US Election, Recession, Brexit: What’s in store for markets in 2020 H2?

The first half of 2020 has been a wild ride. We’ve seen unprecedented moves in markets, historic stimulus efforts by both central banks and governments, and record-breaking data that grabbed headlines across the globe.

H1 has already brought plenty of drama, but what should we expect from the next two quarters? Join us for a recap of some of the biggest events in market history and a look at the risks and opportunities that lie ahead.

Coronavirus pandemic prompts worst quarter in decades for stocks

At the start of 2020 the main themes of the year looked to be the US Presidential Election, the trade war with China, and Brexit.

It seems like years ago that markets began to get jittery on fears that the handful of novel coronavirus cases in Wuhan, China, could become something ‘as bad as SARS’. It quickly became apparent that we were dealing with something much worse, and the market was quick to realise the full, brutal, reality of a global pandemic.

The panic reached its zenith towards the end of March. As the sell-off ran out of momentum global stock markets were left -21.3% lower. The S&P 500 had its worst quarter since 2008; the Dow dropped the most since 1987 and set a new record for the biggest single-day gain (2,117 points) and single-day loss (2,997 points). European stocks had their worst quarter since 2002, with a -23% drop in Q1.

Oil turns negative for first time in history after Saudi Arabia sparks price war

Things became even more chaotic in the oil markets when, after OPEC and its allies failed to agree a pandemic response, Saudi Arabia opened the floodgates and slashed prices of its crude oil exports. Oil prices endured the biggest single-day collapse since the Gulf War – over -24%.

It was further strain for a market now seriously considering the risk that shuttered economies across the globe would hit demand so hard that global storage would hit capacity. The May contract for West Texas Intermediate went negative – a first for oil futures – changing hands for almost -$40 ahead of expiry.

Meanwhile US 10-year treasury yields hit record lows of 0.318%, and gold climbed to its highest levels in seven years, pushing even higher in Q2.

Economies locked down, central banks crank up stimulus

Nations across the globe ordered their citizens to remain at home, taking the unprecedented step to voluntarily put huge swathes of their economies on ice for weeks. Even when lockdown measures were eased, the new normal of social distancing, face masks, and plastic screens left many businesses operating at a fraction of their normal capacity.

The world’s central banks were quick to step in during the height of market volatility and continued to do so as the forecasts for the economic impact of the pandemic grew even more grim. The Federal Reserve, the Bank of England, the Bank of Canada, the Reserve Bank of Australia, and the Reserve Bank of New Zealand all dropped rates to close to zero. Along with the European Central Bank, they unleashed enormous quantitative easing programmes, as well as other lending measures to help support businesses.

Unprecedented stimulus as unemployment spikes

Governments stepped in to pay the wages of furloughed employees as unemployment spiked – the US nonfarm payrolls report for April showed a jaw-dropping 20.5 million Americans had become unemployed in a single month. In the space of just six weeks America had erased all the job gains made since the financial crisis. The bill for US stimulus measures is currently $2 trillion, and is set to go higher when further measures are approved.

While most of the data may be improving, we’re still yet to see just how bad the GDP figures for Q2 are going to be. These, which will be released in the coming weeks, will show just how big a pit we have to dig ourselves out of.

H2: Recovery, US election, trade wars, Brexit

Markets may have recovered much of the coronavirus sell-off – US and European stocks posted their best quarter in decades in Q2 – but the world is still walking a fine line between reopening its economies and fending off the pandemic. Second wave fears abound. In the US in particular, economic data is largely pointing to a sharp rebound in activity, but at the same time Covid-19 case numbers are consistently smashing daily records.

These key competing bullish and bearish factors threaten to keep markets walking a tightrope in the quarters to come. Because of this, progress in the race to find a vaccine is closely watched. Risk is still highly sensitive to news of positive drug trials. The sooner we get a vaccine, the sooner life can return to normal, even if the world economy still has a long way to go before it returns to pre-crisis levels.

US Presidential Election: Trump lags in polls, Biden threatens to reverse tax cuts

The biggest talking point on the market in the coming months, aside from coronavirus, will undoubtedly be the US Presidential Election. The stakes are incredibly high, especially for the US stock market, and Democrat nominee Joe Biden intends to reverse the bulk of the sweeping tax cuts implemented by president Donald Trump.

Trump is currently lagging in the polls, with voters unimpressed by his response to the pandemic and also to the protests against police brutality that swept the nation. The president has long taken credit for the performance of the stock market and the economy, so for the latter to be facing a deep recession robs him of one of his key topics on the campaign trail.

Joe Biden may currently have a significant lead, but there is a long time to go until the polls, and anything could happen yet.

China trade war in focus, Hong Kong law adds fresh complications

The trade war with China would be a focus for the market anyway, but will come under increasing scrutiny in the run-up to the election. Thanks to Covid-19, anti-China sentiment is running high in the United States. This means Biden will also have to talk tough on China, which could mean that the damaging trade war is set to continue regardless of who wins the White House this time around.

Tensions have already risen on the back of China’s passing of a new Hong Kong security law, and coronavirus makes it virtually impossible that the terms of the Phase One trade agreement hashed out by Washington and Beijing will be carried out. Trump may be forced to stick with the deal, because abandoning it would leave him unable to flaunt his ability to make China toe the line during the presidential race. This would be positive for risk – markets were already rattled by fears that the president’s response to the Hong Kong law would include abandoning the deal.

How, when, and if: Unwinding stimulus

Even if we get a vaccine before the end of the year and global economies do rebound sharply, the vast levels of government and central bank stimulus will need to be addressed. Governments are running wartime levels of debt.

We’re looking at an even longer slog back to normalised monetary policy – something that banks like the Bank of England and the European Central Bank were struggling to reach even before Covid. There will be huge quantitative easing programmes to unwind and interest rates to lift away from zero, or potentially even out of negative territory.

