Stocks are flat this morning after SP500 reaches new high

Stocks are flat this morning after SP500 reaches new high 150 150 Realm

The S&P 500 reached a new all-time high on Tuesday, retracing the losses made early in the year during the pandemic crisis. Even with the Wall Street rally European investors are subdued this morning with the focus on the lack of progress in talks in Washington to agree a new stimulus package and US/China relations with President Trump saying on Tueday he does not want to speak with China right now.

 

Global Macro

  • Stocks of crude oil in the United States decreased by 4.3 million barrels in the week ended August 14th of 2020, following a 4.5 million gain in the previous week and compared with market expectations of a 2.7 million drop, data from the American Petroleum Institute showed.
  • Building permits in the United States jumped 18.8% from a month earlier to a seasonally adjusted annual rate of 1.495 million in July 2020, the highest level since January and well above market expectations of 1.32 million. Single-family authorizations were up 17.0% to a rate of 983 thousand and permits for the volatile multi segment climbed 22.5% to a rate of 512 thousand. Across regions, permits increased in the South (13.7% to 754 thousand), the West (29.1% to 377 thousand), the Midwest (23.8% to 224 thousand) and the Northeast (14.8% to 140 thousand).
  • Housing starts in the US surged 22.6% to an annualized rate of 1,496 thousand in July of 2020, above market forecasts of 1,240 thousand and following an upwardly revised 1,220 thousand in June. It is the highest reading since February, before the coronavirus crisis, and the biggest jump since October of 2016. Single family housing starts jumped 8.2% to 940,000 and the volatile multi-family segment went up 56.7% to 547,000. Starts in the Northeast (35.3% to 157,000) and the South (33.2% to 830,000) saw the biggest increases. Starts also increased in the Midwest (5.8% to 201,000) and the West (5.8% to 308,000).
  • The British pound touched $1.324 for the first time since early January, boosted by dollar weakness and as Britain and the EU restart Brexit talks. Britain’s Brexit negotiator David Frost said that an agreement between the two sides on their future relationship could be reached as soon as September, even as they were still divided on key issues such as fair competition guarantees, the so-called level playing field, or on fisheries.
  • Brent crude prices failed to hold gains as the ongoing pandemic continues to suppress the outlook for oil demand while lingering concerns over a stalemate in US fiscal stimulus bill talks and simmering US China tensions have been rattling investors. On the supply side, compliance with the deal by OPEC countries was 95%, and by non-OPEC countries, it was 96%.
  • On Tuesday: European stocks were unable to sustain early support, losing steam as the day progressed to finish modestly under water after moving higher in the previous session. Simmering tensions between the United States and China provided negative sentiment after the Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies in a bid to limit the company’s access to electronic components. Adding to the air of uncertainty were new Brexit talks and Wednesday’s release of minutes of the U.S. Federal Reserve’s monetary policy meeting. US stocks turned in a mixed performance. Dow jones ended in the red, while S&P 500 and Nasdaq closed at record highs supported by optimistic economic data and better-than-expected corporate earnings. housing starts in the US surged 22.6% to an annualized rate of 1,496 thousand in July. It was the highest reading since February and the biggest jump since October of 2016; However, market participants remained wary of developments in the COVID19 pandemic across the globe. Asian stocks turned in a mixed performance as rising U.S.-China political tensions, after the Trump administration announced new restrictions on Huawei technologies, and the deadlock in the negotiations for a Covid-19 stimulus package in the United States dented investors’ risk appetite.

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