European markets are higher this morning as investors respond to the gradual opening of economies.
- On Monday: European stocks ended sharply lower as an escalation in U.S.-China tensions over the origin of the coronavirus outbreak hurt sentiment and triggered heavy selling across the board.
- After coming under pressure early in the session, US stocks showed a significant turnaround over the course of the trading day. The major averages all bounced well off their early lows and into positive territory.
- Asian stocks ended mostly lower amid rising tensions between the United States and China over the origin of the coronavirus.
- New orders for US manufactured goods plunged 10.3% from a month earlier in March of 2020, following a revised 0.1% decline in March and worse market expectations of a 9.7% drop. It is the biggest fall in new orders ever, as many businesses operated on a limited capacity or have ceased operations completely due to the coronavirus pandemic. Transportation equipment, down two of the last three months, led the decrease, down by 41.3%.
- The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with U.S. planning. President Donald Trump, who has stepped up recent attacks on China ahead of the Nov. 3 U.S. presidential election, has long pledged to bring manufacturing back from overseas. Now, economic destruction and the massive U.S. coronavirus death toll are driving a government-wide push to move U.S. production and supply chain dependency away from China, even if it goes to other more friendly nations instead.
- Factory activity was ravaged across the world in April, business surveys showed, and the outlook looked bleak as government lockdowns to contain the new coronavirus pandemic froze global production and slashed demand. The coronavirus has infected more than 3.5 million people globally and killed around 247,000. With the public told to stay home in numerous countries, the global economy is expected to suffer its steepest contraction on record this year as supply chains have been massively disrupted. In a bid to combat the impact of the lockdowns, central banks and governments have unleashed unprecedented levels of fiscal and monetary policy, suggesting that without this conditions could have been even worse. Still, a series of Purchasing Managers’ Indexes (PMIs) from IHS Markit across Europe and Asia fell deeper into contraction last month, with many diving to all-time lows and others hitting levels last not seen since the 2008-2009 global financial crisis.
- Hong Kong’s gross domestic production shrank 5.3% on quarter in the first three months of 2020, following a revised 0.5% fall the previous period, an advance estimate showed. That was the steepest pace of contraction since comparable series began in 1990, as the Covid-19 pandemic caused a severe fall in activity. The IHS Markit/BME Germany Manufacturing PMI was revised slightly higher to 34.5 in April of 2020 from an initial estimate of 34.4. The reading pointed to the sharpest contraction in factory activity since March of 2009 as the COVID-19 pandemic and resulting global virus containment measures led to a record fall in output and new orders.
- The IHS Markit Eurozone Manufacturing PMI was revised slightly lower to 33.4 in April 2020, down from a preliminary estimate of 33.6 and from March’s final 44.5. The latest reading pointed to the steepest month of contraction in the manufacturing sector since comparable series began in June 1997, as governments across the region were forced to impose strict measures to contain the Covid-19 outbreak.
- The IHS Markit France Manufacturing PMI sank to 31.5 in April of 2020 from 43.2 in March and matching the preliminary estimate. The latest reading pointed to the third straight month of contraction in factory activity and the deepest so far, due to tough lockdown measures to curb the spread of coronavirus. Output, new orders, exports and employment all declined at a record pace.
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