The Crypto Daily – Movers and Shakers – July 11th, 2020

Bitcoin, BTC to USD, rose by 0.60% on Friday. Following a 2.32% slide on Thursday, Bitcoin ended the day at $9,304.6.

It was a bearish start to the day for Bitcoin. Bitcoin fell to an early morning intraday low $9,133.1 before finding support.

Finding support at the first major support level at $9,132.03, Bitcoin rallied to a late intraday high $9,324.6.

In spite of the late recovery, Bitcoin fell well short of the first major resistance level at $9,407.73.

The late recovery, however, saw Bitcoin wrap up the day in positive territory.

The near-term bullish trend remained intact in spite of the early July pullback to sub-$9,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Friday.

Binance Coin (+2.73%), Bitcoin Cash ABC (+1.00%), Monero’s XMR (+0.25%), and Tezos (+0.34%) bucked the trend on the day.

It was a bearish day for the rest of the majors.

Cardano’s ADA led the way down, with a loss of 4.63%.

Bitcoin Cash SV (-2.00%), XRP (-1.69%) Stellar’s Lumen (-0.99%), and Tron’s TRX (-2.02%) also struggled.

EOS (-0.72%), Ethereum (-0.33%), and Litecoin (-0.02%) saw relatively modest losses on the day.

In the current week, the crypto total market cap rose from a Monday low $254.55bn to a Wednesday high $274.58bn. At the time of writing, the total market cap stood at $267.03bn.

Bitcoin’s dominance fell from a Monday high 65.58% to a Thursday low 63.55%. At the time of writing, Bitcoin’s dominance stood at 64.05%.

This Morning

At the time of writing, Bitcoin was down by 0.06% to $9,299.0. A mixed start to the day saw Bitcoin rise to an early morning high $9,311.8 before falling to a low $9,294.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Bitcoin Cash SV (-0.19%), Ethereum (-0.02%), and Litecoin (-0.02%) joined Bitcoin in the red.

It was a bullish start for the rest of the majors, with Stellar’s Lumen up by 3.53% to lead the way.

BTC/USD 11/07/20 Daily Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the $9,254 pivot level to support a run at the first major resistance level at $9,375.6.

Support from the broader market would be needed, however, for Bitcoin to break out from Friday’s high $9,324.6.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of a crypto breakout, Bitcoin should break out from the second major resistance level at $9,445.6 before any pullback.

Failure to avoid a fall through the $9,254 pivot level would bring the first major support level at $9,183.6 into play.

Barring another extended crypto sell-off, however, Bitcoin should avoid sub-$9,000 levels. The second major resistance level at $9,062.6 should limit any downside.

The Weekly Wrap – Economic Data and COVID-19 Continued to Girate the Markets

The Stats

It was a relatively quiet week on the economic calendar, in the week ending 10th July.

A total of just 30 stats were monitored, following the 74 stats from the week prior.

Of the 30 stats, 20 came in ahead forecasts, with 9 economic indicators coming up short of forecast. 1 stats were in line with forecasts in the week.

Looking at the numbers, 24 of the stats reflected an upward trend from previous figures. Of the remaining 6, all 6 stats reflected a deterioration from previous.

For the Greenback, it was a 3rd consecutive week in the red. In the week ending 10th July, the Dollar Spot Index fell by 0.54% to 96.652. In the week prior, the Dollar had fallen by 0.27%.

COVID-19 updates drew greater focus, with a lighter economic calendar unable to distract the markets.

For the U.S, the daily COVID-19 numbers continued to spike to fresh highs in the week. At the end of the week, news of progress towards a successful treatment drug delivered riskier assets with support, however.

Looking at the latest coronavirus numbers

At the time of writing, the total number of coronavirus cases stood at 12,604,895 for Friday, rising from last Friday’s 11,175,074 total cases. Week-on-week (Saturday thru Friday), the total number of cases was up by 1,429,821 on a global basis. This was higher than the previous week’s increase of 1,290,881 in new cases.

In the U.S, the total rose by 399,290 to 3,285,550. In the week prior, the total number of new cases had risen by 338,384. An upward trend was evident throughout the week once more.

Across Germany, Italy, and Spain combined, the total number of new cases increased by 7,406 to bring total infections to 743,215. In the previous week, the total number of new cases had risen by 6,464.

Out of the U.S

It was a relatively quiet week on the economic data front.

Key stats included June’s ISM Non-Manufacturing PMI, May’s JOLT’s job openings, and the weekly jobless claims.

The stats were skewed to the positive, with the U.S non-manufacturing sector expanding in June.

On the labor market front, JOLTs job openings increased from 4.996m to 5.397m. More importantly, the weekly initial jobless claims rose by 1.314m in the week ending 3rd July. This was down from 1.413m in the week prior.

While the stats were positive, COVID-19 updates from the U.S were particularly dire, providing the Greenback with some support.

In the equity markets, the NASDAQ rallied by 4.01%, with the Dow and S&P500 gaining 0.96% and 1.76% respectively.

Out of the UK

It was also a relatively quiet week on the economic calendar. June’s construction PMI, 1st quarter labor productivity, and house prices were in focus.

A sharp rebound in construction sector activity was positive, with the PMI jumping from 28.9 to 55.3.

House prices also bottomed out, with news of an adjustment to stamp duty thresholds also positive for the sector.

Ultimately, however, it was Brexit chatter that provided the Pound with support in the week.

Following the curtailed talks from the previous week, the EU hinted at a willingness to compromise, raising hopes of a deal.

In the week, the Pound rose by 1.11% to $1.2622, following a 1.19% gain in the previous week. The FTSE100 ended the week down by 1.01%, with a 1.73% slide on Thursday delivering the loss.

Out of the Eurozone

It was a relatively busy week economic data front, with Germany in focus.

Germany’s factory orders, industrial production and trade data for May were in focus in the week. On Friday, French and Italian production figures caught the market’s attention.

From Germany, the stats were skewed to the negative based on forecasts. Both factory orders and industrial production rose by less than forecast.

Germany’s trade balance came in ahead of forecasts, which provided some support.

Construction figures from Germany and the Eurozone’s retail sales figures for May had a muted impact in the week.

