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Markets get off to a positive start this week

Markets get off to a positive start this week 150 150 Realm

Stocks are higher this morning after news that the Trump administration will fast track approval for a UK developed coronavirus vaccine which has not yet been proved by trials.

 

Global Macro

  • Public sector net debt, for the united kingdom, excluding public sector banks crossed the GBP 2.0 trillion mark for the first time in July 2020, as the government stepped up efforts to support the economy hit by the pandemic. Gilts made up the largest component of debt. At the end of July there were GBP 1.68 trillion of central government gilts in circulation (including those held by the Bank of England Asset Purchase Facility Fund). There has been a substantial month-onmonth increase in gilts issuance (at nominal value) in the current financial year, partially reflecting the need for extra funding to support the government’s coronavirus relief schemes and to compensate for the fall in tax revenue.
  • Sales of previously owned houses in the US jumped 24.7 percent from the previous month to a seasonally adjusted annual rate of 5.86 million units in July of 2020. That was a new record increase in existing home sales, bringing the total to the highest since December of 2006 amid low interest rates. Single family sales went up 23.9 percent and those of condos 31.8 percent. Each of the four major regions attained double-digit increases. There were 1.5 million previously owned homes on the market in July, down from 1.9 million a year ago. The median existing house price increased to a record USD 304,100.
  • The IHS Markit US Composite PMI increased to 54.7 in August 2020 from 50.3 in the previous month, signaling the sharpest upturn in private sector business activity since February 2019. Service sector activity expanded by the most for 17 months, while goods manufacturers recorded the fastest increase in production since January 2019.
  • The IHS Markit US Manufacturing PMI increased to 53.6 in August of 2020 from 50.9 in July and beating market forecasts of 51.9, preliminary estimates showed. The reading pointed to the strongest increase in factory activity since January of 2019, driven by quicker expansions in output and new orders as the resumption of business operations and the reopening of clients had helped to boost sales. Firms also recorded the first rise in foreign client demand since December 2019. For the first time since February, manufacturers registered a rise in the level of work-in-hand in August. As a result, firms indicated a renewed uptick in employment. Meanwhile, the rate of input cost inflation was the fastest since January 2019. Manufacturers partially passed-on some of their costs to their clients through a solid rise in selling prices.
  • On Friday: European stocks weighed by economic data that showed Europe’s economic recovery slowed in August. The euro area private sector grew at a slower pace following a rebound from the downturn caused by the coronavirus pandemic, flash survey data from IHS Markit showed. US stocks rose to record highs, reflecting the strength on wall street that came following the release of a report from IHS Markit showing U.S. business activity expanded at the fastest pace in over a year in the month of August Asian stocks f rose broadly as news that China and the U.S. have agreed to hold new trade talks in the coming days helped offset gloom over downbeat U.S. jobless claims data released overnight. Encouraging news on the coronavirus vaccine front also underpinned sentiment, with Pfizer and BioNTech SE saying they are on track to seek regulatory review for their coronavirus vaccine candidate as early as October.

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