Market Report 8th April 2020

Market Report 8th April 2020 981 980 Realm
European and Asian stocks higher on Tuesday. U.S. closed lower.
  • European stocks closed higher for a second successive day as stocks rallied reacting to reports showing new infections and deaths due to the coronavirus is declining in several hot spots across Europe.
  • After moving sharply higher at the start of trading U.S. stocks showed a significant downturn over the course of the session. The major averages pulled back well off their best levels before eventually closing in negative territory.  
  • Asian stocks rose amid signs of slowing coronavirus spread and on expectations of more central bank and government stimulus to counter the economic fallout from the pandemic.

Global Macro

  • The index for leading economic indicators in Japan, which combines a range of measures including new job postings, stock moves and consumer attitudes and measures the future economic activity, increased to 92.1 in February 2020 from the previous month’s 90.5 and above market consensus of 90.4, a preliminary estimate showed. The latest reading was still close to January’s decade low.    
  • The IBD/TIPP Economic Optimism Index in the US dropped 6.2 points from the previous month to 47.8 in April 2020, falling into pessimistic territory for the first time since September 2016, as efforts to contain the rapid spread of Covid-19 threw more than 10 million people out of work. The economic outlook gauge tumbled 9.8 points to 38, the lowest level since October 2011, and the outlook index for personal finances sank 11 points to 50.2, the lowest since October 2013. Meanwhile, the federal policies subindex rose 2.5 points to 55.1, with the increase coming entirely among Democrats, which may reflect the federal rescue efforts.
  • The number of job openings in the US decreased by 130 thousand to 6.882 million in February 2020 from a revised 7.012 million in the previous month and above market expectations of 6.6 million. Job openings decreased in real estate and rental and leasing (-30,000) and information (-29,000). The number of job openings was little changed in all four regions.
  • China’s foreign exchange reserves fell USD 46.085 billion from the previous month to USD 3.061 trillion in March 2020, the lowest level since October 2018 and below market forecasts of USD 3.1 trillion, amid a weakening yuan and concerns about the rapid spread of Covid-19 and its impact on the Chinese economy. The value of gold reserves was down to USD 100.79 billion at the end of March from USD 100.85 billion at the end of February.
  • Germany’s industrial production unexpectedly increased 0.3% month-over-month in February 2020, missing market expectations of 0.9% contraction and following an upwardly revised 3.2% rise a month earlier. Production grew for intermediate goods (0.8%), consumer goods (1.8%) and energy (2.7%). Meantime, capital goods fell by 0.3% and construction activity dropped by 1.0%.

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