At the end of the week, industrial production figures from France and Italy delivered a boost.

For the week, the EUR rose by 0.46% to $1.1300, following a 0.26% gain from the previous week.

For the European major indexes, it was a mixed week. The CAC30 fell by 0.73%, while the DAX30 and EuroStoxx600 saw gains of 1.15% and 0.38% respectively.

For the Loonie

It was a relatively busy week on the economic calendar.

Key stats included June’s Ivey PMI, housing data, and the all-important employment figures for June.

The stats were skewed to the positive. The Ivey PMI jumped from 39.1 to 58.2 in June. More impressively, employment jumped by 952,900 following a 289,600 rise in May.

As a result of the jump in hiring, the unemployment rate fell from 13.7% to 12.3%.

While the stats were skewed to the positive, COVID-19 jitters and a negative monthly IEA report weighed.

The Loonie fell by 0.33% to end the week at C$1.3592 against the Greenback. In the week prior, the Loonie had risen by 0.27%.

Elsewhere

It was a relatively bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 10th July, the Aussie Dollar rose by 0.16% to $0.6950, with the Kiwi Dollar rising by 0.66% to $0.6574.

For the Aussie Dollar

It was a particularly quiet week for the Aussie Dollar, with no material stats to provide direction.

While there were no stats, the RBA was in action on Tuesday, standing pat on monetary policy. This was in line with market expectations, limiting any major moves by the Aussie Dollar.

In the week, the government closed down the border between Victoria and New South Wales due to fresh new cases…The latest spread pinned the Aussie Dollar back in the week.

For the Kiwi Dollar

It was also a relatively quiet week on the economic data front.

Key stats were limited to 2nd quarter business confidence figures and June electronic card retail sales figures.

While both were Kiwi Dollar positive, there was nothing impressive to give the Kiwi a major boost.

For the Japanese Yen

It was a quiet week on the data front.

Household spending figures for May delivered more bad news early in the week. Year-on-year, household spending was down by 16.2%, following an 11.1% decline in April.

Month-on-month, spending fell by 0.1%, following a 6.2% slide in April. In contrast to other economies, consumers appeared unwilling to loosen the purse strings, which will be of concern for the government.

While the stats were negative, concerns over COVID-19 delivered the upside for the Yen in the week.

The Japanese Yen rose by 0.54% to end the week at ¥106.93 against the Greenback. In the week prior, the Yen had fallen by 0.27% against the U.S Dollar.

Out of China

It was a quiet week on the economic data front, with June inflation figures in focus.

The stats were skewed to the positive, though ultimately of little influence.

A lack of chatter from Washington and Beijing allowed the markets to move beyond the recent war of words.

Tensions over Hong Kong are unlikely to abate anytime soon, however. Positive sentiment towards an economic rebound in China drove demand for equities in the week.

News had also hit the wires in the early part of the week of a reported priority to foster a “healthy” bull market.

In the week ending 10th July, the Chinese Yuan rose by 0.95% to end the week at CNY6.9994 against the Greenback.

The CSI300 rallied by 7.55% in the week, with the Hang Seng gaining 1.40%.

European Equities: A Week in Review – 11/07/20

The Majors

It was a mixed week for the European majors in the week ending 10th July. Partially reversing a 1.99% gain from the previous week, the CAC40 fell by 0.73% to lead the way down.

The DAX30 and EuroStoxx600 reversed losses on Friday, however, to end the week with gains of 0.84% and 0.38% respectively.

It had been a bullish start to the week before the majors hit reverse.

Optimism over a swift economic recovery shifted to material concerns over a rising number of new COVID-19 cases in the U.S and beyond.

While the U.S administration remained adamant over a continued reopening of the country, the COVID-19 numbers suggested otherwise.

In the week, the WHO had also acknowledged that there was emerging evidence of airborne transmission of the coronavirus. A lack of social distancing and a continued reopening across the U.S in particular, coupled with airborne transmission sounded the alarm bells.

A bullish end to the week, however, came as the markets responded to industrial production figures from Italy and France.

The Stats

It was a relatively busy week on the Eurozone economic calendar.

Key stats included May Factory orders, industrial production and trade data from Germany. While many economies had reported sharp rebounds from the dire numbers from April, Germany’s were less impressive.

Factory orders rose by 10.4%, partially reversing a 26.2% slump in April. Industrial production rose by just 7.8% following a 17.5% slide in April. Both sets of numbers fell short of forecasts to pin back the European majors.

Germany trade figures were positive later in the week but were not good enough to ease concerns over COVID-19.

German construction numbers for June and Eurozone retail sales figures for May had little influence in the week.

At the end of the week, industrial production figures from France and Italy provided much-needed support.

In Italy, industrial production surged by 42.1% in May, reversing a 20.5% slide from April. France reported a 19.6% jump in production, which reversed a 20.6% slide from April. The recoveries were far more impressive than Germany’s that had weighed on the majors earlier in the week.

From the U.S

The stats were skewed to the positive, with the markets preferred ISM Non-Manufacturing PMI jumping from 45.4 to 57.1.

JOLTs job openings for May were also positive, rising from 4.996m to 5.397m, with initial jobless claims rising by 1.314m. This was down from 1.413m in the week prior.

Ultimately, however, the positive stats had little influence mid-week. The rising number of COVID-19 cases across the U.S suggests a possible reversal of the recent improvement in economic indicators…

The Market Movers

From the DAX, it was a mixed week for the auto sector. BMW and Volkswagen led the way, with gains of 2.26% and 3.03% respectively. Continental and Daimler ended the week with losses of 1.59% and 0.16% respectively.

It was also a bullish week for the banking sector. Commerzbank jumped by 10.35%, with Deutsche Bank gaining 5.81%.

WIRECARD AG fell by 23.01%, partially reversing a 131.21% gain from the previous week.

From the CAC, it was a mixed week for the banks. BNP Paribas and Credit Agricole rose by 1.10% and 1.49% respectively, while Soc Gen fell by 0.85%.

The French auto sector also had a mixed week, with Peugeot falling by 1.75%, while Renault gained 0.54%

Air France-KLM and Airbus ended the week down by 4.39% and by 0.27% respectively.

