Stocks higher today on vaccine optimism

Stocks higher today on vaccine optimism 150 150 Realm

European stocks and U.S. futures are higher today after biotech firm Moderna announced positive news regarding its trial of a potental coronavirus vaccine saying it produced a “robust” immune response.


Global Macro

  • Annual inflation rate in the US increased to 0.6% in June of 2020 from May’s four-and-a-half-year low of 0.1% and matching market forecasts. It is the highest reading in three months as businesses reopened after the coronavirus lockdown. Food inflation accelerated to 4.5% (vs 4% in May), the strongest since December of 2011, with food at home prices jumping 5.6% (vs 4.8%. Prices also increased faster for medical care services (6% vs 5.9%).
  • The NFIB Business Optimism Index in the United States increased to 100.6 points in June of 2020 from 94.4 points in May of 2020. It is the highest reading since February, before the coronavirus crisis. The outlook for general business conditions over the next six months improved five points to 39 and the percentage of owners thinking it’s a good time to expand improved eight points to 13%.
  • The ZEW Indicator of Economic Sentiment for the Euro Area increased by 1 point from the previous month to 59.6 in July of 2020, the highest reading since May 2015. In July, 69.7% of the surveyed analysts predicted an improvement in economic activity, while 10.1% expected it to deteriorate and 20.2% expected no changes. Meantime, the indicator of the current economic situation edged up by 0.9 points to -88.7 and inflation expectations rose by 5.4 points to 7.5.
  • Industrial production in the Euro Area dropped 20.9% from a year earlier in May 2020, following an upwardly revised record 28.7 plunge in the previous month and compared with market expectations of a 20% slump. It was the third consecutive decline in industrial output, amid the coronavirus crisis. Production of capital goods fell by 28.4%, durable consumer goods by 24%, intermediate goods by 19.7%, non-durable consumer goods by 14.4% and energy by 10.3%. Among the bloc’s largest economies, production went down in France (-24%), Germany (-23.1%), and Italy (-20.3%).
  • Britain’s gross domestic product tumbled 24.0% from a year earlier in May 2020, easing from a record 25.3% contraction in April and compared to market expectations of a 20.4% decline. Services output fell 23.6% (vs -24.2% in April), production declined 20.0% (vs -23.8% in April) and construction dropped 39.7% (vs -44.2% in April).
  • Exports from China unexpectedly increased by 0.5% year-on-year to USD 213.57 billion in June 2020, after a 3.3% fall in the previous month and defying market expectations of a 1.5% drop, as global demand started to improve after more countries lifted coronavirus-led lockdown restrictions and social distancing measures. Demand for virus-related medical products, such as face masks and pe₹ onal protective equipment, has helped China sell more products ove₹ eas. In contrast, exports of refined products declined 28.6%; those of unwrought aluminium and products were down 30%; and steel fell 30.3%.
  • On Tuesday: European stocks fell sharply, bonds climbed and the dollar rose on safe-haven demand as simmering Sino-U.S. tensions and worries about the state of California shutting down dented investor’s appetite for risk. Asian stocks ended mostly lower as global coronavirus cases topped 13 million and the WHO warned the pandemic could get far worse if countries around the world do not follow basic healthcare precautions. US stocks Following the sharp pullback seen in afternoon trading on Monday, stocks showed a significant move back to the upside during trading on Tuesday. The Dow showed a particularly strong upward move, reaching its best closing level in a month.
  • Tuesday’s data below:

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