Markets have been able to recover thanks to a steady cocktail of government and central bank stimulus. The years since the financial crisis have proven that it is incredibly difficult to wean markets and the economy off stimulus. There could be some tough decisions ahead, especially as governments begin to consider how they plan to repair their finances in the years to come.

Brexit deadline approaches, impasse remains

There is also Brexit to consider. While the coronavirus forced officials to move their negotiations online, little else seems to have happened so far. Both sides are refusing to budge and both sides are claiming that the other is being unreasonable. The UK does not want an extension to the transition period, and the two sides are running out of time to agree a trade deal.

We’ve seen before that both Downing Street and Brussels like to wait until the last possible moment to soften their stance. However, the risks here are higher because before there was always the prospect of another extension.

The last time negotiations were extended the battle in Westminster shocked the UK to its constitutional core. The Conservative landslide victory of 2019 gave Boris Johnson a much stronger hand this time around – the UK will leave in December, regardless of the situation.

Stay on top of the biggest events in H2

Whatever happens in the coming months, we’ll be here to bring you the latest news and analysis of the top developments and market events via the blog and XRay.

Coronavirus outbreaks leave stocks stuck in their ranges

Virus outbreaks in the US continue to weigh on the mood, as it suggests the run-up in stocks on hopes of a V-shaped economic recovery may be overly optimistic. Several states, mainly in the south, have been forced to re-impose lockdown restrictions after being the first to reopen. Dr Fauci described it as a ‘serious problem’. The dangers of reopening too quickly seem all too apparent, but investors are also keeping an eye on outbreaks in Tokyo, Australia and China.

European equities were a touch softer but trading near the flatline on Monday morning, with a general lack of direction about today’s trade. Major indices tracking around the middle of their June ranges after Asian equities fell. US equities were lower Friday and finished down for the week but, as the month ends, stocks have enjoyed a very strong quarter.

The FTSE 100 is up over 8% quarter-to-date, while the S&P 500 has rallied over 16% in Q2 and the DAX has surged 21%. Valuations remain the concern as we head into earnings season with the S&P 500 still trading at more than 22x on a forward basis.

Coming up this week – Powell testimony, US nonfarm payrolls

Of course stocks haven’t only rallied because of reopening economies – enormous liquidity thanks to the coordinated action of central banks has been key. Central bankers have been striking similar notes in terms of the response to the crisis and Jerome Powell, the Federal Reserve chairman, will testify in Congress again this week. The Fed’s rather downbeat assessment of the economic recovery helped to stop the rally in its tracks and since then indices have been trading ranges.

The US jobs report – on Thursday this week due to the July 4th holiday – will provide an important view on the pace of recovery, but we should note that the weekly unemployment claims numbers are proving a more sensitive and up-to-date barometer, not least since there are problems with the data gathering for the monthly nonfarms report.

Facebook shares tumble on ad boycott, but how long can brands stay away?

Facebook shares tumbled more than 8% on Friday as a growing number of companies join a boycott of the platform over hate speech. We saw how a boycott of Facebook by users failed to move the needle on earnings, but this time it’s different – it’s the big brands that pay the big bucks and the loss of Unilever, Starbucks, Coca-Cola, Levi’s and Diageo among others will create a headwind to revenue growth in the coming quarter.

I would think Facebook can and will do a lot more and will be able to take steps to assuage brands’ concerns, allowing the stock to recover. Moreover, will brands be able to avoid Facebook for very long? Virtue signalling is one thing, but they also need to shift product.

Crude oil was steady with WTI (Aug) around $38 after rallying off the medium-term support around $37.50. OPEC+ compliance in June is expected to be higher than in May, mainly because Saudi Arabia, Oman, Kuwait and the UAE are cutting above their quotas. In FX, cable continues to track its channel lower with a new low put in at 1.2315, with the previous support in the 1.2390 region now acting as resistance.

XRay Live Talks: Trading in the time of Coronavirus

This week we invited our traders to take part in a live conversation with our chief market analyst Neil Wilson.

This was the first of our Live XRay Talks, our virtual trading roundtables and Q&As where we give traders the chance to meet the experts and discover what’s really going on in the markets.

Neil took questions on both the economic and market impact of Covid-19, the reaction of central banks and what could still be to come, OPEC production cuts, the green revolution and more.

Watch it here:

We’ll be bring our traders plenty more of these exclusive events, where you can get your questions answered by veteran traders and market professionals. Our next session takes place on July 4th with Andrew Barnett, senior trader at Trading Mastery.

Make sure you’re signed up to Marketsx for your chance to join our next Live XRay Talk.

Fed rides to the rescue

Yesterday, I noted that policymakers would be forced to chuck even more money at pandemic relief as second waves of cases and a painful and incomplete economic recovery bit. Right on cue, the Federal Reserve announced it would start buying individual corporate bonds, building on the existing purchases of ETFs. The Fed ‘will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds’, the central bank said.

The Fed is stepping things up after its statement last week left investors more than a little concerned about the pace of recovery. The move suggests that the Fed, as was clear last week, is worried about the economy enduring a protracted downturn. Meanwhile the White House is again said to be mulling a $1tn infrastructure plan to stimulate the economy. The two horsemen of risk sentiment recovery – monetary and fiscal stimulus – riding to the rescue again.

US stocks erased losses, Europe pushes higher on the open

US equities bounced strongly off the lows of the day. The S&P 500 closed up 0.83% at 3,066, a full 100 points above its low of the day. The Dow scrubbed out a 760-point drop to finish up 157 points. European equities closed lower but well off the lows. Things had looked a little dicey as the major indices tested some key support, but the ‘plunge protection team’ arrived right on time. The Vix swung from a high close to 45 to close under 35 – the Fed made clear it’s got this.

