Weekly Market Insight

Latest Economic & Market Update 2nd September 2020

02nd September 2020

Good afternoon, it is September 2nd 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • US stocks continue to hit record levels.
  • Eurozone deflation.
  • US PMI shows increasing pace of expansion.

US stocks continued to set new record highs yesterday as the S&P500 climbed 0.75% to $3,526.65 and the Nasdaq rose 1.39% to $11,939.67. The Dow Jones Industrial Average increased by 0.76%. Zoom shares rocketed 40.78% following an earnings report which showed that the company sales jumped fourfold during Q2 and was the second-highest growth in sales among all Nasdaq 100 companies in Q2. Following five consecutive days of losses, the Bloomberg Dollar Spot Index stabilised as it climbed 0.21%. The Stoxx Europe 600 declined -0.35%.

August recorded the first period of deflation in the Eurozone since May 2016, with annual inflation falling to -0.2% down from 0.4% in July. The figures could increase pressure on the ECB to inject more stimulus into the economy as deflation concerns will prolong economic recovery. The current figure is far lower than the ECB’s target rate of 2%. The ECB is set to meet next week which may see current projections of inflation revised downwards.

Data released yesterday showed that the gradual economic recovery in the US is beginning to broaden. The Institute for Supply Management PMI increased to 56 for the month of August, up from 54.2 in July. A measure of above 50 indicates expansion. August’s reading of 56 is the highest rate of expansion since November 2018. The measure of orders reached 67.6 in August, up from 61.5 in July – the highest reading since January 2004. The data shows that economic recovery is underway and broadening, but it must be noted that although the pace of expansion has been climbing since June, it is starting from very low levels as a result of the pandemic and employment in factories still remains weak.

Best & Worst Performers of Large Cap US Stocks on Tuesday
Click the image to enlarge

Global Market Update
(as at close of markets 01/09/2020)