Hi there! I hope everyone is safe out there and slowly getting back to normality. GlobalAlphaSearch.com is now officially on FB! Please join me there to strenghten our community of Smart Investors :). To the point now…Quick recap of the state of markets for you guys:
Equity markets stories:
-> US market was closed on Monday due to Memorial Day, but other major markets pushed substantially higher as risk sentiment built on and further positive developments on the Covid-19 front took place.
-> On Tuesday another US biotech company Novavax informed that it started human study of its experimental vaccine against C-19.
-> US-China tensions persisted, but did not escalate to a point that would negatively impact the equity markets. White House officials kept theatening China with new sanctions, should China insist to implement the planned national security control that would further decrease Hong Kong’s autonomy.
-> GDP of OECD countries fell by 1.8% in 1Q20, biggest drop since 2009, when we saw a 2.3% drop.
-> in general risk-on mode supported equity markets
-> Effective weekly index changes: S&P500 +3,0%, Nasdaq +1.8%, EuroStoxx600 +3.0%, DAX +4.6%%, Nikkei225 +7.3%.
Other markets events:
-> Bonds: US yield curve (10y-FF) hovered around in the same place pretty much 60bps-70bps, German curve (10Y Bunds-3M) similar – stable with Bunds in narrow range -40-45bps , Peripferial EU yields kept narrowing, High Yield Spreads also improved.
-> Commodities (ex oil): hardly any action in Gold this week, Copper +1,3% on week.
-> Oil: stabilized after recent massive downs and ups and traded $32-$34 most of week to close at weekly tops into Friday close at $35.2 (weekly change +5.2%).
-> Currencies: USD weakened substantially as investor sentiment improved globally driving demand for riskier assets and CCYs. Especially Eemergin MArket CCYs gained strenghts. DXY (Dollar Index) -1.6%, EURUSD +1.9%, USDRUB -2.1%, USDBRL -3.5%.
Major macro events: (layout will change next week most possibly):
GE: Ifo Business Climate above exp (79,5 vs. exp. 78,3)
GE: GfK Consumer Confidence JUN inline (-18,9 vs. exp. -18,6)
US: New Home Sales APR BETTER (+0.6% vs. exp. -15,4% MoM)
EA: Business Confidence MAY INLINE (-2.4 vs. f’cast. -3)
US: Durable Goods Orders APR SLIGHTLY BETTER (-17.2 vs. exp. -19% MoM)
US: GDP Growth Rate QoQ 2nd Est Q1 (-5% vs. 4.8% exp.)
US: Weekly Jobless Claims BETTER (Continuing 21052k, Initial 2123k vs. exp. Continuing 25073k, Initial 2438k)
JP: Consumer Confidence MAY SLIGHT BETTER (24 vs. f’cast 25,1)
FR: GDP Growth Rate YoY final Q1 BETTER (-5.3% vs. exp. -5,8%)
IT: GDP Growth Rate YoY final Q1 WORSE (-5.4% vs. exp. -4,8%)
US: Personal Spending MoM Apr BIT WORSE (-13.5% exp. -12%)
US: Personal Income MoM APR BETTER (+10.5% vs. exp. -6%)
Next Week’s major macro events: (changing layout to make it clearer and easier)