President Trump returns to White House

President Trump returns to White House 150 150 Realm

Stocks have opened flat this morning after President Trump was taken from the military hospital and returned to the White House where he will continue his recovery from coronavirus. He tweeted “We’ll be back on the campaign trail soon”. Hopes for further stimulus in the US also helped sentiment and lifted stock futures higher overnight.

 

Global Macro

  • The IHS Markit US Composite PMI stood at 54.3 in September 2020, little-changed from a preliminary estimate of 54.4 and August’s final 54.6. Service sector activity continued to grow at a solid rate, while manufacturing output expanded the most since November 2019. Overall new business increased at a sharper pace and employment continued to rise. On the price front, selling prices rose sharply and at a faster rate than input costs as firms passed higher input prices on to clients. Looking ahead, business confidence fell to a four-month low amid concerns surrounding the upcoming presidential election and the ongoing COVID-19 pandemic.
  • The IHS Markit US Services PMI was confirmed at 54.6 in September 2020, down from the previous month’s 17-month high of 55.0. Still, the latest reading signaled a solid upturn in service sector business activity. New business expanded the most since March 2019 boosted by strengthening customer demand and amid the second-strongest increase in exports since data collection for the series began six years ago. In addition, the rate of job creation was the secondquickest since February 2019 and backlogs of work rose for the third month running. On the price front, input costs increased at a sharp rate due to greater wage and equipment costs, with many highlighting the uptick in PPE prices. Selling prices rose at the fastest rate since September 2018 and outpaced the rise in cost burdens, as firms took advantage of stronger demand conditions. Looking ahead, business confidence slumped to a four-month low amid concerns regarding the COVID-19 pandemic.
  • The yield on the US 10-year Treasury note rose to 0.7386% on Monday, the highest since August 27th as investors monitor Trump’s prognosis and prospects of more stimulus. Meanwhile, the 30-year Treasury bond went up to 1.5494%, the highest since June 9th.
  • On Monday: European stocks closed higher as prospects of U.S. President Donald Trump’s early discharge from hospital, and optimism about a new U.S. coronavirus relief package underpinned sentiment and prompted investors to create fresh positions. US stocks moved sharply higher during trading, more than offsetting the weakness seen in the previous session. With the upward move on the day, the major averages reached their best closing levels in a month.

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