On the VIX Index

It was a 4th consecutive week in the red for the VIX. In the week ending 10th July, the VIX fell by 1.41%. Following on from a 20.3% tumble from the previous week, the VIX ended the week at 27.29.

Economic data from the U.S managed to support gains for the U.S majors. The weekly gains across the U.S majors came in spite of the widespread spike in new COVID-19 cases.

At the end of the week, the Dow and S&P500 found strong support on news of progress towards a successful treatment drug.

The S&P500 ended the week up by 1.76%, with the Dow and NASDAQ gaining 0.96% and by 4.01% respectively.

The Week Ahead

It’s a quieter week on the Eurozone economic calendar. Key stats include July’s ZEW Economic Sentiment figures for Germany and the Eurozone.

The Eurozone’s industrial production and trade data for May should have a muted impact on the majors in the week.

There are also finalized inflation figures that will likely be brushed aside by the markets.

On Thursday, expect the ECB’s monetary policy decision to be the main event of the week. There has been some recent discord within the ranks. This will make the ECB press conference all the more interesting…

From elsewhere

Economic data out of China, which includes 2nd quarter GDP figures, will garner plenty of attention in the week. There has been plenty of optimism over a sharp economic rebound in China. The proof will be in the pudding…

If that’s not enough, there are also trade data and industrial production and fixed asset investment figures for June to consider…

From the U.S, June retail sales and industrial production figures, together with July manufacturing sector PMIs will provide direction.

Away from the Economic Calendar

COVID-19 numbers and related news in the week will also have a material impact on the majors. If the situation worsens, expect risk appetite to wane. While news late in the week of successful treatment was positive, the latest spread does continue to jeopardize a swift economic recovery.

And, if that’s not enough, earnings season kicks off this coming week…

US Stock Market Overview – Stocks Rise Led by Financials; the Nasdaq Hits a Fresh All-time High

US stocks moved higher on Friday driven by gains in the Dow Industrials. The financials led the way. Most sectors were higher, technology bucked the trend. News before the opening bell that Gilead’s drug Remdesivir, which is a coronavirus treatment, reduces the risk of death in severely sick patients by nearly 60%. The US treasury note yield slumped to 57-basis points before rebounding into the close to settle above 60-basis points. New coronavirus cases in the U.S. rose by more than 63,000, another single-day record, as hospitals in Texas, California and other states strain to accommodate a surge of new patients. US producer prices came out weaker than expected with core intermediate goods looking the index lower. Next week the earnings season will kick off with the large US banks. JP Morgan is scheduled to release Q2 earnings before the opening bell on Tuesday.

Amazon Say Employees Must Remove Tick Tok

Amazon.com is now requiring its hundreds of thousands of employees to remove the TikTok app from mobile devices. Amazon said in a staff memo Friday that employees must delete TikTok by Friday to be able to continue accessing their email from their phones.

Producer Prices Fall More than Expected

The US producer price index (PPI) dropped 0.2% last month after rebounding 0.4% in May. Year over year through the 12-months ending June, the PPI declined 0.8%, matching May’s decrease. Expectations were for a 0.4% rise in June and a 0.2% fall in May. Excluding the volatile food, energy producers’ prices rose by 0.3% in June. The core PPI dropped 0.4% on a year-on-year basis in May, which was the largest annual decrease since 2013.

U.S. Stocks Set To Open Lower As Traders Focus On Virus Data

U.S. Reports More Than 60,000 New COVID-19 Cases For Second Day In A Row

On Thursday, the U.S. reported another record daily increase in the number of coronavirus cases. The pandemic shows no sign of slowdown and starts to put pressure on stocks which continue to trade on high levels.

Most market observers do not expect that the U.S. will implement a second full lockdown as the economy will not be able to take a second hit of this size. Still, the rising number of infected will inevitably put pressure on economic activity as consumers will stay worried about their financial position and health.

Previously, the market has mostly ignored the bad news on the coronavirus front as traders bet that monetary stimulus will continue to provide support for asset prices.

Today, S&P 500 futures are losing some ground in the premarket trading session but it remains to be seen whether stocks will finish the day in the red zone as many traders are focused on buying any pullbacks.

U.S. – China Relations Continue To Deteriorate

The U.S. has sanctioned high-ranked Chinese officials due to alleged human rights abuses against Uighur minority in China.

China has already stated that it will introduce counter-measures against the U.S. China did not provide any details about such measures.

U.S. – China relations are in a clear downtrend which may pose risks for the world economic recovery if countries start to implement more serious measures against each other. For now, the announced sanctions will have no impact on global trade.

WTI Oil Dips Below The $40 Level

Yesterday, I wrote that trading in a tight range was not typical for a volatile commodity like oil. Apparently, some traders lost patience waiting for an upside breakout, and oil declined below the important $40 level.

At this point, oil did not develop significant downside momentum. Currently, it trades near the $39 level. If the downtrend accelerates, oil-related stocks will decline to lower levels, putting additional pressure on S&P 500.

The next few trading sessions will show whether oil has sufficient support below $40. Without such support, oil may soon find itself closer to the 50 EMA at $36.

For a look at all of today’s economic events, check out our economic calendar.

Healthcare Could Be Silver Bullet for Walmart in Long Term; Target $140: Morgan Stanley

Walmart Inc, an American multinational retail corporation that operates a chain of hypermarkets, has recently moved into the healthcare space with its own insurance business which could be a ‘silver bullet’ for the world’s largest retailer over the long-term, according to Morgan Stanley.

Walmart on July 8 revealed that it has created an insurance company named ‘Walmart Insurance Services LLC’ to sell Medicare insurance with its groceries and clothing, starting from August.

“There is scant detail around Walmart’s overarching health strategy aside from the fact that it wants to improve access to, and reduce the costs of, healthcare in the US. From that perspective, a multi-pronged approach makes a lot of sense and recent steps are clear indications this is what Walmart is pursuing. We don’t know if/how Walmart plans to directly monetize CareZone, or the details of its pricing/distribution strategy in relation to selling health insurance,” Morgan Stanley’s analysts wrote.

