Weekly Market Insight

Latest Economic & Market Update 9th June 2020

09th June 2020

Good afternoon, it is 9th June 2020 and here is your economic and market update from BlackBee. 

Today we focus on:

  • Despite NBER announcing that the US entered a recession in February, US stocks erase losses for the year.
  • Data released shows largest production contraction on record in Germany.
  • France to extend unemployment scheme for up to two years.

The National Bureau of Economic Research (NBER) announced yesterday that after 128 months, the longest expansion in US history ended in February. The NBER also stated that February marked when the US slid into a recession. Despite the announcement, US stocks rallied, erasing all loses for the year and is now chasing all-time highs. The S&P500 has had a 47% rally since lows on 23rd March and is just 4.5% off all-time highs.
Data released on German industrial production for April showed a -17.9% month on month decline. Year-on-year decline was as much as -25.3%. The contraction marks the largest on record, which began in 1991. The automotive industry took the biggest hit in production in April as it declined -74.6% from March. However more frequent data such as mileage covered by trucks which is strongly connected with industrial production as economic activity requires transport services showed an increase of 6.1% in May in comparison to April, indicating economic activity is picking up.
France’s Labour Minister announced that the temporary unemployment scheme could last up to two years. Approximately 8.6 million workers in France were on the scheme at the end of April. The government plans to create a long term partial activity scheme which would allow employees to have fewer hours and be partially supported by the state. The alternative to the scheme would see people end up on unemployment benefits as businesses would be forced to let go of workers as activity slowly returns to normal levels. Such a scenario would also slow economic recovery.

Best & Worst Performers of Large Cap Stocks on Monday
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Global Market Update
(as at close of markets 08/06/2020)