Today the major bourses have taken their cue from Wall Street and opened higher. Asian markets rose. The FTSE 100 rose more than 2% to back above 6,200 and test the 100-day line resistance, while European counterparts rose by similar amounts. Ashtead Group rose c15% in early trade after it maintained its dividend despite a halving in profits. The infrastructure stimulus touted by the White House would be a massive boost for the construction equipment company.

Geopolitical tensions lurk as Korea tensions rise, Chinese and Indian forces clash

Reports circulating close to the market open of North Korea blowing up the inter-Korean liaison office in Kaesong near the border need to be monitored but we have yet not seen any major market response. There are also reports of an ‘incident’, between Chinese and Indian forces on the border later described as a ‘violent face-off’ in which at least three Indian soldiers were killed. So, a little geopolitical shenanigans to add to the mix this morning but thus far nothing overly significant for the market.

Support for risk assets helped lift crude prices, with WTI for August climbing back above $37 around the middle of the range of the consolidation over the past month. Support is holding around $35 but the 200-hour moving average at $37.70.

GBP/USD bounces off lows, tests 200-day SMA

FX markets remain broadly steady with majors holding within ranges, with risk currencies supported this morning. GBPUSD has bounced firmly off yesterday’s lows at 1.2450 to test the 200-day SMA at 1.2690, which has acted as resistance and the pair has nestled back on the old comfort around 1.2630. EURUSD traded above 1.13 again as the long-term 23.6% level at 1.1230 starts to look like meaningful support to act as a base for the next leg higher.

Chart: FTSE recovery looks to get back into the channel and recover both the old 50% retracement and the 100-day simple moving average, which after last Thursday is starting to act as near-term resistance. Thursday’s cash market opening high at 6,329 needs to be cleared to resume the uptrend.

Chart: SPX tested the old 61.8% retracement and 100-day SMA at 2936, which held. Thursday’s cash opening high at 3,123 needs to be cleared to resume the uptrend.

Stocks extend last week’s losses on second wave fears

European stocks plunged and US futures tumbled on Monday as equity markets extended last week’s losses amid fears of a second wave to the pandemic. We are seeing pockets of cases in Beijing suddenly – the first in 50 days, whilst Alabama, Florida and South Carolina have reported record numbers of new cases for three days straight.

The dreaded second wave will weigh on equity markets – it is already sparking a wave of selling – and force policymakers to chuck even more money at this. Markets just need to think things are heading in the right direction to go up; it’s the rate of change that matters, so fresh waves of cases are taken as a sell signal.  Equity markets had also clearly become overstretched and overbought.

Stocks dumped on fears of Covid-19 second wave

The FTSE 100 slumped under 6,000 to test the 50-day moving average around 5950, potentially heading for the key support region at 5900. If this goes we can easily see a retreat to the Apr swing lows around 5641 and 5575. BP shares slumped 5% as it wrote off $13.5bn-$17bn of asset values due to lower forecast oil prices – this will only raise speculation that the board will be forced into cutting the dividend sooner or later.

Asia was broadly weaker overnight, with sentiment also being affected by Chinese industrial production, fixed-asset investment and retail sales all falling short of expectations. Futures indicate the S&P 500 open around 2950, a little above the 100-day and 50-day moving averages, having broken beneath its 200-day line. Look especially at 2936/8, where the 100-day and the old 61.8% retracement of the March rout converge.

Bulls fought a rear-guard action on Friday, but that rather hard-fought rally looks capitulation and the path back to 2800 is open. What could change this? You’d need to see a drop in cases and the rebound in the economy as stimulus works its way through to consumers spending with confidence again.

As discussed last week, S&P 500 valuations are very rich and first the Covid-economy trade and now the first reopening trade are all but over, so investors need to find new reasons to buy. Second wave fears are dominating, and the Fed has killed off any last thoughts of a V-shaped recovery.

Bank of England, Brexit in focus this week for UK assets

The Bank of England will this week need to stump up another £100bn-£200bn in QE but should leave rates unchanged. It’s been painting a rather optimistic view of recovery but will need to lower expectations this week for how soon the economy gets back to normal.

On the Brexit front, Boris Johnson will hold a call with EC boss Ursula von der Leyen today in what could be a moment that injects talks with new vigour. The PM will likely threaten no-deal, but it’s hoped this will focus the attention of the EU on delivering a compromise. GBP will be exposed to significant headline risk and may partially explain the currency’s fall this morning.

FX was in risk-off mode too, with the dollar finding fresh bid. GBPUSD broke down through the 1.25 region and was last at the lows of the day with the 50-day moving average around 1.2410 in sight. EURUSD was holding at 1.1230. Crude prices were weaker as risk sentiment soured, with WTI for August trading under $35.

Chart: SPX eyes path back to 2800

الأسبوع المقبل: اجتماعات بنك انجلترا وبنك اليابان؛ بيانات تسحق الآمال بتعافٍ سريع من كوفيد.

في الأسبوع الماضي، قتلت اللجنة الفيدرالية للسوق المفتوحة عمليًا الآمال في أن الاقتصاد العالمي قد ينتعش سريعًا مما لحقه من جائحة كوفيد-19. ومن المتوقع أن تتسبب الكثير من البيانات المقرر إعلانها هذا الأسبوع في المزيد من التدهور. قد تحجب المخاوف المتنامية من أننا قد نواجه موجة ثانية من الإصابات أي نقاط مضيئة.

يعقد كلٌ من بنك إنجلترا وبنك اليابان اجتماعات السياسة هذا الأسبوع. توقع المزيد من الإشارات بأن التحفيز سيبقى لفترة طويلة.

تأكد من أنك مستعد للأسبوع القادم – اقرأ تحليلنا الكامل للأحداث والبيانات الرئيسية التي سيشاهدها السوق.