In June, Walmart bought CareZone’s medication management technology and intellectual property, in a move to strengthen its digital health presence. The largest retail corporation owns four health centres in the United States, which provides counselling and dental care to its customers at a low price – annual checkup for $30 or a strep test for $20.

“These two initiatives are certainly going to be immaterial to Walmart’s P&L in the near- to medium-term. However, its huge customer base and a gigantic market opportunity to reduce inefficiencies make Walmart’s deeper foray into healthcare sensible, in our view. We expect to see its suite of initiatives grow over time,” analysts added

Morgan Stanley target price is $140 with a high of $180 under a bull scenario and $100 under the worst-case scenario.

“Comps accelerate to +MSD-HSD led by continued Grocery strength. Sustainable U.S. e-comm growth of 50-60%+ behind click & collect momentum and traction with long-tail assortment. PhonePe gains wider market appreciation, driving incremental multiple expansion,” Morgan Stanley highlighted as upside risks to Walmart.

“E-commerce losses begin to rise again after briefly moderating. U.S. e-comm growth slows to <30% (comps <2%). Greater than expected Flipkart losses,” Morgan Stanley highlighted as downside risks to the world’s largest retailer.

Twenty-three analysts forecast the average price in 12 months at $138.15 with a high forecast of $150.00 and a low forecast of $120.00. The average price target represents an 8.14% increase from the last price of $127.75, according to Tipranks. From those 23, 19 analysts rated ‘Buy’, four analysts rated ‘Hold’, and none rated ‘Sell’.

“As the lines between Retail, Healthcare & Tech blur, WMT’s growing suite of initiatives make it a sleeping giant to watch,” analysts added.

COVID-19 Drives Demand for the Dollar, with Very Little Else to Distract the Markets

Earlier in the Day:

It was another relatively quiet start to the day on the economic calendar. The Kiwi Dollar was in focus in the early part of the day.

Away from the economic calendar COVID-19 continued to be a major source of angst for the markets, as new cases surged in the U.S.

Looking at the latest coronavirus numbers

On Thursday, the number of new coronavirus cases rose by 223,514 to 12,386,140. On Wednesday, the number of new cases had risen by 222,368. The daily increase was higher than Wednesday’s rise while higher than 190,716 new cases from the previous Thursday.

Germany, Italy, and Spain reported 1,190 new cases on Thursday, which was up from 986 new cases on Wednesday. On the previous Thursday, 1,027 new cases had been reported.

From the U.S, the total number of cases rose by 61,067 to 3,219,999 on Thursday. On Wednesday, the total number of cases had increased by 62,416. On Thursday, 2nd July, a total of 48,853 new cases had been reported.

For the Kiwi Dollar

Electronic card retail sales increased by 16.3% in June, following a 78.9% jump in May.

According to NZ Stats,

By Industry, the movements were:

  • Durables, up NZ$310m (24%), with consumables up NZ$205m (11%).
  • Motor vehicles (excl. fuel) rose NZ$45m (26%), while spending on fuel fell NZ$84m (15%).
  • Spending on apparel rose NZ18m (5.7%), while spending on hospitality fell NZ$74m (7.3%).

In more detail:

  • Monthly spending on medical and other health care services reached a record high in Jun-20. Spending jumped by 20% from Jun-19.
  • Spending at restaurants, cafes, and takeaway was nearly back to pre-COVID-19 levels, while down by 2.4% on Jun-19.
  • Pent up demand led to a further rise in spending on long-lasting goods. Furniture, electrical, and hardware retailing was up by 27% from Jun-19.

The Kiwi Dollar moved from $0.65703 to $0.65691 upon release of the numbers. At the time of writing, the Kiwi Dollar down by 0.26% to $0.6553.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.11% to ¥107.08 against the U.S Dollar, while the Aussie Dollar was down by 0.27% to $0.6945.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats leaves the EUR in the hands of market risk appetite on the day. With the ECB in action next week, COVID-19 and geopolitics will be key drivers early on in the day.

At the time of writing, the EUR was down by 0.06% to $1.1278.

For the Pound

It’s also a particularly quiet day ahead on the economic calendar. There are no material stats due to provide the Pound with direction.

A lack of stats leaves the Pound in the hands of Brexit and market risk sentiment.

At the time of writing, the Pound was down by 10% to $1.2593.

Across the Pond

It’s also a relatively busy day ahead for the U.S Dollar. Later today, wholesale inflation figures for June are due out later today.

Barring particularly dire numbers, however, the stats should have a muted impact on the Dollar and risk sentiment.

Expect any chatter from Washington and COVID-19 updates to remain in focus.

At the time of writing, the Dollar Spot Index was up by 0.16% to 96.850.

For the Loonie

It’s a relatively busy day ahead on the calendar. June’s employment figures are due out later today. Expect the numbers to have a material impact on the Loonie, with the BoC in action next week.

Away from the economic calendar, sentiment towards the economic outlook and demand for crude will also provide direction. The IEA’s monthly report will draw attention today amidst the risk-off sentiment.

At the time of writing, the Loonie was down by 0.06% to C$1.3594 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

The Crypto Daily – The Movers and Shakers – July 10th, 2020

Bitcoin, BTC to USD, slid by 2.32% on Thursday. Reversing a 1.94% gain from Wednesday, Bitcoin ended the day at $9,248.9.

It was a bearish start to the day for Bitcoin. Bitcoin fell from an early morning intraday high $9,451.7 to a late morning low $9,374.0 before finding support.

Steering clear of the first major support level at $9,302.93, Bitcoin recovered to $9,440 levels before hitting reverse.

Continuing to fall well short of the major resistance levels, Bitcoin fell to a mid-afternoon intraday low $9,175.0.

Bitcoin fell through the first major support level at $9,302.93 before finding support.

Steering clear of the second major support level at $9,158.87, Bitcoin moved back through to $9,200 levels.

The near-term bullish trend remained intact in spite of the early July pullback to sub-$9,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a mixed day on Thursday.

Monero’s XMR (+1.87%), Stellar’s Lumen (+6.11%), and Tron’s TRX (+3.41%) bucked the trend on the day.

It was a bearish day for the rest of the majors.

Tezos led the way down, with a loss of 4.62%.

