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Stocks higher but US China relations deteriorate

Stocks higher but US China relations deteriorate 150 150 Realm

UK and European stocks are higher this morning encouraged by latest results from major companies including Unilever and Tesla. However, markets are nervously monitoring relations between US and China after the US ordered a shutdown of China’s consulate in Houston to “protect American intellectual property and American’s private information,” – China has promised a firm response if the decision is not reversed.

 

Global Macro

  • The average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac in the United States dropped 0.3% from a month earlier in May 2020, following a downwardly revised 0.1% advance in April. That was the first monthly decline in house prices since January 2012, amid the coronavirus crisis. House price changes ranged from -1.0% in the New England division to +0.1% in the South Atlantic division. Year-on-year, house prices rose 4.9%.
  • Spot gold traded above $1,845 an ounce on Wednesday, having touched a nine-year high of $1,866 early in the session, as renewed tensions between the US and China increased demand for safety. Gold prices are now up more than 25% from March’s multi-month lows, and closer to their record high of $1,920 an ounce hit in September of 2011 as lower interest rates and governments stimulus have supported the upward trend. The metal is likely to continue its trajectory amid expectations for increased stimulus to aid the recovery of pandemic-hit economies and concerns of inflation. Meantime, Silver breached $22 for the first time since October of 2013.
  • The number of people infected with the coronavirus across the world hit 14.95 million, of which at least 616 thousand people have died, according to Johns Hopkins. In the US, the epicenter of the disease, the number of infections rose by more than 64.5 thousand in the last 24 hours, while Brazil reported 41 thousand new cases and India over 39 thousand.
  • On Wednesday: European stocks ended lower as the euphoria over an agreement on EU stimulus package faded and the focus shifted back to U.S.- China tensions, and surging coronavirus cases around the world. Asian stocks ended mostly lower after U.S. President Donald Trump warned the U.S. coronavirus crisis will probably worsen before improving. US stocks fluctuated over the course of the trading day but managed to end the session mostly higher. With the upward move, the Dow reached its best closing level in over a month and the S&P 500 rose to a new five-month closing high.
  • Wednesday’s data below:

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