Vaccine and Treatment Hopes Spring Eternal
August 24, 2020
Faith is trumping science in guiding market thinking regarding Covid-19. My doctor recently told me not to expect to get a coronavirus vaccine for almost another year but to be very sure to get my annual flu vaccine this autumn because the ride is apt to get bumpy then. Markets, on the other hand, are responding to periodic reports of progress being made on the development of effective Covid vaccines and various treatments involving the use of plasma.
Share prices closed up 1.7% in Hong Kong, 1.1% in South Korea, 1.0% in India, 0.6% in New Zealand, 0.3% in Australia and Japan and 0.2% in China. Stock markets in Europe so far have risen today by more than 2.0% in Germany, France and Italy and over 1.0% in the U.K., Switzerland, and Spain.
Increases of 2 basis points in the 10-year German bund yield, 1 basis point in the U.S. 10-year Treasury futures yield, and 0.7% in West Texas Intermediate crude oil also reflect optimism.
The dollar opened this final week of August on a mild downbeat, sliding 0.4% against the euro and Australian dollar, 0.3% relative to the Mexican peson, Canadian dollar, Swiss franc and loonie, 0.2% versus the kiwi, and 0.1% against the yen and yuan. Dollar softness encouraged the price of gold to rise 0.5%.
Over the past 72 hours since early Friday, global Covid-19 cases and deaths climbed over 720k, and 15k, respectively. The U.S. death count went over 180,000, and the Republican Party National Convention begins today and will run through Thursday. Trump’s nomination acceptance speech will cap the event, and earlier on Thursday, Fed Chairman Powell is scheduled to reveal the findings of the Fed’s broad review of its monetary policy framework virtually at the Jackson Hole central banker symposium.
Data releases this Monday have been light.
Czech consumer confidence settled back 1.6 index points to a 2-month low of 94.4 in August. A 2020 low of 80.1 was hit in April, and August’s level is about midway between that low and last December’s reading of 110.0. Czech business sentiment rose 0.8 points to a 5-month high of 85.5, having bottomed at 71.6 in May. It’s level last December was 96.8.
Irish consumer confidence fell 3.7 index points to a 3-month low of 58.9 in August, which is 36.6 index points lower than last January’s reading. Brazilian consumer sentiment rose 1.4 points to a 5-month high this month.
Producer prices in Finland dipped 0.1% on month and fell 5.0% on year in July. PPI inflation has been negative each month this year.
Consumer prices in Singapore dropped 0.3% on month and 0.4% on year in July, marking the fourth straight negative 12-month rate of change.
Retail sales volume in New Zealand tumbled 14.6% on month and 14.2% on year in the second quarter. That was the third straight quarter in a row without a rise from its prior quarter.
In Taiwan, retail sales rose for a third straight month and by 9.1% in July, but such was only 2.5% higher than its year-earlier level. Taiwanese industrial production slipped 0.3% on month and recorded a smaller year-on-year advance of 2.65%. Taiwan’s jobless rate fell less than 0.1 percentage point to a 4-month low of 3.9% in July.
Nigerian real GDP tumbled 5.0% on quarter and 6.1% on year in the second quarter.
The Chicago Fed’s monthly National Activity Index will be reported later this morning.
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Jackson Hole Symposium, Republican National Convention
ShareThis