Binance Coin (-2.60%), Bitcoin Cash ABC (-1.84%), Bitcoin Cash SV (-1.44%), Ethereum (-2.07%), Litecoin (-2.25%) also struggled.

Cardano’s ADA (-0.81%), EOS (-1.15%), and Ripple’s XRP (-1.13%) saw a relatively modest loss on the day.

In the current week, the crypto total market cap rose from a Monday low $254.55bn to a Wednesday high $274.58bn. At the time of writing, the total market cap stood at $265.78bn.

Bitcoin’s dominance fell from a Monday high 65.58% to a Thursday low 63.55%. At the time of writing, Bitcoin’s dominance stood at 63.93%.

This Morning

At the time of writing, Bitcoin was down by 0.14% to $9,235.8. A bearish start to the day saw Bitcoin fall from an early morning high $9,248.9 to a low $9,226.5.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was also a bearish start to the day.

Stellar’s Lumen led the way down, early on, with a loss of 4.03%.

BTC/USD 10/07/20 Daily Chart

For the Bitcoin Day Ahead

Bitcoin would need to move through the $9,292 pivot to support a run at the first major resistance level at $9,408.73.

Support from the broader market would be needed, however, for Bitcoin to break back through to $9,400 levels.

Barring an extended crypto rally, the first major resistance level and Thursday’s high $9,451.7 would likely cap any upside.

In the event of a crypto breakout, Bitcoin should break through to $9,500 levels before any pullback. The second major resistance level sits at $9,568.57.

Failure to move through the $9,292 pivot level would bring the first major support level at $9,132.03 into play.

Barring another extended crypto sell-off, however, Bitcoin should avoid sub-$9,000 levels. The second major resistance level at $9,015.17 should limit any downside.

European Equities: COVID-19 and Geopolitics in Focus

The Majors

It was a 3rd consecutive day in the red for the European majors on Thursday. The CAC40 fell by 1.21%, with the DAX30 and EuroStoxx600 declining by 0.04% and 0.77% respectively.

Rising COVID-19 cases across the U.S continued to weigh on demand for riskier assets.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Thursday. Germany’s trade data for May were in focus ahead of the European open.

According to Destatis, Germany’s trade surplus widened from €3.4bn to 7.6bn in May. Economists had forecast a widening to €5.2bn.

  • Exports increased by 9.0% in May, partially reversing a 24% slump in April. Economists had forecast a 13.8% rise.
  • Imports rose by 3.5%, following a 16.6% slide in April. Economists had forecast a 12% rise.

Compared with May 2019

  • Germany exported goods to the value of €42.4bn (-29.0%) to EU member states.
  • Exports to Eurozone member states fell by 29.1% to €29.9bn.
  • Germany exported goods to the value of €37.7bn (-30.5%) to countries outside of the EU.
  • Germany imported goods to the value of €38.4bn (-25.2%) from EU member states.
  • Imports from Eurozone member states fell by 25.2% to €26.7bn.
  • Germany’s imports from non-EU countries fell by 17.5% to €34.8bn.

From the U.S

The all-important weekly jobless claims figures were in focus late in the European session. In the week ending 3rd July, initial jobless claims rose by 1.314m. While this was better than a forecasted 1.375m and previous week 1.413m, it was still sizeable.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Continental and Daimler fell by 1.31% and by 2.73% to lead the way down. BMW and Volkswagen saw more modest losses of 0.74% and 0.09% respectively.

It was also a bearish day for the banks. Deutsche Bank fell by 1.99%, with Commerzbank sliding by 4.42%.

WIRECARD AG led the way down with a 9.19% slide coming off the back of a 15.53% tumble from Wednesday.

From the CAC, it was another bearish day for the banks. Soc Gen slid by 3.57%, with BNP Paribas and Credit Agricole falling by 2.31% and 2.33% respectively.

The French auto sector saw yet more losses, with Peugeot and Renault declining by 2.28% and by 1.91% respectively.

Things were no better for Air France-KLM and Airbus SE which fell by 2.26% and by 3.96% respectively.

On the VIX Index

It was back into the green for the VIX on Thursday. Following a 4.59% fall from Wednesday, the VIX rose by 4.20% to end the day at 29.26.

COVID-19 did the damage on Thursday, which overshadowed the better than expected jobless claims figures.

The S&P500 and Dow fell by 0.56% and by 1.39% respectively, while the NASDAQ rose by 0.53%.

VIX 10/07/20 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.

A lack of stats will leave the majors in the hands of geopolitics and COVID-19 at the end of the week.

On Thursday, this optimism had wavered as new COVID-19 cases continued to rise across the U.S. A similar trend from Thursday will be another test for the bulls.

From the U.S

It’s also a relatively quiet day on the economic calendar, with wholesale inflation figures for June due out later today.

We don’t expect the figures to have any influence on the majors on the day, however.

The Latest Coronavirus Figures

On Thursday, the number of new coronavirus cases rose by 213,647 to 12,376,273. On Wednesday, the number of new cases had risen by 222,368. The daily increase was lower than Wednesday’s rise while higher than 190,716 new cases from the previous Thursday.

Germany, Italy, and Spain reported 1,190 new cases on Thursday, which was up from 986 new cases on Wednesday. On the previous Thursday, 1,027 new cases had been reported.

From the U.S, the total number of cases rose by 59,638 to 3,218,570 on Thursday. On Wednesday, the total number of cases had increased by 62,416. On Thursday, 2nd July, a total of 48,853 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the Dow was up by 117 points.

For a look at all of today’s economic events, check out our economic calendar.

US Stock Market Overview – Stocks Close Mixed as Nasdaq Continues to Rally

US stocks were mixed on Thursday as the Nasdaq continue to rally but the Dow and S&P 500 declined. Most sectors in the S&P 500 index were lower, led down by declines in Energy and Financials, technology shares bucked the trend. Amazon continued to rip higher rising 3%, after initially falling early in the trading session. As concerns over the reclosure of some states economies rise, Amazon has continued to outperform. Jobless claims came out better than expected showing that the US jobs market is stabilizing. Stocks declined mid-day following a ruling from the US supreme court that will allow the Manhattan DA to enforce a subpoena for criminal activity.

