Coronavirus Cases Accelerate But Investors Also Focused on 2Q Corporate Earnings

July 13, 2020

Almost 2000 U.S. deaths have been attributed to Covid-19 since this time Friday, and the number of globally reported cases rose more than 600k to 13.06 million.

Stock markets are nonetheless higher as investors await the start of the second quarter earnings season. Share prices rose 2.2% in Japan, 1.8% in China, 1.7% in South Korea, 1.1% in Taiwan and 1.0% in Australia. European markets have risen so far today by 0.8-1.0% in Germany, France, Spain and Great Britain, and U.S. futures are higher, too.

Ten-year German bund, British gilt and Japanese JGB yields are up 3, 2, and 2 basis points.

WTI oil dropped 2.2% and is back below $40 per barrel, while the price of gold is 0.6% higher.

The dollar is narrowly mixed, with gains of 0.2% against sterling and 0.1% versus the yen and Swiss franc, declines of 0.5% vis-a-vis the Australian dollar, 0.3% against the euro and 0.2% relative to the peso and loonie, and no net changes against the yuan or kiwi.

Japan’s tertiary index of service sector activity recorded a fourth straight monthly drop, this time of 2.1%, and was 15.9% below the May 2019 level. That’s a much greater on-year drop than that of 2.8% registered in the first quarter.

German wholesale prices in June reversed May’s drop of 0.6% but resulted in the fifth consecutive year-on-year decrease, this time of 3.3%. Oil products again recorded a 12-month decline of more than 20.0%.

In Turkey between May 2019 and a year later, retail sales and industrial production fell by 16.7% and 19.9%. Turkey had a $3.76 billion current account deficit in May compared to a surplus of $1.07 billion a year later.

Ireland’s construction purchasing managers index jumped 32 index points to a six-month high of 51.9 in June. Such had bottomed at 4.5 in April.

Food prices in New Zealand increased 0.5% in June and were 4.1% higher than a year earlier.

In Poland‘s run-off election over the weekend, President Duda was narrowly reelected.

The June U.S. federal budget deficit will be reported today.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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