By Geoffrey Smith
Investing.com — Stocks are set to drop for a fourth straight week, durable goods orders are likely to offer little support. Amazon (NASDAQ:)’s getting into Cloud-based gaming; Apple (NASDAQ:)’s tax agony in the EU drags on; Italy’s doing better with Covid-19 second time around and the Republican Party promises an orderly transition of power after November. Here’s what you need to know in financial markets on Friday, September 25th.
1. Stocks on course for 4th weekly drop
U.S. stock markets are set to open lower again after a modest bounce on Thursday, as fears for the economic outlook keep equities on course for a fourth straight week of losses.
By 6:45 AM ET (1045 GMT), were down 200 points or 0.8%, while the contract was down 0.7% and were down 0.6%.
Stocks likely to be in focus later include Costco (NASDAQ:), which reported better-than-expected earnings after the closing bell on Thursday, helped by renewed evidence of stockpiling by consumers anticipating a return to more restrictive public health measures to contain the coronavirus.
2. Durable goods due, Italian business confidence surprises
U.S. durable goods orders for August dominate an otherwise largely empty data calendar. Core durable goods, which strips out volatile and ‘lumpy’ elements such as aircraft, are expected to have risen 1.2% from July, a further slowdown from an initially strong recovery in the summer.
Paul Donovan, chief economist with UBS Global Wealth Management, noted that while the trend to working from home is likely to support purchases of durables for some time – especially office-related equipment – it also depresses business investment in comparable items, leaving the aggregate data little changed.
In Europe overnight, Italy rounded off a week of business confidence surveys with a surprisingly strong reading, reinforcing the impression that it is dealing with the second wave of the coronavirus far better than it dealt with the first.
3. Amazon launches Cloud gaming service
Amazon followed Microsoft (NASDAQ:) in unveiling a Cloud-based gaming subscription service, in further evidence of the tech giants pitching for more business from consumers stuck at home.
The service, to be called Luna, will debut on Thursday for a price of $ 5.99 a month and an option to buy a controller for $ 50. Earlier this week, Microsoft had agreed to pay $ 7.5 billion for ZeniMax media, the owners of videogame publisher Bethesda Softworks.
The service was one of a handful of new products and services presented by Amazon at a corporate event on Thursday. Other items announced included new speakers and security-related devices.
However, there was no sign of Amazon entering the market for connected exercise devices, rumors of which had hit Peloton Interactive (NASDAQ:) shares earlier in the week.
4. Republicans promise orderly transition
Senior Republicans promised an orderly transition of power after the elections in November, a day after President Donald Trump refused to make such a commitment on fears of electoral fraud.
Senate Leader Mitch McConnell tweeted that there would be an “orderly transition just as there has been every four years since 1792,” the year of George Washington’s re-election.
Trump’s concerns about abuse of mail-in ballots were batted away on Thursday by FBI director Christopher Wray, who was appointed by Trump himself. Wray told the Senate Homeland Security Committee that ““We have not seen, historically, any kind of co-ordinated national voter fraud effort in a major election, whether it’s by mail or otherwise.”
5. EU appeals Apple court ruling
Apple’s tax dispute with the European Union is set to continue, possibly for a year or more. The EU Commission said on Friday it will appeal a ruling by the European Court of Justice.
The ECJ earlier this year had struck down an order by the Commission to Apple to pay back some $ 15 billion in taxes to Ireland on the grounds that the tax agreement between the two broke EU antitrust law.
Apple (NASDAQ:) stock was down 0.2% in premarket