Stocks lower this morning as infection rates rise in US and China

Stocks lower this morning as infection rates rise in US and China 981 980 Realm

Last week’s pullback looks set to extend this week. Stocks are lower this morning as rising coronavirus infection rates in the U.S. and China increase concerns of a second wave. 

 

Global Macro

  • The number Import prices in the US increased 1% month-over-month in May of 2020, following a 2.6%drop in the previous month and above forecasts of a 0.6%rise. It is the biggest jump in import prices since February of 2019, mainly driven by a record 20.5%surge in prices for fuel, after international WTI prices plunged to record low levels in April. Excluding fuel, import prices ticked up 0.1 percent, following a 0.5%drop the previous month as cost of foods, feeds, beverages and consumer goods more than offset declining prices for nonfuel industrial supplies and materials and automotive vehicles. Year-on-year, import prices went down 6 percent.
  • Export prices in the US increased 0.5%from a month earlier in May of 2020, up from a 3.3%fall in the previous month and compared to market expectations of a 0.6%gain. Nonagricultural export prices rose 0.6%in May, after declining 5.7%from January to April, as rising prices for nonagricultural industrial supplies and materials more than offset declining prices for capital goods, consumer goods, automotive vehicles, and nonagricultural foods. Meantime, agricultural exports cost declined 0.5 percent, less than a 3.1%drop in April, as lower prices for corn, dairy products, and soybeans more than offset higher prices for meat, vegetables, and cotton. Year-on-year, export prices declined 6 percent, after plunging 6.8%in the prior month.
  • Industrial production in the Euro Area plunged 17.1%month-over-month in April of 2020, following an upwardly revised 11.9%fall in the previous month and compared to market forecasts of a 20%drop. It is the biggest decline ever inindustrial production and significantly higher than the 3-4%drops seen in late 2008 and early 2009 during the financialcrisis, as coronavirus containment measures lead to businesses and factories closures. Production of durable consumer goods fell by 28.9 percent, capital goods by 26.6 percent, intermediate goods by 15.6 percent, non-durable consumer goods by 11.9%and energy by 4.8 percent. Among the bloc’s largest economies, production in Germany fell 21 percent, declined 20.3%in France, 19.1%in Italy and 22.4%in Spain.
  • Exports from the UK fell 19.3%from a month earlier to GBP 37.71 billion in April of 2020, the lowest since August of 2010, due to a 14.9%drop in goods and a 24.4%decline in services. Within goods, sales were down for machinery & transport equipment (-27.1 percent); fuels (-15.9 percent); miscellaneous manufactures (-19.6 percent) and material manufacturers (-4.7 percent). Goods shipments declined to both EU countries (-10.4 percent) and non-EU countries (- 18.5 percent).
  • On Friday: European stocks ended mostly higher as bargain hunting after the massive sell-off in the previous session pushed up prices of several key stocks from across various sectors. US stocks fluctuated over the course of the trading day but maintained a largely positive bias. The advance on the day came on the heels of the sell-off seen in the previous session. Asian stocks fell as cautious commentary from the Federal Reserve coupled with rising coronavirus infection rates prompted investors to dump equities.
  • Friday’s data below:

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