Weekly Market Insight

Latest Economic & Market Update 3rd June 2020

03rd June 2020

Good afternoon, it is 3rd June 2020 and here is your economic and market update from BlackBee. 

Today we are going to focus on:

  • Optimism on demand continues the rally in oil prices.
  • Civil unrest in the US forces businesses to close doors again.
  • BOE measures huge increase in household savings. 

Stocks are reaching three month highs as optimism from investors of a near-term recovery takes front seat despite civil unrest, which has the potential to trigger a second wave of coronavirus outbreaks as large crowds gather in protest. International Brent Crude rose to $39.57 as OPEC and allies discussed an extension of the production cut beyond July. WTI has climbed up to $36.81 since lows of nearly -$40 in April as investors remain optimistic on demand as economies reopen.

The pandemic has seen the US measure its worst reading of retail sales on record with sales contracting by -16.4% in May. It has also seen many big name retailers, like JC Penney. filing for bankruptcy. Due to civil unrest, many US businesses that were reopening have begun to close stores once again to protect both their merchandise and property. Online retailers that have performed well through the crisis have begun to scale back operations in response to the unrest. Macy’s flagship store in Manhattan which is one of America’s largest department stores, covering an entire city block, was also looted. Target in Minneapolis was vandalised to the point the store has to be rebuilt again. Civil unrest in the US will slow economic recovery.

The Bank of England has released data showing that consumers in the UK saved money at a record rate in April. April saw the growth in savings reach over £16 billion, in comparison to an average increase of £5 billion of savings per month in the UK normally. Economic uncertainty could influence households to continue to limit or refrain from spending as lockdown measures are eased. If this is the case, an economic recovery will not be consumer driven and will be considerably slowed down.

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

Global Market Update
(as at close of markets 02/06/2020)