الإنتاج الصناعي يتسارع، بينما تتراجع مبيعات التجزئة إلى البطء في الصين

ما زالت الصين في ريادة التعافي العالمي، وتراقب الأسواق البيانات عن كثب لترى مدى السرعة التي يمكن لاقتصاد أن ينتعش بها بعد غلق كامل. وقد عاود الإنتاج الصناعي النمو على أساس سنوي في أبريل بعد ثلاثة أشهر من التقلص. وترجح توقعات مايو تسارع النمو إلى 5%.

من المتوقع أن تواصل مبيعات التجزئة التقلص، بالرغم من أن معدل التراجع اعتدل بشدة منذ الانخفاضات المسجلة في يناير وفبراير بنسبة -20.5%. شهد أبريل انخفاضًا بنسبة -7.5% ومن المتوقع أن يكون التراجع قد تباطأ إلى -2% في مايو.

بنك اليابان يعلن عن إطار زمني لأسعار الفائدة المنخفضة

صرحت اللجنة الفيدرالية الأمريكية للسوق المفتوحة في الأسبوع الماضي بأن معدلات الفائدة ستبقى قريبة من الصفر حتى 2022. قد يُحرِّض هذا تحركًا مماثلًا من بنك اليابان، الذي سيتطلع إلى الحد من قوة الين في رحلة الهروب إلى الأمان، التي تسببت فيها التنبؤات الاقتصادية المتشائمة للجنة الفيدرالية للسوق المفتوحة. لهذا قد يقرر بنك اليابان أن يحدد إطاره الزمني الخاص لإبقاء أسعار الفائدة عند مستوياتها الحالية أو أدنى.

تضاؤل الآمال بتعاف على شكل حرف V يُخفِّض مؤشر المزاج من ZEW

ارتفع المزاج الاقتصادي في المنطقة الأوروبية وألمانيا منذ أبريل، لكن التوقعات ترجح أن أحدث القراءات قد تشهد تراجع ثقة المستثمر مرة أخرى. تقييم الظروف الحالية في منطقة مخيفة على أي حال، لكن مجمل الأرقام كانت قد ارتفعت بتحسن التوقعات بتعاف سريع – الأمر الذي يصبح غير مرجح على نحو متزايد.

تضخم المملكة المتحدة وكندا – نمو الأسعار يبقى تحت الضغط

بذل الغلق الكامل وانهيار أسعار النفط ضغطًا كبيرًا على أسعار المستهلك. ومن المتوقع أن تُظهر بيانات التضخم لهذا الأسبوع في المملكة المتحدة وكندا المزيد من الضعف. كان معدل التضخم الأساسي في المملكة المتحدة 0.1% فقط في أبريل. وتتوقع تنبؤات بيانات كندا انخفاضًا بقيمة -0.2% هذا الشهر، بعد -0.7% مسجلة في مايو.

مبيعات التجزئة تنحدر إلى حالة من التدهور في المملكة المتحدة وكندا – هل تبدو الولايات المتحدة أكثر إشراقًا؟

من المتوقع أن تسجل أرقام مبيعات التجزئة في المملكة المتحدة وكندا هذا الأسبوع المزيد من الانخفاضات الضخمة، مع استمرار تدابير الغلق الكامل وغلق الأعمال في كبح جماح المستهلكين. وقد شهدت الأعمال القادرة على إعادة الفتح تأثر التجارة بتدابير التباعد الاجتماعي الصارمة.

شهدت كلًا من المملكة المتحدة وكندا والولايات المتحدة هبوطًا في مبيعات التجزئة في أبريل هو الأكبر على الإطلاق. أما بخصوص المملكة المتحدة وكندا، فمن المتوقع أن تسوء الأمور في مايو أكثر من هذا.

ومع هذا، ففي حالة بيانات الولايات المتحدة، ترجح آخر الأرقام من Mastercard أن التراجع في مبيعات التجزئة قد ينحصر بصورة ملحوظة في مايو. انخفضت المبيعات بنسبة -16.4% في أبريل، لكن Mastercard تقول إنها شهدت تراجعًا أقل كثيرًا في أحجام المعاملات في الشهر الماضي.

بيانات نمو نيوزيلندا: الهدوء الذي يسبق العاصفة

تمكنت رئيسة وزراء نيوزيلندا جاسيندا أردرن في الأسبوع الماضي من إعلان أنه قد تم القضاء على كوفيد-19 في البلد وأن الأمور قد تعود إلى طبيعتها.

بالرغم من هذا، فإن الضربة الاقتصادية التي نتجت عن الإجراءات التي اتخذتها الحكومة لمكافحة الفيروس كانت شديدة. تتنبأ OECD بانخفاض بنسبة -8.9% في إجمالي الناتج المحلي لهذا العام، وعدم عودة الاقتصاد إلى مستويات ما قبل كوفيد حتى نهاية 2021.

بيانات إجمالي الناتج المحلي لهذا الأسبوع تتعلق بالربع الأول، ومن المتوقع حدوث هبوط بقيمة -0.4% فقط. لكن كما نعرف بالفعل، فإن قراءة الربع الثاني هي التي تهم حقًا.

معدل البطالة الأسترالي يواصل الارتفاع

من المتوقع أن تعرض بيانات هذا الأسبوع 200،000 وظيفة أخرى فقدت في الشهر الماضي، إضافة إلى حوالي 600،000 في أبريل. قفز معدل البطالة نقطة مئوية كاملة إلى 6.2% في أبريل، بالرغم من أن هذا كان أدنى كثيرًا من توقعات السوق بارتفاع مفاجئ إلى 8.3%.

من المتوقع أن ترتفع نسبة البطالة إلى 6.9%، بالرغم من أن المعدل الحقيقي أعلى من ذلك كثيرًا على الأرجح، باعتبار عدد الأستراليين الذين يعتمدون حاليًا على الحكومة في دفع رواتبهم.

بنك إنجلترا يمدد التيسير الكمي

من المتوقع أن يمدد بنك إنجلترا برنامج تيسيره الكمي هذا الأسبوع، مع تقديرات للزيادة تتراوح بين 70 مليار إلى 200 مليار جنيه استرليني.

