Hello GAS subscribers! Herewith I am starting the series of my Weekly updates that will treat upon the most important issues that drove capital markets in the week just ended and prepare you for the week ahead. These posts are meant to be short, compound and precise. As I promised, no spam for GAS community!
-> continued to climb driven by hopes of reopening of major economies after lockdown and smooth recover in 3q20 onwards
-> clear outperformance of high-tech stocks over old economy bluechips (Nasdaq vs. Dow 2,5pp outperformance)
-> Nasdaq100 (comprising of major high-tech bluechips) now only 8% off its all-time highs testing a round psychologic 9000pts lvl
-> sectors most hit by Covid-19 outperformed (hotels&cruises over food retail, automobiles over household products, etc)
-> 1Q20 reporting season continues – major negative surprises Amazon, Apple spurred just a one day selloff; major +tives: Gaming – especially ATVI (Activision Blizzard), but also EA (Electornic Arts) reported very good numbers boosted by Covid-19 related gaming boom. Both companies also gave positive forecast on gaming market growth going forward.
-> Equities shrugged off the worst Jobless Claims report on record on Friday and ended the week at the highs (on week: SP500 +3.5%, Nasdaq +6%, Dow Jones +2.6%, DAX +0.4%, EuroStoxx 50 -0.7%, Nikkei +1.9%). Clear outperformace of high-tech vs. industrial bluechips and US vs. EU/Japan continued.
-> With virus front calming down and reopening of world economies slowly progresses, markets tend to concentrate on the future and keep discounting a V-shaped recovery in 2H20. Many economists warn though that second-line effects of distressed supply chains and aking consumer confidence are not priced in.
-> commodities (ex oil) pretty stable this week with gold hovering around usd1700
-> oil made a major comback from around usd10/bbl to usd25/bbl as the oversupply glut fears receeded
-> a little bit of wobbling in the USD, but dollar managed to strenghten vs. most CCYs
-> the US bonds (10y-2y) yield curve continued to steepen a little bit
-> President of USA Mr.Trump continues to build up political campaign against China in regards to the responsibility for Covid-19; threatened potential new tarriffs (one of major downside risks to markets in my view in coming weeks, given elections ahead in US this autumn)
-> Warren Buffett sold all his airlines stakes and said didn’t buy on the downturn in March as “did not see opportunities”
-> central banks continued expanding the lists of instruments eligible for buying within their asset purchases programmes
-> consumer confidence and PMI/ISM surveys continued to hit hsitorically low levels, confirming a big downturn in 2Q20
-> Friday April Jobless Claims report: Initial Claims 20,5m (slightly better than exp), Unemployment Rate 14,7% (vs. 16% exp)
Next Week’s major macro events:
Tuesday: US inflation rate/ JP Leading Economic Index
Wednesday: EA Industrial Production/ US crude oil stocks changes/ GB 1Q20 GDP growth
Friday: EA 1Q20 GDP growth rate/ US retail sales
all details here: https://tradingeconomics.com/calendar
Best of luck!
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