Fear on European markets for the new wave of infections. Wall Street, after the records there is proof of GDP

MILANO – Will Wall Street be able to break new records, despite the uncertainties surrounding the US exit from the pandemic? And the European stock exchanges, returning from a weak week, with the restart of activity in regimes more suited to normality will still suffer from the growth of infections in many countries of the old continent?

A hot phase is announced for the financial markets. Although many observers have remarked that for once Europe has shown itself surprisingly ready in announcing its common tools to face the economic crisis (but many others do not forget to underline that the Recovery plan is actually still on paper and will deploy the its billionaire strength over a span of several years), the last eighth of the markets definitely rewarded the American indices. The warnings that emerged from the minutes of the last Fed and ECB meetings and the worsening of trade tensions between the US and China have penalized the squares of the Old Continent the most. The Ftse Mib in Milan it has recovered from a drop of 1.7% in the last five days and the balance from the beginning of the year remains negative by 16% or more. In line with the other exchanges: Paris lost 1.34% in the week and -18.1% from the beginning of the year, Frankfurt -1% in the 5 days and -3.65% in 2020, London -1.45% in the ‘eighth and -20.43% from the beginning of the year and Madrid -2.41% in the week and -26.88% from the beginning of the year. For now, the spread has not particularly moved: it rose to 151 points in the week, against 147 a week ago and 161 at the end of 2019, while the yield on Italian ten-year bonds fell to 1.011%, against 1.056% a week ago and 1,427% at the end of 2019.

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Different speech for Wall Street, which led Nasdaq and S & P500 to new records by exploiting some positive indicators on the economic recovery and the usual driving force of the technology sector. The cover of the week has earned it Apple, first company to break through the threshold of 2 trillion in value.

The reopening of trading is expected to be volatile, with investors oscillating between the uneasy health indications also arrived during the weekend and the expectation of the data on the American GDP, which in the first reading on the second quarter had collapsed by 32.9 percent . Looking at macroenomic events, on Monday in China the anticipatory index (Conference Board) of July is expected and in the USA the Chigaco Fed National Activity index. On Tuesday there is expectation for the German GDP for the second quarter, again in Germany the data relating to investor confidence are released by the Ifo, inflation data in Japan will be released in the morning. On Wednesday in France, the consumer confidence index is published in August and the claims for unemployment benefits in July, in the afternoon the statistical and analytical agency of the United States Department of Energy (EIA) will release data on weekly oil stocks.

The events on the agenda include the 44th edition of the Jackson Hole Symposium, the annual economic policy symposium that this year will be held online from 27 to 28 August on the theme “Navigating the coming decades: implications for monetary policy”. There is expectation for the intervention of the number one of the Fed Jerome Powell, after the Fed has put pen to paper that the economic recovery is linked to the evolution of the pandemic. Since 1982 the symposium has been hosted at the Jackson Lake Lodge in Grand Teton National Park but due to the coronavirus pandemic the venue is closed. For this reason, the event will be streamed entirely with the participation of international central bankers, Federal Reserve officials, academics and private sector economists connected online.

The spotlight will also be on US GDP estimates for the second quarter in conjunction with the weekly claims for unemployment benefits and the Pending home sales index for July. On the same day, in Italy Istat disseminates the data relating to industrial turnover and orders to industry in June. The week ends on Friday with the second virtual day of the Jackson Hole Symposium. French data are also released regarding final GDP for the second quarter, preliminary inflation in August and consumption in July. In Germany, the GfK consumer confidence index is released in September and the import price index in July.

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As for Italy, there is expectation for data on consumer and business confidence (August), as well as the producer price index. Overseas, the data relating to the trade balance of goods in July, personal incomes, consumption, Personal Consumption Expediture (Pce) inflation and preliminary wholesale stocks are expected. And again, the Chicago PMI (manufacturing) index for August and the consumer confidence index (University of Michigan) will be released.


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