من المؤكد أن المعدلات السالبة سوف تُذكر، لكن صناع السياسة يقتربون من المسألة بحرص. في الوقت الذي خفف فيه الحاكم أندرو بايلي مؤخرًا من معارضته لتلك الأداة، لم يتجاوز القول بأنه سيكون من «الحمق» استبعادها. قال كبير اقتصاديي بنك إنجلترا آندي هالدين في نهاية مايو إنه بينما كانت لجنة السياسة المالية تبحث فكرة المعدلات السالبة، مكثت في مرحلة المراجعة فترة طويلة ولم يُتخذ قرار بهذا الشأن.

أرباح Kroger

من المتوقع أن تصدر Kroger تقريرًا بنمو أرباحها بنسبة 23.6% عام مقابل عام عند إصدار تقرير الأرباح الفصلية يوم 18 يونيو. من المتوقع أن تكون أرباح السهم 0.89 دولار، أما صافي المبيعات فمن المتوقع أن ترتفع بنسبة 7.7% عام مقابل عام إلى 40.12 مليار.

لقد تجاوزت أسهم Kroger جائحة كوفيد-19 بصورة جيدة، حيث انتعشت من بيع التصفية في مارس، والآن تتداول بسعر أكبر بحوالي 12% في العام. تظهر أداة توصيات المحللين الخاصة بنا أن لديها تقييم «شراء» بالإجماع. وقد اشترت صناديق التحوط 20 مليون سهم في الفصل الماضي.

Highlights on XRay this Week 

Read the full schedule of financial market analysis and training.

07.15 UTC Daily European Morning Call
09.30 UTC 17-June FXTrademark Course – Moving the Odds
11.00 UTC 17-June Introduction to Currency Trading: Is it For Me?
11.30 UTC 18-June Trading with the Killswitch Approach
10.00 UTC 19-June Supply & Demand – Approach to Trading

 

Key Events this Week

Watch out for the biggest events on the economic calendar this week:

02.00 UTC 15/06/2020 China Industrial Production / Retail Sales
01.30 UTC 16/06/2020 RBA Monetary Policy Meeting Minutes
03.00 UTC 16/06/2020 Bank of Japan Rate Decision
09.00 UTC 16/06/2020 German/EZ ZEW Economic Sentiment
12.30 UTC 16/06/2020 US Retail Sales
06.00 UTC 17/06/2020 UK Inflation Rate
12.30 UTC 17/06/2020 Canada Inflation Rate
14.30 UTC 17/06/2020 US EIA Crude Oil Inventories
12.45 UTC 17/06/2020 New Zealand Quarterly GDP
01.30 UTC 18/06/2020 Australia Employment Change / Unemployment Rate
Pre-Market 18/06/2020 Kroger (Q1) – Pre-Market
11.00 UTC 18/06/2020 Bank of England Rate Decision
12.30 UTC 18/06/2020 US Weekly Jobless Claims
14.30 UTC 18/06/2020 US EIA Natural Gas Storage
06.00 UTC 19/06/2020 UK Retail Sales
12.30 UTC 19/06/2020 Canada Retail Sales

Second wave fears weigh on risk

The dreaded second wave: Houston is weighing a new lockdown as it warns of a disaster in-waiting. Other states with large populations and economies like California and Florida are also worried about rising Covid case numbers. Across Europe the reopening continues with little to suggest of a disastrous second wave.

Stocks went into freefall yesterday as the untruths of the reopening trade got found and this particular bubble got pricked. As we discussed, fears of a second wave combined with the Fed well and truly killing off the V-shaped recovery idea.

The Dow tumbled nearly 7%, whilst the S&P 500 fell almost 6%. The forward PE multiple on the latter – which I like to track as a broad indicator of whether stocks are overbought – has retreated a touch but at 23+, it’s still rather pricey. The Vix shot above 40.

Futures indicated a little higher but I don’t fancy the chances heading into the weekend. You could say that Thursday’s tumble was basically just the Fed trade and has now played out so we need to look for new information to act as a catalyst, but the second wave fears persist.

European stocks volatile on the open

European stocks also got whacked and were extremely volatile in the first hour of trading on Friday as the bulls and bears pull either end of the rope.  The bears were winning at time of writing. We do seem to be at a key moment as the market makes up its mind – are we due a proper retracement of the recent rally or is this just a normal pullback before resumption of the trend higher. I would tend to favour the former.

The good news for the likes of the FTSE is that it’s underperformed since the March trough, versus its US counterparts. It’s also got an appealing dividend yield, despite some very noteworthy cuts and the prospect of BP likely needing to cut its pay-outs. From a technical point of view there seems to be strong support just a little below where it’s currently trading.

UK posts record GDP drop in April

ONS data shows the UK economy declined over 20% in April, the worst decline on record. It’s backward-looking of course, but it underlines how much of a recovery is required to get back to normal. The slow lifting of restrictions – pubs and cafes are still not open – means the UK may endure a wider bottom than many others, making recovery all the slower. All this before the jobs Armageddon this autumn when furlough support ends.

Chart: FTSE 100. The index has broken out of the channel on the downside. The three black crows candle pattern signal weakness and when combined with the bearish MACD crossover in overbought levels, suggest a pullback is not done yet. There is decent support around the previous Fib support level and the 50-day simple moving average in the 5800-5900 region.

Chart: S&P 500. The broad index closed at the lows, but bulls will be looking for the 200-day moving average around 3020 to hold. The area around 2975 at the bottom of the channel still looks appealing and if breached could act as a gateway to 2800. Another bearish MACD crossover in overbought levels signal weakness and a retrace of some of the recent rally.

Oil fell with other risk assets. WTI for August has moved back to test the $35 support level, with a potential retreat to the $31.50 area next if the trend continues. A bearish MACD crossover is again evident, signalling weakness.

