Stocks are flat this morning appearing to shrug off news that the global coronavirus death toll is now above 500,000.
- Markets will continue to monitor the impact of the pandemic on the economy amid signs of second waves of infections. In the US, in the spotlight will be Fed Powell’s testimony to the House, FOMC policy meeting minutes, jobs report, factory orders and foreign trade. Elsewhere, investors will focus on UK final GDP figures and consumer morale; Eurozone inflation and business survey; Japan’s tankan quarterly survey and industrial output; Australia trade balance and retail sales; and worldwide manufacturing and service sector PMI surveys for June.
- Profits earned by China’s industrial firms tumbled by 19.3% yoy to CNY 1.84 trillion in January-May 2020, compared to a 27.4% slump in January-April period, as China’s economy gradually recovers from the coronavirus crisis. In May alone, industrial profits jumped 6.0% yoy to CNY 582.34 billion, recovering from a 4.3% fall in April, as production and sales rebounded amid more countries eased COVID-19 restriction lockdowns.
- Personal spending in the US increased at a record high 8.2% month-over-month in May of 2020, following a downwardly revised 12.6% fall in April which was the biggest drop on record due to the coronavirus pandemic. Figures came below market forecasts of a 9% rise. The data was impacted by the response to the spread of COVID-19. Federal economic recovery payments continued but were at a lower level than in April, and government “stay-at-home” orders were partially lifted in May. Real personal spending went up 8.1%. Within goods, spending on motor vehicles and parts as well as recreational goods and vehicles were the leading contributors to the increase. Within services, the largest contributors were spending for health care as well as food services and accommodations.
- The University of Michigan’s consumer sentiment for the US was revised down to 78.1 in June of 2020 from a preliminary of 78.9 and compared to 72.3 in May. The current economic conditions subindex fell to 87.1 from an initial estimate of 87.8 and the expectations gauge to 72.3 from an initial 73.1. Inflation expectations for the year ahead were unchanged at 3% and the five year outlook was revised lower to 2.5% from 2.6%. Consumer sentiment slipped in the last half of June, although it still recorded its second monthly gain over the April low. While most consumers believe that economic conditions could hardly worsen from the recent shutdown of the national economy, prospective growth in the economy is more closely tied to progress against the coronavirus.
- On Friday: European stocks retreated after showing some strength earlier in the session on Friday, and ended the session on a weak note amid rising worries about sharp spikes in new coronavirus cases in the U.S. US stocks ended on a highly negative note after spending the entire session in the red as investors turned cautious and chose to exit counter following a sharp surge in new coronavirus infections in several states. Asian stocks rose after U.S. regulators eased bank rules that will free up billions of capital. The news helped offset worries about a continued surge in coronavirus cases in the United States.
- Friday’s data below:
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