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Stocks slide as US China dispute worsens

Stocks slide as US China dispute worsens 150 150 Realm

Following the US closure of the Chinese consulate in Houston, China has retaliated by ordering the closure of the US consulate in the city of Chengdu. This morning UK and European markets are following US and Asia lower. Yesterday’s sell-off in the US was compounded by a new rise in jobless claims, details below.

Global Macro

  • The number of Americans filling for unemployment benefits increased 1.42 million in the week ended July 18th, accelerating for the first time in nearly four months and compared to market expectations of 1.30 million, as a resurgence in new COVID-19 cases forced several states to scale back or pause the reopening of their economies. The latest number lifted the total reported since March 21st to 52.7 million. The 4-week moving average, which removes week-to-week volatility, eased to 1.36 million from 1.38 million, while continuing jobless claims decreased to 16.20 million in the week ended July 11th, below market forecasts of 17.07 million.
  • The consumer confidence in the Euro Area fell by 0.3 points to -15.0 in July 2020 from -14.7 in the previous month and compared with market expectations of -12, a flash estimate showed. In the European Union as a whole, consumer sentiment was unchanged at -15.6. Both indicators remain well below their long-term averages of -11.1 (Euro Area) and – 10.5 (EU).
  • The Confederation of British Industry’s total order book balance rose to -46 in July of 2020 from -58 in June, below market expectations of -38 and pointing to the smallest decline in factory orders since March. The manufacturing output expectations balance advanced to +15 in July from -30 in the previous month, its highest since September of 2018. Also, export order books increased to -64 from -79 and the stocks of finished goods growth accelerated (+19 vs +2). In addition, average selling prices are expected to increase (+4 vs -10).
  • On Thursday: European stocks gave up gains to close near the flat line after data showed the Eurozone consumer morale deteriorated unexpectedly in July while the US weekly jobless report showed that filings for unemployment benefits rose for the first time in nearly four months last week. At the same time, the latest round of Brexit negotiations concluded with EU’s chief negotiator, Michel Barnier, saying that the two sides are still divided on key issues Asian stocks ended mixed as tensions between the U.S. and China escalated sharply after the U.S. ordered the closure of the Chinese consulate in Houston to “protect Americans’ intellectual property and private information.” US stocks After showing a lack of direction early in the session, stocks moved sharply lower over the course of the trading day on Thursday. The major averages pulled back firmly into negative territory, with the tech-heavy Nasdaq showing a particularly steep drop.
  • Thursday’s data below:

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