News / Analysis
Finance Update – US Data in FocusSeptember 2, 2020
Amidst news that Taiwan is planning changes to its passports in order to further differentiate them from Chinese documents, Chinese indices are mostly down this morning, including the Hang Seng at -0.16%; but the Nikkei is up 0.44%, and Australia’s ASX added 1.86% despite a 7% contraction in Q2 GDP QoQ.
Australia is experiencing its worst economic decline since record-taking began in 1959 and is now officially in recession. Meanwhile, former PM Tony Abbot has indicated he favours a free trade deal with the UK.
European benchmarks were mixed yesterday, the FTSE losing 1.7% but Holland’s AEX adding 0.55%. Both the Euro and pound are marginally down after August manufacturing PMIs disappointed in the EU, Germany and the UK, contracting slightly while improving considerably in Italy *53.1) and France (49.8).
Employment in Germany and the EU contracted but not to the extent that it affected the 6.4% unemployment rate in Germany, while the EU figure at 7.9% missed the expected 8%. And, again in Germany, this morning’s retail data for July shows a better-than-expected 4.2% YoY improvement in July.
In the UK, both Mortgage approvals and consumer credit improved in July considerably – the latter increasing from its £-0.382 bn in June to double the £0.678 bn expectation landing at £1.2 bn.
The BRC handed in a 1.6% contraction in July’s shop prices, 3 ticks worse than in June – all this as Scotland’s Nicola Sturgeon has promised a new Scottish referendum on independence, according to Reuters.
With Sec of State Pompeo calling out Iran over its disregard for China’s treatment of its Muslim minority, the Nasdaq led US indices higher adding 1.39%. Earlier this week Iran referred to the UAE’s peace treaty with Israel as a betrayal of the Arab world.
Most US data yesterday for August exceeded expectations, Redbook’s same-store sales growth figure increasing by a per cent and a half to 5.8% and ISM manufacturing data improving by almost 2 points to 46.4 for the PMI and 6 for new orders, landing at 67.6.
Only Markit’s manufacturing PMI showed a disappointing decline to 55.1 and construction spending fell to a 0.1% MoM increase in July.
Oil produced a 15 cent blip yesterday after the API reported another 6.36 mB drawdown for the last week of August, but the commodity continues trading sideways along 43.15.
Adding to Australia’s woes, Exxon (-1.28%) yesterday announced a voluntary lay-off programme in that country alongside extensive job cuts worldwide. Reuters reports that the company is looking to sell its 50% interest in joint Australian oil and gas ventures.
Amazon (+1.4%) could be ratcheting up its financial services portfolio, now offering insurance and gold investments. Amazon launched its Amazon Pay digital wallet in 2016 and has since added a credit card to its array.
And Tesla (-4.67%) is planning to capitalize on its recent stock split by issuing a further $5bn in new shares. Underwriters include Goldman Sachs, Bank of America, Citigroup and Morgan Stanley.
Fresenius and Valero energy pay dividends today.
|09:00 AM GMT||EU||Producer Price Index|
|11:00 AM GMT||US||Mortgage Applications. ADP Employment Change at 12:15. Factory Orders at 2 PM and the Fed’s Beige Book at 6 PM.|
|02:30 PM GMT||Canada||Labour Productivity|
|02:30 PM GMT||Oil||EIA Crude Oil Stocks Change|
|11:00 PM GMT||Australia||Combank Services & Composite PMIs. Trade Balance at 1:30 AM (+1)|
|11:50 PM GMT||Japan||Foreign Investments in stocks & bonds|
|01:45 AM GMT (+1)||China||Caixin Services PMI|