Investors will get a chance to see whether the global covid-19 recovery is spluttering to a halt with this week’s economic calendar.
US: Is the COVID-19 recovery stalling?
The US markets are in a weird place at the moment, with the Dow Jones repeatedly hitting its head on 28000, lacking the gumption to rebound above that level.
The focus of the week’s economic calendar is Wednesday’s flash manufacturing and services PMIs. For August, the former rose from 51.3 in July to 53.6, before being revised lower to 53.1, maintaining growth after the contractions in April, May and June.
As for the Markit services reading, at last count that stood at a more robust 55.0, revised higher from the initial estimate of 54.8, and a huge increase on July’s still shrinking 49.6.
Investors are going to be after signs that the economy is still bouncing back, rather than a short term summer boost that has stalled out after an initial wave of reopenings and the like.
Before that, Fed chair Jerome Powell makes an appearance on Tuesday, fresh off of disappointing the markets with last week’s FOMC statement (though, to be fair to Jay, he did pretty much exactly what was expected).
Thursday then sees the latest jobless claims figure, chasing a 4th consecutive sub-900k reading, before the standard and core durable goods orders numbers on Friday.
Of course, there are also the intangibles, like the market’s feelings towards the tech sector, which still hasn’t fully recovered after its blockbuster summer came crashing to a halt in early September.
More than any of these things, what would really move the market is a bipartisan covid-19 spending plan from Congress, something the Fed has been insisting is needed for months now. Yet, with the US election drawing closer and closer, it is perhaps hard to see one getting over the line…
UK: Brexit and the rise in coronavirus cases
Like the US, the UK’s data-highlight is Wednesday’s flash manufacturing and services PMIs. However, the FTSE and pound have some other things to worry about as well.
The fate of a Brexit deal is still up in the air, even if sterling has picked itself up off the floor, while the country also feels like it is shifting further towards a more substantial, perhaps even nation-wide, lockdown, something that is already troubling the hospitality and services sectors. With regards to the latter point, the number of daily cases could become of increased importance to the markets once again.
In terms of other data, there’s the Rightmove HPI on Monday, public sector net borrowing on Tuesday, and CBI realized sales on Thursday. On the corporate side of things, Kingfisher and AG Barr update on Tuesday, with Pennon Group posting on Friday.
Eurozone: Economic Data
As with elsewhere, the Eurozone week is centred around Wednesday’s flash PMIs, preceded by the region-wide consumer confidence number on Tuesday, and the German Ifo business climate reading on Thursday.
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