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Stocks steady after PMI data

Stocks steady after PMI data 150 150 Realm

“Eurozone growth loses momentum in August” from IHS Markit this morning. The composite purchasing managers’ index (PMI) for the region, considered a good indicator of economic health, fell to a two month low in August of 51.6. Above 50, indicating growth, but below expectations of 55.3. UK PMI Data, just released, shows “Sharpest increase in UK private sector output since October 2013, but the rate of job shedding accelerates in August”.

 

Global Macro

  • The United Kingdom’s Gfk Consumer Confidence remained unchanged at -27 in August 2020 from the previous month, as personal finances optimism improved but the economy’s outlook deteriorated. The Major Purchase Index edged up one point to -25.
  • The number of Americans filling for unemployment benefits rose by 1.1 million in the week ended August 15th, above market expectations of 925 thousand, as a resurgence in new COVID-19 cases hit the labor market. The latest number brought the total reported since March 21st to 57.4 million. The 4-week moving average, which removes week-to-week volatility, eased to 1.18 million from 1.25 million, the lowest since March. Continuing jobless claims decreased to 14.84 million in the week ended August 8th, below market forecasts of 15.0 million and the lowest since first week of April.
  • Oil headed for its third week of gains, despite a retreat since mid-week amid doubts about demand recovery due to the ongoing coronavirus pandemic. OPEC+ said that a second prolonged wave of the pandemic remains a significant risk for the market and urged their members and allies to boost compliance with oil output cuts aimed at supporting prices. Meantime, EIA data showed there was a smaller-than-expected drop in US stockpiles and that fuel demand plunged 14% on-year in the last four weeks as some US states reintroduced restrictions to curb the spread of the virus.
  • Gold extended gains, reversing course from a one-week low of $1,925 an ounce touched in the previous session after several Federal Reserve policymakers warned that the US central bank may need to ease monetary policy further to cushion the economic blow from the pandemic. Supporting prices further was a surprise rise in US jobless claims to above 1 million last week.
  • On Thursday: European stocks headed south, finishing in the red, after the most recent FOMC policy meeting minutes showed Fed officials were not positive about additional monetary easing. Worries about a resurgence of coronavirus infection in Europe also weighed on markets, with Germany recording more than 1.000 new cases for a third day and Spain reporting its highest number of daily infections since April. US stocks moved mostly upwards after recovering from an initial move to the downside. As reflected by a notable advance by Nasdaq, the strength that emerged on Wall Street was largely among technology stock. Intel (INTC), Microsoft (MSFT), Alphabet (GOOGL), Apple (AAPL), and Netflix (NFLX) showed strong moves to the upside on the day. Asian stocks fell broadly, with concerns over rising coronavirusinfections and a cautious outlook from the U.S. Federal Reserveweighing on sentiment.

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