Archives of “June 2020” month

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Germany June Ifo business climate index 86.2 vs 85.0 expected

  
  Uncategorized

Latest data released by Ifo – 24 June 2020

  • Prior 79.5
  • Expectations 91.4 vs 87.0 expected
  • Prior 80.1
  • Current assessment 81.3 vs 84.0 expected
  • Prior 78.9
Slight delay in the release by the source. Little surprise as business sentiment improved in the month of June but is still keeping at rather subdued levels compared to previous years. The sharper-than-expected bounce in expectations is a positive takeaway though.
Ifo notes that the rebound in June is the strongest increase recorded in the survey’s history.

For now, this just reaffirms better sentiment as the economy reopens regionally but we’ll have to see how all of this plays out in the coming months and if the recovery is as optimistic as what recent investor and business sentiment data suggests.

Stocks push lower as the session gets underway

  
  Analysis

European equities and US futures fall to start the session

That is putting a slight bid in the dollar, as we see the DAX fall by 1.4% with European indices seeing losses of just over 1% in general currently. Meanwhile, US futures are also seen lower by around 0.4% to 0.5% at the moment:

E-minis 24-06
I’m not seeing any particular headline catalyst for the move but the slight drag towards the end of US trading yesterday could perhaps be an ominous sign that the market is still somewhat more choppy – like last week – than the early gains this week suggest.
From a technical perspective, the S&P 500 failed to breach resistance around the 3,153 to 3,155 region and the Dow is also continuing to keep below its 200-day moving average.

China Beige Book are expecting a contraction for China’s economy in 2020

  
  Analysis

CBB International is a New-York-based research group. The firm puts a private survey called the China Beige Book

  • China Beige Book adapts methodology used by the U.S. Federal Reserve’s “Beige Book”
  • a quarterly report
  • Uses quantitative & qualitative data to track conditions within the Chinese economy
This latest survey utilises the survey of more than 3,300 firms, conducted mid-May to mid-June.
In brief, the results show:
  • China’s economy contracted in Q2 (ie the three months April to June) from a year earlier
  • historically low levels of manufacturing profits, capital expenditures and retail sales volumes, barely up from Q1
  • slow global demand remains a drag on growth
Looking out further:
  • “The eventual return to growth does not mean a return to anything approaching the old levels of growth”
  • “Until and unless global demand recovers more forcefully, the incremental quarterly improvement just seen will make for a contraction for full-year 2020”
—
Q2 GDP will be announced on July 16.
CBB International is a New-York-based research group. The firm puts a private survey called the China Beige Book

US coronavirus hospitalisations continue to surge to record highs each day

  
  Analysis
  • Texas coronavirus cases up 5489 vs 3280 yesterday

Cases can be sought to be brushed aside by the deniers as being the result oif more testing, but measures such as hospitalizations and deaths cannot be dismissed so readily.

Other data:

Confirmed COVID patients in Texas hospitals went up by 381 in just 1 day

  • Now at 4,092, the 12th record day in a row
  • COVID patients in Texas hospitals have risen 61% in one week
  •  COVID patients in Texas hospitals up 171% since Memorial Day

Meanwhile, in LA.

  • for the fourth day in a week the region +2,000 new COVID-19 cases, Los Angeles County at 2,364 new Covid-19 cases, a record daily increase.
  • Deaths are up week-over-week
  • highest positive test rate since May 16 (test rate shows that the surge in cases is not only a reflection of more testing … sorry deniers)
  • Hospitalizations now over 1,500, the number of hospitalized highest since May 18

China’s Global Times says Navarro’s clarification can’t undo damage to phase one trade deal

  
Analysis, Politics

On Monday evening US time White House trade adviser Peter Navarro really stuck his foot in his mouth.

ICYMI, as it happened:
  • Peter Navarro declares trade deal with China is over
  • Risk trades getting smashed on the Navarro comments that trade deal with China
  • More on White House trade adviser Navarro announcing the trade deal with China is over
  • Trump economic adviser Kudlow confirms the trade deal with China is not over
  • Epic Navarro stuff up –Donald weighs in to clear things up: “China Trade Deal is fully intact”
The GT is not letting him off the hook:
  • Navarro’s irresponsible comments have already had an impact on financial markets and the deal itself. 
  • Navarro has actually cast suspicion on the trade deal with his reckless and contradictory attitude.
  • the phase one trade deal is not the only issue in the US-China economic and trade relationship that requires efforts to eliminate doubts and concerns
  • The US government needs to reflect on all the battlegrounds it has opened against China in recent months
‘Risk’ was quick to bounce back from Navarro’s blunder.

US indices close higher in the day but near lows for the day

  
Analysis, US Market

Dow up for the 2nd straight day. NASDAQ closes at a record level after reaching a all time intraday high

The major indices close higher on the day but are also near lows for the day after some late day selling.

  • Dow close higher for the 2nd straight day
  • NASDAQ close higher for the 8th consecutive day
  • NASDAQ closes at a record level
  • NASDAQ reaches a new all time high
The final numbers are showing:
  • S&P index up 13.43 points or 0.43% at 3131.29
  • NASDAQ index up 74.89 points or 0.74% at 10131.36
  • Dow industrial average up 131.14 points or 0.5% at 26156.10
Dow up for the 2nd straight day. NASDAQ closes at a record level after reaching a all time intraday high_

US treasury auctions off $46 billion of 2 year notes at a high yield of 0.193%

  
  Analysis

2 year note auction results

  • high yield 0.193% vs. WI of 0.197%
  • bid to cover 2.46x vs. six-month average of 2.6x
  • dealers 31.2% vs. six-month average of 33.6%
  • directs 16.7% vs. six-month average of 15.4%
  • indirect 52% vs. six-month average of 50.9%
The good news is that the high yield at 0.193% Tas lower than the WI level of 0.197%. Dealers also took less than the six-month average at 31.2% vs. 33.6% over the last 6 months. The not so great news was the bid to cover came in less than the six-month average at 2.46x vs. 2.6x (six-month average).
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