• S&P 500 Futures drop for the eighth consecutive day as bears eye 3,400.
  • Hopes of US stimulus fade, Russia/Iran meddle in the American presidential election.
  • COVID-19 woes join doubts over soft Brexit to challenge the earlier risk-on mood.

S&P 500 Futures stay heavy around 3,413, down 0.55% intraday, during Thursday’s Asian session. In doing so, the risk barometer nears the fortnight low flashed the previous day as trade-positive catalysts step back whereas the fresh challenges to the market optimism pop-up.

Among the fears of the negative of geopolitical tension between the US and Russia as well as Iran take the front seat. As per the recent updates from the US Federal Bureau of Investigations (FBI), Iran and Russia interfered with the American presidential elections, up for the next month. This will not only strain the relations between the US and the rest two countries but will also help President Donald Trump to gain some bids in the polls. The same disappoints markets as Democrats are perceived to spend more than the Republicans if they completely wash the opposition in the US elections.

Second, to that, the receding expectations concerning the much-awaited American coronavirus (COVID-19) aid package also challenge the market’s mood. Although US House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows sound optimistic in their latest comments, US Senate Majority Leader Mitch McConnell hasn’t approved of Trump’s push for early relief before the elections.

It’s worth mentioning that the COVID-19 woes are getting stronger outside the epicenter Europe during its second wave. The latest update suggests more than half of the US states register monthly record in the new cases whereas Australia’s Victoria also marked five new numbers of the pandemic while breaking the 14-day average.

Furthermore, wide differences between the UK and the European Union (EU) over thorny issues like fisheries, level playing field and governance are also likely to challenge the market optimism backed by the recent resumption of the Brexit talks.

Not only the US stock futures but stocks in Asia-Pacific are also downbeat, though marking lesser than 1.0% loss, while the US 10-year Treasury yields halt their run-up beyond 0.80% at the time of writing.

Looking forward, traders will pay close attention to the virus updates and stimulus news for fresh direction whereas political news can also offer additional information for the near-term trade direction.

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2020-10-22