Stocks flat to lower as EU leaders meet

Stocks flat to lower as EU leaders meet 150 150 Realm

Stocks are flat to lower this morning as EU leaders attend a two day meeting in Brussels to discuss a proposed coronavirus recovery package and US infection numbers continue to rise.

 

Global Macro

  • The European Central Bank left monetary policy unchanged during its July meeting, as policymakers took a wait-and see approach to assess the effectiveness of a series of unprecedented measures taken over the past four months to support the bloc’s economy amid the coronavirus crisis. The ECB kept its main refinancing rate unchanged at 0% while the deposit rate remained at a record low -0.5%. In addition, the central bank pledged to buy up to €1.35 trillion worth of debt through June 2021 under its Pandemic Emergency Purchase Programme.
  • Manufacturers’ and trade inventories in the US dropped 2.3% from a month earlier in May 2020, following an upwardly revised 1.4% fall in April and matching market expectations. It was the biggest decline in business inventories on record, amid the coronavirus pandemic. Stocks dropped at retailers (-6.2% vs -3.8% in April) and wholesalers (-1.2% vs 0.2%). Meanwhile, stocks at manufacturers rose 0.2%, rebounding from an upwardly revised 0.5% fall in the prior month. Year- on-year, business inventories went down 4.8%.
  • Global debt surged to a record $258 trillion in the first quarter of 2020 as economies around the world shut down to contain the coronavirus pandemic, and debt levels are continuing to rise, the Institute for International Finance said on Thursday.
  • The number of Americans filling for unemployment benefits stood at 1.30 million in the week ended July 11th, little- changed from a revised 1.31 million claims in the prior week and above market expectations of 1.25 million. The latest number lifted the total reported since March 21st to 51.3 million, as record spikes in coronavirus infections forced several states to scale back or pause the reopening of their economies. The 4-week moving average, which removes week-to-week volatility, eased to 1.38 million from 1.44 million, while continuing jobless claims decreased to 17.34 million in the week ended July 4th, below market forecasts of 17.60 million.
  • Import prices in the US increased 1.4% month-over-month in June 2020, following a 0.8% increase in May and easily beating forecasts of a 1.0% advance. It was the largest monthly increase in import prices since March 2012 led by a record rise in fuel prices (21.9% vs 15.4% in May). Prices for import petroleum rose 23.0%, after advancing 16.1%, and natural gas prices increased 6.8% following a 6.4% rise the previous month. Nonfuel import prices rose 0.3% in June, after a 0.1% gain in May. Year-on-year, import prices fell 3.8%.
  • Imports to the Euro Area fell 26.7% from a year earlier to EUR 133.9 billion in May 2020, the largest decline since a record drop in July 2009, as the COVID-19 containment measures widely introduced by the countries across the region hit domestic demand.
  • On Thursday: European stocks fell as growing friction in U.S.-China relations as well as fears of a second wave of coronavirus infections dashed investor hopes for a revival of the global economy. Asian stocks fell as investors fretted about a second wave of coronavirus infections and the reimposition of lockdowns in the wake of fresh spikes in infections in the United States, Australia and Japan. US stocks After coming under pressure early in the session, stocks remained mostly lower throughout the trading day. With the drop on the day, the Dow and the S&P 500 gave back ground after ending the previous session at their best closing levels in over a month.
  • Thursday’s data below:

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