Stocks come off highs but optimism reigns, OPEC agrees cut

German and Chinese data is taking the gloss a little off Friday’s US jobs report, but the overriding sense in stock markets remains one of remarkable optimism. Speaking of which, pubs in England could reopen by Jun 22nd.

Stock markets surged last week and completed Friday by breaking through more important levels after a very strong jobs report from the US. The nonfarm payrolls report showed the US economy added 2.5m jobs in May, after more than 20m were lost the previous.

This was taken as a reason to buy stocks as it handsomely beat forecasts of 8m jobs being lost. The S&P 500 is now down just 1% for the year and trades with a forward price-to-earnings ratio of more than 23.

The report was of course hailed as a signal of American greatness – the biggest comeback in history, according to Donald Trump – and the White House even suggested it meant less support may be needed for the economy: ‘There’s no reason to have a major spending bill. The sense of urgent crisis is very greatly dissipated by the report,’ said the president’s economic advisor Stephen Moore.

Cue the Federal Reserve this week which needs to keep up the ‘whatever it takes’ mantra – does it see concern in the recent rise in Treasury yields that it needs to lean on, or will it take their recovery as a sign of optimism?

NFP boosts stocks, but recovery will still take a long time

I would like to make three points on this jobs report.

One, an unemployment rate of 13.3% is still very, very bad – 18m jobs lost over two months and a continuing weekly claims count on the rise.

Two, this was the easy bit as furloughed workers came back to their jobs as soon as they could – this seemed to happen a little quicker than had been expected but was, in itself, not the surprise. The tough part is not the immediate snap back in activity once restrictions lift, but recovery to 2019 levels of employment and productivity, which will take much, much longer.

Three, the data itself is flawed. There have been classification errors, so the real rate of unemployment may be much higher, whilst the response rate to the survey was a lot lower than usual.

Treasury yields and stocks surged – the S&P 500 went above 3200 before closing at 3193, whilst 10-year yields drove to 0.94%. Gold pulled back to its weakest level in a month.

China trade data, German industry output weigh on European stock markets

European stock markets opened lower on Monday, pulling back marginally from Friday’s peaks as Chinese trade data and German industrial production numbers weighed. China’s exports fell 3.3% year-on-year in May, whilst imports declined 16.7%.

German industrial plunged 18% last month, the biggest-ever decline.  But there is little sign risk appetite has really slackened. The FTSE 100 looks well supported now above 6400, having closed the all-important March 6th-9th gap. The DAX looks well supported at 12,700.

Crude oil gaps higher after OPEC meeting

Crude prices gapped higher at the open after OPEC+ agreed to extend the deepest level of production cuts by another month and Saudi Arabia followed this by hiking its July official selling prices by around $6, more than had been expected.

A deal among OPEC and allies, confirmed on Saturday, had already been all but announced last week. WTI (Aug) pushed up above $40 but gains have been capped with this agreement being all but fully priced.

The question will be whether there is appetite among members to extend cuts again. Those countries that have not complied with quotas in May and June will need to make up the difference in July, August and September.

Higher oil prices will encourage US shale producers to reopen taps, whilst it is unclear how well demand is coming back despite lockdown restrictions being lifted around the world.

الأسبوع المقبل: توقعات مرتفعة لاجتماعات اللجنة الفيدرالية للسوق المفتوحة وأوبك

حيث إن الأمر أصبح معتادًا، يمكن أن نتوقع كمًا كبيرًا من البيانات الاقتصادية السيئة خلال الأسبوع القادم. سننظر إلى الأرقام بحثًا عن دلائل عن المدة التي قد يستغرقها التعافي الاقتصادي، وأيضًا عما إذا كانت توقعات الانهيار المتوقع في الربع الثاني تبدو سيئة بما فيه الكفاية.

ستراقب أسواق السلع اجتماع أوبك عن كثب، بالرغم من أن العناوين الأخيرة ترجح أن المتداولين قد يصابون بخيبة أمل. يمكن أن تعيد اللجنة الفيدرالية للسوق المفتوحة توقعاتها الاقتصادية، وقد تقدم أيضًا مزيدًا من الوضوح بشأن تطلعات السياسة مع تحول نحو توجيه مسبق ضمني.

ما الذي يمكن لبيانات الثقة أن تخبرنا إياه فيما يتعلق بالتعافي في مرحلة ما بعد كوفيد؟ 

ما زال المتداولون والاقتصاديون والأعمال وصانعو السياسة من جميع أنحاء العالم في حالة عدم يقين حول الشكل الذي سيتخذه التعافي في مرحلة ما بعد الغلق. ما زال الكثيرون يأملون في انتعاشًا حادًا، إلا أن هذا يبدو غير محتمل.

وسط حالة عدم اليقين هذه، يمثل مزاج الأعمال والمستهلك مؤشرًا مفيدًا حول شعور الناس على الأرض تجاه طريق المستقبل. كانت استطلاعات الرأي شديدة التشاؤم بصورة لا تدعو إلى الاستغراب حتى الآن.

لكن الاقتصادات يعاد فتحها، وتدابير الغلق تُخفف، وبعض مظاهر الحياة الطبيعية تعود للناس في العديد من البلدان. هل تُرجم هذا الأمر إلى تطلعات إيجابية، أم أن اتخاذ الخطوة الأولى أبرز كم تبقى من المسافة التي ينبغي علينا قطعها في طريق التعافي؟

هل تمدد أوبك خفض الإنتاج القياسي؟ 

أصيبت أسواق النفط بإحباط في الأسبوع الماضي حين قرر أعضاء أوبك عدم تقديم اجتماعهم إلى ما قبل 9 يونيو. وقد أفادت التقارير في بداية هذا الأسبوع بأن التكتل كان ينظر في تمديد خفض إنتاجه القياسي لعدة أشهر، إن لم يكن إلى نهاية العام.

