Equities attempt a bounce back after sell-off yesterday

Equities attempt a bounce back after sell-off yesterday 981 980 Realm

Equities are attempting to bounce back after yesterday’s significant sell-off. Thursday was the worst day since March on fears of a second wave of coronavirus infection after reports showed an increase in new cases. 

 

Global Macro

  • The number of Americans filling for unemployment benefits eased to 1.542 million in the week ended June 6th, the lowest level since the coronavirus crisis began three months ago and below market expectations of 1.550 million. Still, the latest figure lifted the total reported since March 21st to 44.2 million. On a non seasonally adjusted basis, the biggest increases in jobless claims were reported in California, Massachusetts and New York, while those in Florida, Texas and Georgia dropped sharply. The 4-week moving average, which removes week-to-week volatility, eased again to 2.002 million, while continuing jobless claims decreased to 20.9 million in the week ended May 30th, well above market forecasts of 20.0 million.
  • Producer prices for final demand in the US increased 0.4% month-over-month in May of 2020, following a record 1.3% drop in April and above forecasts of a 0.1% gain. Prices of goods rose 1.6%, the largest increase ever, mainly due to a 40.4% jump in meat prices. The indexes for gasoline, processed young chickens, light motor trucks, liquefied petroleum gas, and carbon steel scrap also moved higher. In contrast, prices of services fell 0.2%, due to margins for final demand trade services, which declined 0.8%. Year-on-year, producer prices for final demand went down 0.8%, less than a 1.2% drop in April.
  • WTI crude futures fell as much as 8% to trade around $36.7 per barrel on Thursday as concerns about oversupply and falling fuel demand mounted after US Federal Reserve Chief Jerome Powell delivered a pessimistic outlook for the world’s largest economy and suggested that interest rates would remain near zero throughout 2022. In addition, data released during the week showed US crude inventories rose unexpectedly last week. Brent crude futures dropped 6% to around $39.2 a barrel.
  • Car sales in China surged 14.5% year-on-year to 2.19 million in May 2020, the second straight month of increase in auto sales, as the country loosened coronavirus-related restrictions and reopened for business. Still, sales of new energy vehicles (NEVs), which include battery-powered electric, plug-in hybrid and hydrogen fuel-cell vehicles, fell for a eleventh straight month to 82,000 units. Considering the first five months of the year, car sales plunged 22.6%, compared to a 13% drop a year earlier
  • On Thursday: European stocks tumbled to close sharply lower on fears of a second wave of coronavirus infection after reports showed an increase in new cases, and worries about a deep recession after the Federal Reserve’s most recent comments on the outlook for the U.S. economy triggered a sell-off in the region. US stocks moved sharply lower over the course of the trading session, experiencing the biggest one-day drop since March. The Nasdaq pulled back well-off yesterday’s record closing high, while the Dow and the S&P 500 closed lower for the third straight session. Asian stocks fell after the U.S. Federal Reserve projected a sharp contraction by the U.S. economy this year due to the coronavirus pandemic and warned of a “long road” to recovery.
  • Thursday’s data below:

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