News that an early trial of a coronavirus vaccine being developed by Pfizer and BioNTech is showing potential has lifted market sentiment this morning. At the same time investors are watching developments in Hong Kong following the introduction of China’s controversial national security law which was introduced on Tuesday.
- The ISM Manufacturing PMI for the US jumped to 52.6 in June of 2020 from 43.1 in May, recovering sharply from 43.1 in May and 41.5 in April and easily beating market expectations of 49.5. The reading pointed to the strongest expansion in factory activity since April of 2019 after three straight months of coronavirus disruptions. New orders (56.4 from 31.8), production (57.3 from 33.2) and prices (51.3 from 40.8) rebounded and employment (42.1 from 32.1) and new export orders (47.6 from 39.5) fell less.
- Germany’s retail sales surged by 13.9% month-over-month in May 2020, following an upwardly revised 6.5% drop in April and compared to market expectations of a 3.9% rise. This was the strongest growth in retail trade since the series began in February 1994, as the government continued to ease lockdown measures. Year-on-year, retail sales rose 3.8% in May, easily beating forecasts of a 3.5% fall.
- The IHS Markit Eurozone Manufacturing PMI was revised higher to a four-month high of 47.4 from a preliminary estimate of 46.9 and compared to May’s final reading of 39.4. Still, the latest survey suggested the Eurozone manufacturing sector remained in contraction territory for the past 17 months. Output and new orders declined at a softer pace as more businesses restarted operations following weeks of closure due to the coronavirus pandemic. Backlogs of work outstanding fell for a twenty-second successive month and employment dropped for a fourteenth month in a row. Purchasing activity also remained depressed. On the price front, both input costs and output charges continued to decline. Finally, confidence about production in the year ahead returned to positive territory during June.
- On Wednesday: European stocks closed mostly higher on Wednesday, reacting to fairly encouraging economic data from the euro area, China and the U.S., and positive news about a potential coronavirus vaccine. US stocks While the Nasdaq and the S&P 500 moved notably higher over the course of the trading session on Wednesday, the Dow showed a lack of direction before closing in negative territory. The advance on the day lifted the tech-heavy Nasdaq to a new record closing high. Asian stocks turned in a mixed performance on Wednesday as investors weighed rising U.S.-China political tensions against data showing that the manufacturing sector in China expanded at a faster rate in June.
- Wednesday’s data below:
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