لقد دعمت هذه الآمال النفط ليرتفع سعره، لكن النفط الخام ونفط برنت تُركا بلا توجه قرب نهاية الأسبوع حين أصبحت التطلعات أقل إيجابية. في النهاية، يبدو أن المملكة العربية السعودية وروسيا ستتفقان على الأرجح على تمديد خفض الإنتاج القياسي لشهر واحد، بدلًا من التدريج بدءًا من يوليو. ومع هذا، فإن التوترات حول عدم امتثال بعض أعضاء التكتل تزيد من الشكوك حول احتمال التوصل إلى اتفاق.

بيانات التضخم الأمريكية – هل الانكماش المستدام في الطريق؟ 

ستصدر بيانات التضخم الأمريكية هذا الأسبوع. كانت العناوين مذهلة مؤخرًا، فقد شهد شهر أبريل أكبر هبوط في نمو الأسعار منذ ديسمبر 2008، وسجل التضخم الأساسي أضخم هبوط منذ بدأ سلسلة البيانات عام 1957.

لن يقلق صناع السياسة كثيرًا بسبب شهر واحد من الهبوط الحاد في الأسعار، لكن القلق الكبير هو أن ندخل في فترة ممتدة من الانكماش. معدلات الفائدة عند أدنى مستوياتها بالفعل، لكن قراءة أخرى دون الصفر لنمو الأسعار قد تشهد تشكك الأسواق حول المدة التي يمكن للجنة الفيدرالية للسوق المفتوحة أن تترك الأمور فيها قبل أن تدفع المعدلات نحو قيمًا سالبة.

اجتماع اللجنة الفيدرالية للسوق المفتوحة – الأسواق تتطلع إلى توقعات اقتصادية وتوجيه مسبق 

تعلن اللجنة الفيدرالية للسوق المفتوحة عن أحدث قرارات سياستها يوم الخميس.

ستأمل الأسواق في المزيد من التوجيه من اللجنة الفيدرالية للسوق المفتوحة هذه المرة. فقد فشل اجتماع أبريل، والمحاضر اللاحقة له، في تقديم أي شكل ملموس لكيفية تطور السياسة النقدية في المستقبل للاستجابة للظروف الاقتصادية المتأزمة. وقد ناقش الأعضاء تحديد أهداف للبطالة والتضخم، وأيضًا تحديد تاريخ لن ترفع المعدلات قبله.

سنشهد على الأرجح عودة موجز التوقعات الاقتصادية؛ الذي أُغفل في مارس، بسبب أن تطلعات الاقتصاد كانت غامضة بشكل يصعب استحضاره في ذلك الوقت. سيمنح هذا، بالإضافة إلى التحرك نحو التوجيه المسبق الضمني، الأسواق صورة أكثر دقة للسياسة الفيدرالية وهي تمضي قدمًا.

بيانات النمو والإنتاج للملكة المتحدة تشكل توقعات الربع الثاني 

كم كبير من بيانات المملكة المتحدة لشهر أبريل سيعطينا لمحة عن أداء الربع الثاني المخيف. من المسلم به أن هذا الربع سيكون وخيمًا، لكن أرقام الإنتاج وإجمالي الناتج المحلي الشهرية ستُظهر ما إذا كانت سيناريوهات أسوأ حالة متشائمة بما يكفي.

من المتوقع أن يهبط إجمالي الناتج المحلي في فترة ثلاثة شهور تنتهي في أبريل بنسبة -12% منخفضًا من -2% في أبريل. ومن المتوقع أن ينخفض النمو على أساس شهري بنسبة -24%، بينما سيكون الانخفاض في النمو سنة مقابل سنة حول -29%. على الأرجح انخفض الإنتاج الصناعي بنسبة -30% تقريبًا. نحن في خضم ما يفترض أن يكون أسوأ مرحلة، إلا أنه ما زال هناك أسئلة حول مدى سوء الضربة التي تعرض إليها الاقتصاد.

هل الأجواء صافية لطرح Adobe؟ 

مع نهاية موسم الأرباح، يبدو تقويم الشركات خاويًا بلا جدال، بالرغم من أن Adobe قد تظهر أمورًا مثيرة للاهتمام.

برنامج الشركة سحابي، يمنح راحة كبيرة للكثير من الأعمال التي تعتمد عليه لكن موظفيها عالقون في منازلهم بعيدًا عن حواسيب عملهم. حقيقة أن منتجاتها تباع وفق نموذج اشتراك قد تساعد على إبقاء العائد مستقرًا نسبيًا، بالرغم من أن Adobe ستصدر على الأرجح تقريرًا بتضرر الأعمال خلال هذا الربع مثل أغلب الشركات.

تسليط الضوء على XRay هذا الأسبوع

اقرأ كامل الجدول الزمني لتحليل السوق المالي والتدريب عليه.

07.15 UTC Daily European Morning Call
17.00 UTC 08-June Blonde Markets
From 15.30 UTC 09-June Gold, Silver, and Oil Weekly Forecasts
17.00 UTC 10-June FOMC Preview with chief market analyst Neil Wilson
14.45 UTC 11-June Master the Markets with Andrew Barnett

الأحداث الاقتصادية الأساسية

أحترس من أكبر الأحداث على التقويم الاقتصادي هذا الأسبوع:

06.00 UTC 08-Jun German Industrial Production
08.30 UTC 08-Jun Eurozone Sentix Investor Confidence
01.30 UTC 09-Jun AU NAB Business Confidence
09.00 UTC 09-Jun Eurozone Final Employment Change / Revised GDP (Q/Q)
00.30 UTC 10-Jun Westpac Consumer Sentiment
01.30 UTC 10-Jun China CPI
12.30 UTC 10-Jun US CPI
14.30 UTC 10-Jun US EIA Crude Oil Inventories
18.00 UTC 10-Jun FOMC Rate Decision
18.30 UTC 10-Jun FOMC Press Conference
Pre-Market 10-Jun Dollarama – Q1 2021
12.30 UTC 11-Jun US Unemployment Claims
14.30 UTC 11-Jun US EIA Natural Gas Storage
After-Market 11-Jun Adobe – Q2 2020
06.00 UTC 12-Jun UK GDP (M/M), Manufacturing/Industrial Production (M/M), Construction Output (M/M)
14.00 UTC 12-Jun Preliminary University of Michigan Sentiment Index

Stocks weaker as US continuing claims rise, ECB goes big

European shares held losses and Wall Street opened lower as the June rally in stocks paused for a wee breather, with tensions around Hong Kong resurfacing and US jobs data indicating a lacklustre recovery in the labour force.

