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Today’s Waves – 21st August

U.S. home sales and business activity metrics rise

U.S. markets shrugged off pre-market weakness in futures to rise after the IHS Markit composite measure of orders and employment increased by 4.4 points to an 18-month high of 54.7

In other good news U.S. existing homes sales rose by 24.7% to an annualized rate of 5.86 million units, well above expectations for 5.4 0million.

On the back of this news Gold fell, while stocks, U.S. Treasuries and the U.S. Dollar all rose.

European markets falter in the face Covid-19

Markets fell in Europe as major economies France; Italy & Spain all suffer from a resurgence in novel coronavirus cases.  The recent trend is concerning, but the World Health Organization has stated that the continent should be able to fight the pandemic without reimposing full lockdowns.

The DAX was the worst performer in Europe after falling 0.51% to 12,764.80, across the board indices were down and 1-month losses now range between 3% to 7%, with Spain’s IBEX 35 down 6.84%.  At this point only the DAX is in positive territory for the year in stark contrast to North American and Asian stock markets where returns are generally positive now.

Meanwhile in the real economy retailers struggle

The retail apocalypse continues in the U.S. as S&P data now shows 44 major retailers have entered bankruptcy court in 2020.  Analysts are warning that this may only be the tip of the iceberg and the expectation is that more Chapter 7 & Chapter 11 bankruptcies will follow before the end of the year.  In the UK a number of prominent High Street brands have also been pushed into administrations with the Centre for Retail Research indicating that over 50 companies have failed with over 3,000 stores and 60,000 employees being affected in 2020

Quote of the day: “All men are created equal; but it is your own fault if you stay that way”.

Dr. Long

Biggest Bull

TSLA: The magic run for Tesla continues, after breaking $2,000 yesterday the shares were up 4.45% to trade at $2,090.96 this afternoon.  Elon Musk hold over 20 million shares and has seen his fortune increase by over $3.5bn in the past two days.  For those keeping score he is now the 4th richest person in the world.

Biggest Bear

KEYS: Keysight Technologies is one tech company that bucked the trend for higher prices.  Shares dropped by 6.48% to 96.16 as although results released today were above expectations, the company’s order book disappointed and cast doubt on future earnings.