Stocks flat as markets stay focused on coronavirus

Stocks flat as markets stay focused on coronavirus 981 980 Realm

Today positive economic data from the U.S. and China has been tempered by a new coronavirus spike in the the US.  This morning, Edouard Philippe, France’s Prime Minister, has resigned.



Global Macro

  • The US economy added 4.8 million jobs in June, more than market expectations and a new record high as more businesses reopened after the coronavirus lockdown. It is the second straight month of employment gains after a record 20.8 million job losses in April. Meanwhile, the unemployment rate declined to 11.1%, easing further from an all-time high of 14.7% reached in April.
  • New orders for US manufactured goods rose by 8.0% from a month earlier in May 2020, partially recovering from a record 13.5% tumble in April and missing market expectations of an 8.9% growth, as several states gradually lifted coronavirus restrictions. Demand for transport equipment jumped 82.0% (vs -48.9% in April) led by vehicles and defense aircraft.
  • Imports to the United States fell by USD 1.8 billion from the previous month to USD 199.1 billion in May 2020, the lowest level since July 2010, as the coronavirus pandemic led to a fall in domestic demand. Goods purchases decreased by USD 1.3 billion led by a USD 4.4 billion slump in imports of automotive vehicles, parts, and engines and a USD 0.6 billion drop in purchases of capital goods such as computers.
  • Exports from the United States dropped by USD 6.6 billion from the previous month to USD 144.5 billion in May 2020, the lowest level since November 2009, as the COVID-19 crisis continued to curb global demand. Goods sales declined by USD 5.5 billion led by industrial supplies and materials (down USD 3.9 billion), in particular crude, fuel oil and other petroleum products, and capital goods (down USD 0.9 billion) such as semiconductors and computer accessories. Also, exports of services were down USD 1.1 billion, due to financial and other business services as well as charges for the use of intellectual property.
  • The Euro Area seasonally-adjusted unemployment rate edged up to 7.4% in May 2020, remaining close to March’s record low of 7.1% and below market expectations of 7.7%, as the governments’ measures to protect jobs during the coronavirus crises along with an increase in the number of inactive people due to the coronavirus crisis have been supporting the labor market. The number of unemployed persons increased by 159 thousand to 12.146 million, with most countries across the bloc remaining under COVID-19 containment measures.
  • On Thursday: 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.
  • Thursday’s data below:

Disclaimer:  ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy. This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.