Weekly Market Update: Second half kicks off to strong start despite coronavirus outbreaks
2020-07-02T16:11:20.167
US stock markets finished out the first half and commenced Q3 on a decidedly positive note this week. Encouraging data from Pfizer in an early-stage Covid-19 vaccine candidate helped to offset a drumbeat of discouraging data from the US Sunbelt and rising coronavirus infections. June ISM data topped expectations, registering its best reading in about a year, and Friday’s June employment report easily surpassed expectations across the board. The NASDAQ led by megacap FANGM names continued driving the gains for the major indices overall. Gold moved up, briefly pushing back above $1,800 before backing off post the June jobs report, and WTI crude moved back above $40. For the week, the Dow gained 3.3%, S&P rose 4%, and the NASDAQ added 4.6%.
In corporate news this week, better-than-expected earnings and guidance from Micron sparked a bid in the semis. Xilinx raised its Q1 guidance, noting stronger than expected revenues in its wired and wireless group and data center divisions which offset consumer-oriented end market weakness. Facebook saw an exodus of advertisers who are calling for the social media giant to limit hateful content shared on its platform. Tesla beat Q2 vehicle delivery projections despite coronavirus-related plant shutdowns and also overtook Toyota as the world’s most valuable automaker earlier this week. FedEx shares soared after posting solid Q4 earnings, sending UPS up in sympathy along with the transports. Google said it will raise YouTubeTV membership prices by 30% to $64.99/mo effective immediately, making cord-cutting a less financially attractive endeavor for some.
MON 6/29
*(EU) EURO ZONE JUN ECONOMIC CONFIDENCE: 75.7 V 80.0E
*(DE) GERMANY JUN PRELIMINARY CPI M/M: 0.6% V 0.3%E; Y/Y: 0.9% V 0.6%E
(US) Supreme Court rules in favor of Trump Admin, backing the President's power to fire the CFPB director
MU Reports Q3 $0.82 v $0.78e, Rev $5.44B v $5.32Be
*(CN) CHINA JUN MANUFACTURING PMI (GOVT OFFICIAL): 50.9 V 50.5E (4th straight month of expansion, 3-month high)
TUES 6/30
*(FR) FRANCE JUN PRELIMINARY CPI M/M: -0.1% V +0.3%E; Y/Y: 0.1% V 0.4%E
*(EU) EURO ZONE JUN ADVANCE CPI ESTIMATE Y/Y: 0.3% V 0.2%E; CPI CORE Y/Y: 0.8% V 0.8%E
(US) Nevada reports May casino gaming Rev $5.8M, -99.4% y/y; Las Vegas strip Rev $3.8M, -99.3% y/y
EU confirms lifting travel restrictions on 15 countries, includes China on the condition of reciprocity; travel ban for US residents remains in place (as expected)
*(US) JUN CONSUMER CONFIDENCE: 98.1 V 91.4E
(US) Dallas Fed June Texas Service Sector Outlook Survey: General Business Activity: +2.1 v -41.7 prior
(HK) China announces details of new Hong Kong security law: Crime of secession punishable by up to life in prison; Crime of subversion punishable by up to life in prison
GOOGL To raise YouTubeTV membership price to $64.99/mo, effective today (prior $50/month)
FDX Reports Q4 $2.53 v $1.42e, Rev $17.4B v $16.1Be
WEDS 7/1
(CN) China announces retaliation for US curbs on state media (in line with earlier speculation)
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT 0.00%; AS EXPECTED; expands QE bond buying from SEK300B to SEK500B
*(IT) ITALY JUN MANUFACTURING PMI: 47.5 V 47.8E (20th month of contraction)
*(FR) FRANCE JUN FINAL MANUFACTURING PMI: 52.3 V 52.1E (confirms 1st expansion in 5 months and highest reading since Sept 2018)
*(DE) GERMANY JUN FINAL MANUFACTURING PMI: 45.2 V 44.6E (confirms 18th straight contraction)
*(DE) GERMANY JUN UNEMPLOYMENT CHANGE: +69.0K V +120.0KE (3rd straight monthly rise); UNEMPLOYMENT CLAIMS RATE: 6.4% V 6.5%E
*(EU) EURO ZONE JUN FINAL MANUFACTURING PMI: 47.4 V 46.9E (confirms 17th straight contraction but highest reading since Feb 2020)
M Reports Q1 -$2.03 v -$2.03 prelim, Rev $3.02B v $3.02B prelim; not currently providing outlook; nearly all stores have reopened
(DE) German Chancellor Merkel: EU members remain far apart on issues of Recovery Fund and 7-year budget - Bundestag comments
*(US) JUN ADP EMPLOYMENT CHANGE: +2.37M V +2.90ME
*(US) JUN FINAL MARKIT MANUFACTURING PMI: 49.8 V 49.6E
*(US) DOE CRUDE: -7.2M V -0.5ME; GASOLINE: +1.2M V -1.5ME; DISTILLATE: -0.6M V 0ME
GM Reports Q2 deliveries 492.5K v 618.3K q/q; -34% y/y v -35%e
THRS 7/2
AZN.UK Oxford potential vaccine's scientist: the team has seen the right sort of immune response in AZD1222 trials; entered the Phase III clinical stage
*(EU) EURO ZONE MAY UNEMPLOYMENT RATE: 7.4% V 7.7%E
TSLA Reports Q2 vehicle production 82.3K v 102.7K q/q; deliveries 90.7K v 88.4K q/q
(US) JUN CHANGE IN NONFARM PAYROLLS: +4.767M V +3.058ME
(US) JUN UNEMPLOYMENT RATE: 11.1% V 12.5%E
(US) JUN AVERAGE HOURLY EARNINGS M/M: -1.2% V -0.7%E; Y/Y: 5.0% V 5.3%E; AVERAGE WEEKLY HOURS: 34.5 V 34.5E
(US) June ISM New York: 39.5 v 19.5 prior
