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Fast Food, Unemployment, Oil Stockpiles: 3 Things to Watch

·3 mins read

By Liz Moyer

Investing.com -- Stocks dropped for a second day in a row after the Treasury Secretary threw cold water on hopes for a stimulus agreement before the election.

According to Steven Mnuchin, the two sides are still far apart on some issues. Republicans offered a $1.8 trillion deal while Democrats, led by House Speaker Nancy Pelosi, have resisted, saying it doesn’t go far enough. The Democrats’ own package is around $2.2 trillion.

It was a reversal of gains notched earlier in the day on positive earnings reports from some of the biggest U.S. banks. Big tech faltered, tracking declines by Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Netflix Inc (NASDAQ:NFLX). McDonald’s Corporation (NYSE:MCD) shares touched a 52-week high as the return to restaurants after Covid lockdowns helped boost sales. Shipping company FedEx (NYSE:FDX) also hit a 52-week high.

Data are due out on jobs and oil inventories, a closely watched measure of demand that traders use to judge the strength of the economic recovery.

Here are three things that could affect the markets tomorrow.

1. Another pandemic winner?

Over the last few weeks, a long list of pandemic winners and losers has been revealed, as consumers continue to shop online and order restaurant food even if they aren't traveling and staying in hotels. Restaurants were hard hit during the Covid lockdowns, but the third quarter showed that at least some of them are on the rebound, even as the threat of future lockdowns looms large in new Covid hotspots.

Shares of fast food giant McDonalds hit a 52-week high of $227.82 on Wednesday. Last week, the hamburger and fries seller said third quarter comparable sales were stronger than expected, falling just 2.2%. It also cited strong average check growth.

On Wednesday, rival Restaurant Brands International Inc (NYSE:QSR) International, said comparable sales at Burger King are seen falling 7% for the quarter, though that is an improvement from the 13% decline in the prior quarter.

2. Another reading on employment trends

Thursday is jobs day every week as the government releases the latest data on new unemployment claims. Initial claims, which will be released at 8:30 AM ET (1230 GMT) are expected to be 825,000, down slightly from the 840,000 reported for the previous week. Continuing claims are expected to be 10.7 million, also down slightly from 10.9 million the prior week.

3. A fresh reading on oil demand after a hurricane

After a one-day holiday delay, the Energy Information Administration will release its weekly crude oil inventory numbers at 11:00 AM ET (1500 GMT) on Thursday. Analysts tracked by Investing.com expect stockpiles to fall by 2.8 million barrels after a 500,000 barrel build the prior week. Declining crude stocks could indicate increased demand, though last week production was interrupted by a hurricane hitting the U.S. Gulf coast.

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