Stock market starts week off on the left foot as US sees record increase in COVID-19 cases

Wall Street is set to open the week lower judging by the futures on the three benchmark indexes in early trading on Monday. This is the last trading week ahead of the election, and investors may take profits and turn to the wait-and-see mode.

Besides this, the US saw a record surge in COVID infections on Friday and on the weekend. White House chief of staff Mark Meadow said yesterday that the country would not get control of the coronavirus pandemic.

At the time of writing, S&P 500 futures are down 0.66%, Nasdaq futures have dropped 0.45%, and Dow futures have declined by 0.68%. This week is the last week of the month, during which the stock markets have gained over 2%.

One week before Election Day, Democratic candidate Joe Biden maintains a considerable lead over current President Donald Trump in polls, though the gap has narrowed.

Later this week, Apple, Amazon, Alphabet, Facebook, and Boeing will release their quarterly reports, while the US will release GDP data for the third quarter. Analysts expect data on Thursday to show US GDP surged by over 31% in the third quarter, led by consumer spending.

In Asia, shares are mostly bearish amid surging COVID cases in the US and Europe. Spain announced a state of emergency.

At the time of writing, China’s Shanghai Composite has slumped 1.23%, while the Shenzhen Component is up 0.35%. Chinese leaders are meeting this week to set plans for the next five years. The current meeting of leaders of the ruling Communist Party comes amid Sino-US tensions and a pandemic that started in China. Economists expect China to become the world’s largest economy in the next few years.

Japan’s Nikkei 225 has dropped 0.13%, and South Korea’s KOSPI is down 0.55%.

Lee Kun-hee, who turned Samsung Electronics into a global leader in smartphones and electronics, died yesterday at 78. He has spent about six years in the hospital following a heart attack. Lee was the richest person in South Korea and has made Samsung a global behemoth to the point when the company accounted for over 17% of the country’s GDP. However, he was also charged with tax evasion, bribery, and dubious transfers. His son, Lee Jae-yong, is formally taking the helm, though he has been de facto ruling the company since 2014. Samsung shares increased slightly on the news as investors expect major changes in a period when the company struggles to evolve.

Markets in Hong Kong and New Zealand are closed for holidays.

In Australia, the ASX 200 closed 0.18% lower.

Coca-Cola European Partners plans to acquire Australia's Coca-Cola Amatil, which would become the largest acquisition of an Australian company.

In the commodity market, oil prices have tumbled by over 2% on the news that the US saw a record number of coronavirus cases, while the pandemic is worsening in Europe as well. A recent report from the World Bank said that lower oil demand might persist beyond 2021 due to the effect of the pandemic. WTI is now trading near $39, and Brent is fluctuating at around $41.

Gold is also declining as it can’t leverage its safe-haven status. The metal has just broken below the $1,900 mark.

In FX, the US dollar is trying to recover losses incurred last week. At the time of writing, the USD Index is up 0.18% to 92.933. The greenback is bullish on investors’ cautious mood amid surging COVID cases and no progress in stimulus negotiations. EUR/USD has declined by 0.22% to 1.1835.

The pound has declined against the US dollar but rose in pair with the euro as the UK and the EU have extended talks on a potential post-Brexit trade deal.

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