Americas – US Markets Phase Out Trump’s Trillions

Trump’s latest trillion-dollar market rally seems to already be over, with index futures trading sideways after losing 0.1-0.5% overnight. Indices closed up yesterday, the Russel SmallCap leading with 2.06%.

Fed Head Jerome Powell yesterday told Congress that economic recovery would not take hold before the Coronavirus epidemic was under control.

Vice head Richard Clarida explained that in addition to 25 million displaced workers, inflation was falling rapidly.

While June’s housing market index improved to 58 points, May’s industrial production expanded by 1.4%, half the expected.

Retail sales soared by 17.7% (MoM) in May following a 14.7% contraction the month before. The CAD added 0.14% on better-than-expected investment data

Asia – Beijing Enters Lockdown

Chinese markets seemed unimpressed with short-term US cheer, all down in the 0.2% region.

The Nikkei lost ½ percent, and the Hang Seng is marginally flat.

China’s Global Times this morning reported that all residential neighbourhoods in Beijing were to enter lockdown.

Japan’s May trade deficit narrowed to ¥-833.4 bn, even as exports to the US slid by a full 50%, while Australia’s leading index rose by 0.2%, following April’s 1.5% contraction.

Europe – UK Bets All Down Under

European indices caught on to US optimism, the Dax, Eurostoxx, Italian FTSE, and AEX, adding 3.4% on average, Switzerland lagging with 1.95%.

Britain’s trade minister Liz Truss told reporters that exports could increase by a billion pounds once the free trade deals with Australia and New Zealand are finalized.

Unemployment in the UK remained pleasingly flat in April at 3.9% while earnings contracted by 1.7%.

This morning, May retail prices were down to 1%, the CPI to 0.5%, and PPIs also disappointed.

Following a worse-than-expected plunge in April’s GDP, today’s central bank meeting is expected to result in a huge stimulus, at the very least, with tomorrow’s vote expected to result in a further interest rate cut.

ZEW’s economic sentiment marker improved to -83 in Germany and 58.6 for the EU.

Commodities – Oil Stocks Rising

Oil lost 86 cents on the barrel overnight after the API’s 3.86 mB stocks increase.

Corporate – HSBC Up On Layoffs

Oracle was up 2.52% yesterday in NY despite missing expectations, with a 7.5% contraction in earnings per share ($0.99) on a 1% drop in yearly revenues to $39.1bn.

AT&T was up 0.88% after announcing a 3,400 person job cut.

HSBC was up 2% in London yesterday after resuming a massive 35,000 job cut, according to Reuters.

Facebook will provide an option to turn off political ads.

Events