Jobless Claims Rise Less than Anticipated

The Labor Department reported that weekly jobless claims were lower than expected last week. Claims for the week ended July 4 totaled 1.314 million, compared with the 1.39 million expected. The total marked a decrease of 99,000 from a week earlier. The four-week moving average of claims, fell 14,000 to 1.43 million. Continuing claims fell sharply, dropping 698,000 from a week earlier to 18.06 million. The previous week’s total itself was revised down by 530,000. Wall Street had been expecting 18.9 million continuing claims.

Court Say Trump Documents Must Be Released for Criminal Activity

The Supreme Court announced on Thursday that the New York district attorney could enforce a subpoena for President Trump’s financial and tax records. They also reported that the decision to allow Congress access needed to be returned to a lower court.  The decisions at the supreme course were both on 7-2 votes on Thursday send the cases back to lower courts, where Mr. Trump can raise additional objections to the subpoenas. The rulings put off, likely until after the November election, the attempts to explore Mr. Trump’s finances.

A Market Too Easy to Please… Even 1.3m in New Jobless Claims is Positive!

Is there anything that cone knock the bulls off of their perch?

It wasn’t long ago that the markets would fret over initial jobless claims approaching anywhere near 300,000.

In the week ending 3rd July, initial jobless claims increased by 1.314m, following a 1.413m rise in the week prior. Why the elation? Well, because economists had forecast a rise of 1.375m. Or because claims fell back to sub-1.4m levels.

Either way, the rise was still significant when considering the sheer number of jobs added in May and June.

It was interesting watching Trump’s unscheduled press conference that came off the back of June’s NFP numbers.

The media were more fixated on the weekly jobless claims figures. Mnuchin had suggested that, while getting a media grilling, a lag was to account for the anomaly.

Today’s stats suggest that the markets should have some concern over the continued unprecedented increases in claims.

One has to begin to wonder what it will take to give the baton back to the bears.

Riskier assets continue to ignore disappointing data. More importantly, the markets appear hell-bent on ignoring the recent jump in new COVID-19 cases.

This continued rise in jobless claims and new COVID-19 cases across the U.S must be a major concern.

It is hardly surprising that the U.S administration is attempting to spin the narrative. After all, Trump has very little chance of a 2nd term if the polls are anything to go by.

U.S Political Anarchy

Perhaps it will take state governors to rebel against the wishes of the U.S President to wake markets from their zombie-like climb to towards new record highs.

But even then, the markets seem unperturbed by Joe Biden’s commanding lead in the Presidential Election Polls.

The U.S President has even attempted to show muscle by sending aircraft carriers to the South China Sea.

Not even such a demonstration of force led to any major stress…

At some point, however, Trump is going to need to get out the big guns. Blaming China for the pandemic has fallen on deaf ears.

The country’s acknowledgment of and the rise in the Black Lives Matter movement showed the administration’s detachment.

Trump’s desperation to reopen the U.S economy in time to see some form of an economic recovery was and remains alarming.

It is relentless. Granted, central banks are printing money like it is going out of fashion, so why not jump in.

But…

The U.S States Hit Pause

Reports continue to hit the news wires of U.S states seeing record rises in new COVID-19 cases. Worse yet, the most populous states are reporting healthcare systems at breaking point.

If reports are accurate that there is now airborne transmission, it is just going to get worse.

There is absolutely no cause for the blaming of Beijing or other governments for the spread of the virus across the U.S.

At some point, will the markets blame the U.S administration? As things stand, they may have. Perhaps if Trump begins to narrow the gap in the polls the markets will begin to fret…

The Week Ahead

Economic data has been on the quieter side this week. It’s a different story next week. If we see any weakening in the economic indicators the markets will need to pay attention.

Will corporate America attempt to put a positive spin on things as earnings season kicks off?

Trump may have whispered in a few ears in recent weeks just to ease some of the pain. And then, if analysts feel generous, it could even end up being market positive… After all, many are more interested in actual versus forecast. Let’s not even talk about forward guidance that should be vaguely gloomy at best.

Asia-Pacific Indexes Up Across the Board Led by Gains in China

The major Asia-Pacific stock indexes were higher on Thursday, led by fresh gains in China. European shares are also rising following a two-day setback. The price action indicates that investors are looking past simmering U.S.-China tensions and renewed coronavirus lockdowns to upcoming company earnings, hoping that global stimulus efforts will yield upbeat outlooks.

On Thursday, the Nikkei 225 Index settled at 22529.29, up 90.64 or +0.40%. Hong Kong’s Hang Seng Index finished at 26210.16, up 80.98 or +0.31% and South Korea’s KOSPI Index closed at 2167.90, up 9.02 or +0.42%.

China’s Shanghai Index settled at 3450.59, up 47.15 or +1.39% and Australia’s S&P/ASX 200 Index finished at 5955.50, up 35.20 or +0.59%.

COVID-19 Update

The number of cases in the U.S. surpassed the 3 million mark, according to Johns Hopkins University. As cases and deaths rise, data compiled by Apple Maps shows driving activity is slowing down across the country, which could be a warning sign for the economic comeback.

Globally, more than 11.88 million people have been infected while at least 545,398 lives have been taken, according to data compiled by Johns Hopkins University.

China Reports Inflation Data

In fresh inflation data out of China early in the session, the country’s producer price index was down 3% year-on-year in June, compared to expectations for a 3.2% decline according to analysts polled by Reuters.

The consumer price index, meanwhile, fell in line with Reuters-polled expectations, rising 2.5% year-on-year for the month.

Australian Share Market Closes Higher

The Australian share market closed higher, after shares in Afterpay led a rally among tech stocks, while mining and energy stocks also boosted the market.

Mining and energy stocks led the broad-based rally. Technology shares surged, led by buy-now, pay-later operators Afterpay and Zip Co.

Corporate News

Rio Tinto said more than 2,000 jobs would go in New Zealand, as it announced plans to close its aluminum smelter in the country because of high power prices.

Meanwhile, Afterpay shares hit a fresh record high above $75 following an upgrade from Morgan Stanley. Analysts there raised their price target on the stock to $101, saying the company’s latest earnings were much stronger than expected.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Higher As Continuing Jobless Claims Report Beats Expectations

Initial Jobless Claims Decline To 1.31 Million

The U.S. has just provided new Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims declined from 1.41 million to 1.31 million. Analysts projected that Initial Jobless Claims would total 13.75 million.

