Travel stocks lead losses this morning

Travel stocks lead losses this morning 150 150 Realm

Asian stocks were higher after data showed China’s economy is bouncing back. European markets though are struggling to make gains this morning with travel stocks leading the losses after the UK introduced quarantine measures on travelers returning from Spain.

Global Macro

  • The US earnings season continues this week, with companies such as Alphabet, Apple, Amazon, Facebook, P&G, Pfizer and Gilead Sciences reporting their Q2 results. Meanwhile, the Fed’s monetary policy meeting will be keenly watched as well as GDP data for the US, Eurozone, Hong Kong and Taiwan, and PMI survey for China. Other releases include US personal income and outlays and durable goods orders; Eurozone business survey and inflation; Japan consumer confidence, retail trade and industrial output; and Australia inflation data.
  • The IHS Markit US Services PMI rose to 49.6 in July 2020 from 47.9 in the previous month, missing market consensus of 51.0, a preliminary estimate showed. The latest reading pointed to the sixth month of contraction in the US service sector as a resurgence in COVID-19 cases forced many states to re-impose lockdown measures. New business fell at a slightly quicker rate, while pressure on capacity led to a slight increase in workforce numbers. On the price front, input cost inflation edged higher as supplier prices were hiked, especially for sanitizing products, while selling prices increased the most since October 2018. Looking ahead, business confidence continued to improve among service providers amid hopes of an end to the pandemic.
  • The IHS Markit/CIPS UK Services PMI jumped to 56.6 in July 2020 from the previous month’s 47.1 and well above market expectations of 51.5, a preliminary estimate showed. The latest reading signaled the fastest pace of expansion in the sector since July 2015 as many businesses continued to reopen following the COVID-19 lockdown. New orders returned to growth, while there were also reports that initial levels of demand had been weaker-than-expected. Meanwhile, employment continued to fall amid concerns about the speed of recovery, as well as a strong upturn in non-staff costs.
  • The IHS Markit Eurozone Composite PMI increased to a 25-month high of 54.8 in July 2020 from 48.5 in the previous month, comfortably above market expectations of 51.1, a preliminary estimate showed. Both manufacturing and services returned to growth as more businesses reopened following the coronavirus lockdown. New orders rose for the first time since February and to an extent not seen since October 2018, while employment declined for a fifth month in a row. On the price front, average prices charged for goods and services dropped at a slower pace. Looking ahead, expectations of future output improved further from March’s low.
  • The IHS Markit Eurozone Services PMI rose to 55.1 in July 2020 from 48.3 in the previous month, easily beating market consensus of 51.0, a preliminary estimate showed. The latest reading signaled the steepest month of expansion in the sector since June 2018 as economies continued to reopen after lockdowns implemented to curb the spread of COVID-19. New business returned to growth despite a continued fall in exports, while employment fell for a fifth straight month and at a sharp pace. Looking ahead, expectations of future output continued to improve from March’s record low.
  • On Friday: European stocks ended notably lower on Friday as rising tensions between the U.S. and China and worries about global economic outlook due to the impact of the coronavirus pandemic triggered fairly heavy selling at several counters from across various sectors. Asian stocks fell on Friday as disappointing U.S. employment data as well as concerns about rising U.S.-China tensions added to worries about the spread of the coronavirus. US stocks fluctuated after an initial move to the downside but maintained a negative bias throughout the trading session on Friday. With the drop on the day, the major averages extended the sharp pullback seen in afternoon trading on Thursday.
  • Friday’s data below:

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