending programs and the Fed hand back some US$455bn in unused funds for use elsewhere. The Fed said no, explaining it ‘would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy’. Atlanta Fed President Raphael Bostic told Bloomberg these tools are an important backstop and have restored market confidence,” Wilson added. Meanwhile, “Covid cases continue to rip through the US, prompting new restrictions, including a 10pm curfew in California,” Wilson noted. The ever-useful daily COVID-19 report from Pantheon Macroeconomics notes that a record 188,000 coronavirus cases were reported in the US yesterday and today is likely to be the first day with 200,000 cases reported. As Pantheon’s chief economist, Ian Shepherdson, was quick to point out, that is just 19 days after the first day when more than 100,000 cases were reported. “Behind the headlines, though, the rate of increase of new cases has slowed sharply in recent days, and hospitalizations are starting to follow. Both are still increasing rapidly, but not as rapidly as before,” Shepherdson observed, before adding a caution about the potential for the Thanksgiving holiday to spark a new upsurge in cases. Shepherdson points to the experience in the UK, where there was a brief surge in cases, “triggered by the leaking of the November 5 lockdown six days in advance, on a Friday”. “People rushed to socialize during the interregnum, and cases duly rose,” Shepherdson said. Three things to watch for on Friday: The earnings calendar is looking a little sparse for the end of the week, however third quarter figures from shoe seller Foot Locker Inc (NYSE:FL) may provide interest for some investors Share price reaction may also be eyed from Pfizer Inc (NYSE:PFS) as the pharma firm said it will apply for emergency use authorization (EUA) to the Food and Drug Administration (FDA) for its COVID-19 vaccine developed with BioNTech Political fireworks may also be in the offing after US Treasury Secretary Steven Mnuchin said that he will not support the extension of an emergency lending program for small and medium sized businesses beyond the end of the year despite objections from the Federal Reserve