Continuing Jobless Claims report was much better than expected as Continuing Jobless Claims declined to 18.1 million compared to analyst estimates of 18.95 million.

The decrease in Continuing Jobless Claims supports the thesis that the U.S. economy is rebounding faster than previously expected.

Not surprisingly, S&P 500 futures are gaining ground in the premarket trading session after the release of these reports, and the market looks ready to continue the upside trend.

Fed’s Bullard Believes That Unemployment Rate Will Materially Decline By The End Of The Year

Despite the recent surge in the number of new coronavirus cases in the U.S., St. Louis Fed President James Bullard thinks that Unemployment Rate will decline to 7 – 8% by the end of this year.

This optimism is based on the current momentum since Unemployment Rate has declined from 14.7% in April to 11.1% in June. Back in February, when the economy did not suffer from the coronavirus pandemic, Unemployment Rate was just 3.5%.

The road to such levels may be a long one, but a return to Unemployment Rate of 7 – 8% will be a major move forward for the U.S. economy.

Such projections from Fed officials provide additional support to stocks which continue to ignore worrisome news on the coronavirus front.

Oil Continues To Trade In a Very Tight Range Near The $40 Level

Oil stays above the $40 level for the sixth session in a row but fails to get above the $41 level. Such a tight range is highly unusual for a volatile commodity like oil.

Meanwhile, major oil stocks like Exxon Mobil, Chevron or BP are slowly trending down in absence of additional upside catalysts.

In my opinion, the quiet trading in oil cannot last much longer so oil will be ready to break out of the coming range in the upcoming trading sessions, with the corresponding impact on oil-related stocks.

For a look at all of today’s economic events, check out our economic calendar.

Did COVID Kill LNG Natural Gas Dreams?

The current minimum amount of positive figures or green shoots are swiftly removed by new depressing figures of crude oil stock volumes in USA or lower estimates of OECD and MENA region GDP figures for 2020. The total impact is still unclear, but one thing has become obvious, energy demand and supply is under pressure, but not yet balancing out the right way.

At present, the main focus when talking about energy demand destruction is on crude oil and its products. Clearly, oil is struggling, but its sister, natural gas is totally on life-support.

The Golden Age of Gas, as presented by the International Energy Agency at the beginning of the 21st Century, seems to be a very short Age, as we are now entering a possible Ice Age of Gas. Demand worldwide is fledgling, main consumer markets are showing no increased demand figures, while the future demand is in doubt.

With being promoted worldwide as the energy transition fuel, natural gas and LNG have been promoted exponentially. The world’s leading oil and gas companies, such as Shell, ENI, Total, in cooperation with national oils QP, ADNOC, Gazprom and others, all have made the ‘rational’ choice to invest in the natural gas E&P sectors from the end of the 1990s onwards.

Success seemed inevitable, as natural gas or LNG was the preferred fuel of choice.

Nobody expected however a main competitor on the horizon, US shale gas. The latter’s revolutionary capture of the global market destabilized the projected gas market fundamentals and brought price levels down substantially. Demand still grew, as prices were very competitive, but supply continued to outpace it.

Still, investments in on- and offshore gas projects kept pouring in, as seen in East Med, offshore Nile Delta Egypt, Australia and Qatar. The global gas market shook on its fundamentals. The emergence of COVID-19 however could be a major shock to its total future. At present, a long list of gas producers is filing for bankruptcy, such as US company Chesapeake and more than 200 US shale producers, or are considering a total reassessment of ongoing and future investment projects.

The Golden Age of Gas has become an Ice Age of Gas.

The latter is for sure the case for LNG projects worldwide, that are not only confronted by COVID-19 but a total out of touch with the market supply volume the coming years. Without COVID-19 the market already would have been hitting a major slump due to overproduction and sluggish demand growth.

New projected production volumes, especially in East Med, Mozambique, Brazil, Australia and even in the GCC (Qatar, Saudi Arabia, Abu Dhabi), are going to be very hard to sell at commercial price levels. Some even expect that if no real measures are being taken, and production expansion continues, major LNG and gas producers could be facing the same dark scenarios as WTI in April. Negative prices are not out of reach, if the market refuses to go to a restructuring very soon.

Non-American gas producers should understand that with oil prices hovering around $40 per barrel Brent additional shale oil and gas production will come again online. Higher price settings for crude oil and NGLs will boost US shale gas production for sure. Without increased US domestic demand the only way is out, entering the global markets.

Future investment projects in Qatar, Saudi Arabia and East Med, are facing enormous challenges. Qatar’s LNG strategy has been working for decades, proponing the Peninsula into the Ivy League of gas producers, but now could become a boomerang full of pain. The end to the Qatari production moratorium, in principle a wise choice, however has come at the wrong time. Demand for these additional volumes doesn’t exist.

The multibillion investments presented by Doha in E&P and additional LNG carriers could be a major blow to its commercial existence. The same is the case for the high-profile East Med gas adventures of Egypt, Israel and Cyprus. The continuing exploration success stories presented by Italy’s ENI, French major Total and others in Egypt or Cyprus have become a new version of a Pyrrhic victory. Giant reserves are being found, LNG production is available, but customers are hiding or retreating even. Domestic regional demand will not be enough to counter supply, while European customers can receive LNG volumes at lower prices.

This time success or a Golden Age scenario has turned into a major black hole. Investments are made, commitments are there, reserves proven but demand is down, due to a virus. Not even Asia’s gigantic markets are able to take advantage, as their own situation is also dire.

Some analysts warned already in the 1990s that the high profile transition from oil to gas producer, as stated by Shell, BP and others, could backfire. Current financials are not yet showing it in full, but profit margins of the main gas producing oil majors will be lower for a longer time. No option anymore to counter lower gas prices by higher oil margins, as they have lost a pivotal oil market position since years.

