News / Analysis
Finance Update – The Historical Cycle at PlaySeptember 8, 2020
With daily COVID deaths in the US at a 2-month low, US index futures are up this morning after the Labour Day banking holiday saved benchmarks from Friday’s bloodbath.
The US Dollar added another 0.4% during the Asian session after US Pres D. Trump told his Labour Day audience that if re-elected he would entirely “decouple” the economy from China and target companies manufacturing there.
European indices yesterday took advantage of the US market holiday to rise quite spectacularly across the board. The FTSE added 2.39%with the DAX up 2.01% and the CAC – 1.79%.
Industrial production in Germany fell to a 1.2% increase, down from June’s 9.3% MoM, and the nation’s trade surplus surprisingly improved to a seasonally adjusted €18 bn in July as both imports and export growth contracted dramatically.
France’s July Trade deficit improved in July to €6.2 bn.
Britain’s Halifax House Price Index pleased with a 1.6% expansion in August. Like-for-like retail sales in the Isles, however, fell to 4.7%, missing the 5.7% increase expected.
Asian indices are basking in yesterday’s European uptrend with only the A50 showing signs of wear and tear – losing 1.43%. Otherwise, the ASX is up 1.06% and green in general rules the boards.
China’s foreign exchange reserves missed the mark, only increasing by $11 bn to $2.165 tn.
And Japan’s GDP contracted by 7.9% QoQ in Q2 – not as bad as the 8.1% expected. The nation swung from a ¥77.3 bn deficit in June to a ¥137.3 bn surplus in July. On the other hand, household spending contracted by a whopping 7.6% YoY in July and cash earnings by 1.3%.
In Australia, business conditions missed expectations at -6 points, but business confidence improved to -8 from -14 in July.
Oil prices continue to fall as Summer holidays come to an end and “driving season” winds down. Hedge funds last week sold a record 40 mn barrels’ worth of futures and options contracts, according to Reuters. On the other hand, US shale producers are preparing for a Biden takeover by stocking up on drilling permits.
Boeing (+1.35%) woes return to the headlines as the US Federal Aviation Administration begins reviewing 787 Dreamliner manufacturing lapses, according to the Wall St. Journal.
Today, expect quarterly earnings from Slack (-6.18%) and Travis Perkins. Walmart (-1.18%), Johnson & Johnson (-0.57%) and Southern (-0.56%) pay dividends, and Royal Mail holds a shareholders’ conference.
|09:00 AM GMT||EU||GDP & Unemployment|
|10:00 AM GMT||US||NFIB Business Optimism. Consumer Credit at 7 PM|
|10:45 PM GMT||NZ||Manufacturing Sales. Business Confidence at 1 AM (+1)|
|00:30 AM GMT (+1)||Australia||Consumer Confidence. Home loans at 1:30|
|01:30 AM GMT (+1)||China||CPI & PPI|