Week In Review
US equity indexes finished lower on the week. DJIA -0.7%, S&P 500 -0.2%, and NASDAQ -1.3%. Technology shares and tech-heavy NASDAQ fared the worst.
The week started with positive sentiment with an agreement on the EU Budget and Next Generation EU (NGEU) Recovery Fund out of a marathon EU Council special meeting. Read Senior Advisor Chris Marsh’s thoughts on why the EU Budget and NGEU agreements matter here. AZN and Oxford University’s potential coronavirus vaccine produced a positive immune response in a large, early stage human trial. PFE and BNTX received a USD 1.95bn order from the US government to secure 100 million doses of their potential vaccine. However, sentiment turned negative mid-week on US-China tensions with news that the US ordered China’s consulate in Houston, Texas to close and then China ordered the US consulate in Chengdu to close. In addition, US jobless claims came in higher at 1.4 million for the week ended July 18 – the first rise in nearly four months.
USD was broadly weaker (see heatmap below). EUR was supported by the positive news re agreement out of the EU Council meeting and a stronger than expected EZ PMI reading. EURUSD traded above 1.1600 – now at 1.1650. Despite not-so-constructive news on the BREXIT trade negotiation front, GBP traded above 1.2800 briefly, finishing the week higher vs. USD. Despite US equity indexes lower on the week, commodity currencies AUD, NZD and CAD were stronger and high beta SEK gained the most in the G10. CNH was impacted negatively by US-China tensions. Safe-haven FX ex-USD in demand – JPY, CHF gained. Spot gold closed at a new weekly record high. Founder Jens Nordvig comments on the USD’s bad week relative to equity performance here.
Ahead: Heavy week for US earnings releases, FOMC meeting statement and press conference, and US Q2 GDP – set for a record decline.
Select economic data releases: Sunday, July-26: Australia: RBA Kent speaks Monday, July-27: German Ifo (Jul) Tuesday, July-28: Australia CPI (Q2) Wednesday, July-29: US FOMC statement & press conference Thursday, July-30: German GDP (Q2), German unemployment change (Jul), German CPI (Jul), US GDP (Q2), US initial jobless claims, China Composite PMI (Jul) Friday, July-31: EZ CPI (Jul), EZ GDP (Q2), Canada GDP (May), US personal spending & income (Jun). Select earnings releases: FB, AAPL, AMZN, GOOG, V, GE, BA, PFE, MCD
Covid-19 Growth: US States
The heatmap shows the trend of daily confirmed coronavirus cases among US states as of July-24. The median daily case growth rate as of is 1.8%, and the median hit ratio is 6.2%. Case growth continues to moderate in Arizona, Florida, Texas and California. Missouri posted a record daily case count recently, with case growth now at 3.2% per day. Western states Montana, Idaho and Alaska now lead the nation in case growth rates. Founder Jens Nordvig discusses where the US 2nd wave is heading here.
Head of Asia Pacific, Grant Wilson in the Australian Financial Review on the big debate in Australia at the moment. Australia is set to underperform New Zealand both in terms of COVID-19 and in terms of the economy. Wilson advocated early for elimination rather than suppression.