Markets make U-Turn

US markets finished the week lower Friday, snapping a three-day winning streak, amid confusion over prospects for a near-term resolution to the protracted U.S.-China trade spat. The Dow Jones Industrial Average lost 109.91 points, or 0.4%, to 25,270.83, the S&P 500 index fell 17.31 points, or 0.6%, to 2,723.06, while the Nasdaq Composite Index declined 77.06 points, or 1%, to 7,356.99.

European markets meanwhile, closed with gains and ended higher on Friday as investors continued building confidence on the strong November start seen this week. The Stoxx Europe 600 finished up 0.3% to 364.08, building on Thursday’s gains, Germany’s DAX 30 climbed 0.4% to 11,518.99 at market close, while France’s CAC 40 finished 0.3% higher at 5,102.13.

The week ahead

Economic Calendar

Midterm elections in the US and the Federal Reserve’s November meeting will take centre stage this week, with Voters in the US heading to the ballot box on Tuesday to decide key races in Congress and state governments and the Federal Reserve beginning its two-day meeting Wednesday. Policymakers at the central bank are not expected to adjust their benchmark short-term interest rate, although a rate rise is seen as likely in December. Fed Chairman Jay Powell will not hold a press conference at the conclusion of the meeting.

The European Commission will release new economic forecasts for the region on Thursday. Investors will be watching for any gap between estimates from Brussels and the Italian government, which is wrestling with the European Union over its budget plan. Investors will also be keeping an eye out for first looks on the UK’s third-quarter GDP growth which will be announced Friday.

Corporate Calendar

More than 70 companies in the S&P 500 are scheduled to report quarterly financial results this week as earnings season continues. Some names to watch will be BMW AG and Qualcomm Inc, both due to release their numbers on Wednesday, and Media Giant – Walt Disney, which will be reporting its latest quarterly results after U.S. markets close on Thursday.

Thus far, 74 per cent of S&P 500 companies have reported earnings, and 78 per cent have beaten expectations. Earnings reports this season have been impressive and yet U.S. stocks have fallen.