Market Report 22nd May 2020

Market Report 22nd May 2020 981 980 Realm

Stocks trade lower this morning as relations between the U.S. and China become further strained.

 

  • On Thursday: European stocks ended lower as investors refrained from making significant purchases, and instead, trimmed down positions due to weak euro zone economic data.
  • US stocks showed a lack of direction early in the trading day but moved mostly lower over the course of the session. The pullback on the day partly offset the strong gains posted in the previous session.
  • Asian stocks fell broadly as fears of U.S.-China tensions as well as deteriorating relations between Canberra and Beijing kept investors’ risk appetite in check.

Global Macro

  • The IHS Markit US Composite PMI increased to 36.4 in May 2020 from the previous month’s record low of 27.0, still indicating the second-sharpest decline in business activity since the series began in late-2009 as the economy began to reopen. New business and employment fell at the second-fastest rates in the series history, with foreign client demand remaining especially muted.
  • The number of Americans filling for unemployment benefits eased to 2.438 million in the week ended May 16th, the lowest level since the coronavirus crisis began more than two months ago. Still, filings came in slightly above market expectations of 2.4 million and lifted the total reported since March 21st to 38.6 million. On a non seasonally adjusted basis, the biggest increases in jobless claims were reported in California, New York, Florida, Georgia, Washington and Texas. The 4-week moving average, which removes week-to-week volatility, eased for a fourth straight week to 3.042 million, while continuing jobless claims hit a new record of 25 million in the week ended May 9th.
  • The safe-haven German 10-year government bond yield was down 1.6 bps at -0.48% on Thursday as investors await further details on the proposed €500 billion EU recovery fund, after a group of member states led by Austria and the Netherlands reiterated they oppose to it and announced they will work on an alternative that would include funding with loans, not grants.

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