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TALKING COVID ... AGAIN, AND CONSUMER SPENDING (1100 EST/1600 GMT)
With leaves swirling in colder temperatures on the U.S. East Coast and Austria becoming the first country in western Europe to reimpose a full COVID-19 lockdown while neighboring Germany is warning it may follow suit, economists and market watchers are turning their focus to the pandemic yet again. read more
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In a report looking at COVID and consumer spending, JPMorgan economists Peter McCrory, Jesse Edgerton and Daniel Silver note that following a period of sustained decline in U.S. cases, the numbers have begun rising modestly in recent weeks, though thankfully, with nothing like the 2020 winter surge so far.
They see little evidence of a slowdown in broader U.S. consumer spending, with indicators including the October retail sales report and Chase card spending so far in November pointing to strong consumer demand.
But they also point to state-level evidence suggesting "rising cases are starting to slow consumer spending." If cases rise further they "expect consumer spending will moderate even more."
A modest U.S. case increase is masking considerable geographic variation, according to report. It cites cases rising by more than 50% in the last three weeks in Arizona, Indiana, Minnesota, Nebraska and New Mexico, while other states, harder hit by the Delta variant in the summer, are seeing cases fall by more than a third. These states are South Carolina, Georgia, Oklahoma, Alabama, Mississippi, Arkansas and Idaho.
In the past three weeks, states with rising cases have had slower consumer spending growth and states with the sharpest case decline have tended toward the fastest consumer spending pace.
The case growth and spending relationship is similar to the summer's Delta surge, they say, noting that in the last three weeks, each additional doubling in COVID-19 cases is associated with a 1.8%-pt decline in overall state-level spending.
At this time last year, when cases were increasing sharply and consumer spending was flagging they found that each doubling of COVID-19 was associated with a 2.2%-pt decline in state-level consumer spending.
In stocks, energy was the biggest percentage decliner while oil prices were slumping on Friday on the resurgent European COVID fears. read more
But please don't say deja-vu all over again.
(Sinéad Carew)
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BULLS TAKE BREATHER AT SUMMIT OF WALL STREET'S RECORD HIGHS (1020 EST/1520 GMT)
With Wall Street bouncing along record highs, third-quarter reporting season winding down, and the Fed's finger hovering over the taper button, investors have a lot to chew on.
The bulls have backed down, the bears inched forward and the neutrals - the Switzerland of sentiment - rose to the highest level in six weeks, according to the American Association of Independent Investors' (AAII) latest weekly survey of investor sentiment.
Bulls - who expect stocks to rise over the next six months - shed 9.3 percentage points to 38.8% while remaining above their 38% historical average for the fifth straight week.
And bearish pessimists added 3.2 ppts to their pie slice, but at 27.2% of the total, are still below their long-term average of 30.5%.
Neutral sentiment - the belief that stocks will remain essentially unchanged in the coming half-year - jumped by 5.9 ppts to 33.9%, leap-frogging their 31.5% historical average.
Wall Street's spate of record highs is being greeted with differing reaction amongst AAII's survey participants, who were asked whether they think those new highs are warranted.
The "unwarranted" camp won the vote at 44%.
"At some point, reality will set in and the correction that is long overdue will occur," says one respondent. "Depending upon how the Federal Reserve responds could turn the correction into a recession."
"It's not if, but when."
Still, 42% believe current levels are appropriate, with one participant saying "earnings and company profits continue to beat estimates on a regular basis."
(Stephen Culp)
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S&P 500 E-MINIS SLIP; EUROPEAN COVID CASES RISE (0900 EST/1400 GMT)
S&P 500 and Dow index futures are lower early on Friday, with coronavirus cases in Europe rising and hitting shares of travel-sensitive stocks.
Nasdaq index futures are up, however, a day after the index (.IXIC) registered a record closing high. The S&P 500 (.SPX) notched a record high close as well on Thursday.
As of Thursday's close, the S&P and the Nasdaq were both on course to post gains for the week, while the blue-chip Dow was on track to post its second straight weekly loss.
Airline shares including Delta Air Lines (DAL.N), United Airlines (UAL.O) and American Airlines (AAL.O) are lower in premarket trading.
Investors await news of progress on President Joe Biden's $1.75 trillion social programs and climate change investment bill. The U.S. House of Representatives early on Friday put off an anticipated vote on passage of the bill amid Republican delaying tactics. read more
House Democratic leaders said the House instead will reconvene at 8 a.m. EST (1300 GMT) to complete the legislation.
Here is the U.S. morning market snapshot:
(Caroline Valetkevitch)
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FOR FRIDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE: read more
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