The ECB seems to have passed the test today but we are still unsure on OPEC’s moves and the ensuing effects on oil prices, which could affect other risk assets. Meanwhile US jobs numbers were disappointing.

US initial jobless claims fell to 1.9m but the key continuing claims number rose 650k from last week to 21.5m, which was ahead of expectations. It’s a worry that we are not seeing this number coming down as it suggests employers are not calling their staff back as quickly as had been hoped.

Tomorrow is nonfarm payrolls day, of course, with expectations for the headline print to come in at –8m jobs but we note the ADP number yesterday was just –2.76m vs –9m expected.

Meanwhile risk sentiment looked to be a little weaker as scuffles were reported in Hong Kong as protestors try to mark the Tiananmen Square anniversary. The situation in Hong Kong and related US-China tensions remain a significant, under-appreciated tail risk for equity markets.

The S&P 500 opened about a third of one percent lower but held 3100 even as the Vix declined to take a 25 handle. After the ECB meeting the DAX tested lows of the day at 12,321 before recovering to the 12,400 support.

The ECB surprised with a slightly bigger expansion of its Pandemic Emergency Purchase Programme (PEPP) than was expected, perhaps as it saw this as a good opportunity to front load the scheme rather trying to top up later down the line as limits approach. This does provide it ample room for the rest of the year without the market chatter resurfacing about whether and when it needs to do more.

The ECB took three steps: the PEPP envelope is being widened by an additional €600bn to €1.35bn, the scheme will last at least until June 2021 and it will reinvest proceeds at least until the end of 2022. This is emergency QE forever – or at least we are in a situation where the ECB has no option but to be on a war footing just to keep the show on the road. What price peace?

Staff projections were interesting – inflation is now seen at just 0.3% in 2020 vs 1.1% expected in March before magically picking up over the next two years. May showed outright deflation in 12 of the 19 countries using the euro and the weakest HICP inflation in four years. Growth is seen –8.7% under the ECB’s baseline scenario.

Christine Lagarde said she expects a rebound in Q3 and the staff projections indicate growth bouncing back to 5.2% in 2021. But she cautioned that weaker demand will exert a longer-lasting pressure on inflation. Inflation for 2022 is seen at just 1.3%, down from 1.5%, despite this massive amount of stimulus.

This is already well short of the 2% target and of course the ECB is very good at missing its target when the stimulus as ever has decreasing marginal effects. What’s clear is that we are at the limits of monetary policy efficacy.

More interesting perhaps for the future of the EZ – Finland has just said it cannot accept the EC’s recovery package as it stands – it will be a long slog getting this budget and bailout fund approved by all members.

German bund yields reversed their earlier fall to trade flat, whilst the euro pared some of its gains after spiking through the important Fibonacci level at 1.1230, with EURUSD last at 1.1350. GBPUSD was off its lows having bounced off the 1.2510 support to move back to 1.2540.

CySEC (أوروبا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات المستثمر FSCS تصل إلى 20000 جنيه إسترليني
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • تعاملات الأسهم
  • Quantranks

Markets.com، التي تتولى تشغيلها شركة Safecap للاستثمارات المحدودة ("Safecap”) مرخصة من قبل مفوضية قبرص للسندات والتداول (CySec) بموجب الترخيص رقم 092/08 ومن قبل هيئة سلوكيات القطاع المالي ("FSCA") بموجب الترخيص رقم 43906.

FSC (العالمية)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Tradetech Markets (جزر العذراء البريطانية) ذ.م.م. المحدودة ("TTMBVI”) مرخصة من قبل لجنة الخدمات المالية في جزر العذراء البريطانية ("FSC") بموجب الترخيص رقم SIBA/L/14/1067.

FCA (المملكة المتحدة)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • تعويضات صندوق تعويضات الخدمات المالية تصل إلى 85000 جنيه إسترليني *بحسب المعايير والأهلية
  • حماية الرصيد السلبي

المنتجات

  • CFD
  • المراهنة على الهامش

Markets.com، التي تتولى تشغيلها TradeTech Alpha المحدودة ("TTA”) مرخصة من قبل هيئة السلوك المالي ("TTA") بموجب الترخيص رقم 607305.

ASIC (أستراليا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • التحقق الإلكتروني
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها Tradetech Markets (أستراليا) ذ.م.م. المحدودة ("TTMAU”) تحمل ترخيص هيئة الخدمات المالية الأسترالية رقم 424008، وهي مرخصة لتقديم الخدمات المالية من قبل هيئة الأوراق المالية والاستثمار الأسترالية ("ASIC”).

FSCA (إفريقيا)

  • يتم حفظ أموال العملاء في حسابات مصرفية منفصلة
  • حماية الرصيد السلبي

المنتجات

  • CFD

Markets.com، التي تتولى تشغيلها TradeTech Markets (جنوب إفريقيا) (ذ.م.م.) المحدودة ("TTMSA”) مرخصة من قبل هيئة سلوكيات القطاع المالي ("FSCA") بموجب الترخيص رقم 46860.

سيؤدي تحديد إحدى هذه الجهات التنظيمية إلى عرض المعلومات المتوافقة على نطاق الموقع الإلكتروني بأكمله. لمزيد من المعلومات انقر هنا