National oils, especially QP, ADNOC or its counterparts Gazprom and others, are in the same boat. Gazprom reported, as shown by Russia’s Federal Customs Service (FCS), that it being hit by lower export gas prices and volumes. FCS data show that the company’s gas export revenues in the first five months of the year plunged 52.6% to $9.7 billion, while shipments declined 23% to 73 billion cubic meters (Bcm). May’s export revenues came to $1.1 billion – which is 15% lower than April. Physical exports were down 1.7% m-o-m to 11.9 Bcm. When compared to 2019 figures, Gazprom’s May 2020’s export revenues were 61% lower and volumes were 24% down.

Going for the well-known transition fuel natural gas is currently putting these companies on a rowing boat and not anymore a speedboat. Profitability of the natural gas upstream and downstream sector has always been low, especially when looking at the crude oil hey-days. Investors now also will start to reassess their involvement.

Lower ROIs, a bleaker future than presented and a still continuing immense gas supply glut, is not something investors are happy about. Seems that IOCs and NOCs are now looking at a home-made Sword of Damocles. COVID-19 even can make it worse if major economic policies, such as the EU’s Green Deal, are going to be implemented earlier. Without even the option of being the energy transition’s fuel of choice, natural gas could be put on a slow burner for the next decade. The current bearish gas market, due to prices averaging under $2/MMBtu in 2020, no light is at the end of the tunnel.

LNG’s overall situation is even worrying, as costs are higher than commercials are offering at present.

Worldwide LNG projects are also partly doomed, as LNG price settings are either putting projects on ice or major delays of FID is to expected. Global Energy Monitor reports in its Gas Bubble 2020 report that LNG projects that are still within the pre-construction phase have experienced a “widespread pullback, including the quiet abandonment of a large number of projects.” The same report reiterated that for the period between 2014 and 2020, the failure rate for proposed LNG export terminal projects is 61%.

It also identified 29 LNG export terminal projects that have since 2014 either been delayed, cancelled, abandoned or are facing substantial challenges. The report also states that in total, companies had announced plans to build $758 billion of projects that are as yet in the pre-construction phase. But with 20 projects now in jeopardy, including nine in the United States, that planned capital outlay could be reduced by $292 billion, or 38%, if the delays persist indefinitely.

Wall Street Gains after Overcoming Mid-Session Weakness

The major U.S. stock indexes closed slightly higher in choppy trading on Wednesday, once again supported by technology shares as early signs of an economic rebound offset concern about further lockdowns due to a jump in coronavirus cases across the country.

In the cash market, the benchmark S&P 500 Index settled at 3169.94, up 24.62 or +0.82%. The blue chip Dow Jones Industrial Average finished at 26067.28, up 177.10 or +0.70% and the technology-based NASDAQ Composite closed at 10492.50, up 148.61 or 1.57%.

Quick Recap

The markets opened under pressure early Wednesday as investors stayed on the sidelines in the face of an alarming rise in coronavirus caseloads across the country that poses a risk to a recovery in business activity. However, new buying came in shortly after the opening to turn stocks higher as we approached the mid-session.

Stocks gave back those earlier gains and turned lower for the session shortly before 16:00 GMT after a senior Fed official said the central bank may slow the pace of its corporate bond purchases. This news spooked traders because the announcement by the Fed on March 23 that it would start buying corporate debt helped put in the bottom of the stock market.

Investors Rattled after Fed Official Said Central Bank May Slow Pace of Corporate Bond Purchases

According to Dow Jones Newswires that broke the story, “A senior official at the New York Federal Reserve said the U.S. central bank could slow its pace of corporate debt purchases if financial markets continued to improve.”

Daleep Singh, head of the New York Fed’s markets group, noted the functioning of corporate credit markets had strengthened since the Fed unrolled its emergency lending backstops. Still, Singh said the central bank stood ready to tweak its approach given the uncertainty around a potential wave of bankruptcies from the economic impact of the coronavirus.

The reaction in the markets was swift especially by sellers who recognize we wouldn’t have a recovery in the stock market if it weren’t for the Fed’s swift interventions that helped stabilize the financial markets.

Singh went on to insure investors that a slowing in purchases “would not be a signal that the SMCCF’s (the Fed’s corporate purchase plan) doors were closed, but rather that markets are functioning well. Should conditions deteriorate, purchases would increase.”

Corporate News

Biogen Inc jumped 6.9% in premarket trading after the company said it submitted the marketing application for its experimental Alzheimer’s disease therapy, aducanumab, to the U.S. Food and Drug Administration.

Allstate Corp slipped 2.6% as the U.S. insurer said it would buy National General Holdings Corp for about $4 billion in cash, scaling up its auto insurance business at a time when the coronavirus has crushed traffic on roads and reduced claims.

Levi Strauss & Co fell about 5% as the denim apparel maker cautioned its business would be hit in the second half of the year, even as its sales have been improving at its reopened stores.

For a look at all of today’s economic events, check out our economic calendar.

Ford Motor’s China Vehicle Sales Rebound 3% in June Quarter as Coronavirus Restrictions Ease

Ford Motor Co, an American multinational automaker, said that its vehicle sales in mainland China rebounded in the June quarter, growing 3% from the same period last year, driven by strong demand following the lifting of COVID-19 pandemic restrictions.

That would be the first time in nearly three years, the automaker has registered a rise in quarterly sales. Total of 158,589 vehicles were sold during the second quarter, representing a 3% growth year-over-year and 78.7% sales increase compared to the first quarter of 2020.

Transit commercial vehicles experienced solid y/y growth of 60.9%, as did Lincoln luxury vehicles on gains of 12.0%, the company said. In the U.S., where business has been hit hard by the coronavirus pandemic, Ford’s sales fell more than 30% during the quarter.

On the other hand, Ford’s rival, General Motors’ sales declined 5.3% during the quarter in the world’s second-largest economy. Ford’s sales plunged 26% in 2019 and 37% in 2018.

Ford outlook and price target

Eleven analysts forecast the average price in 12 months at $6.24 with a high forecast of $8.00 and a low forecast of $3.50. The average price target represents a 2.46% increase from the last price of $6.09. From that eleven, three analysts rated ‘Buy’, six rated ‘Hold’ and two rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $8 with a high of $12 under a bull scenario and $4 under the worst-case scenario. Ford Motor had its price target lifted by UBS Group from $4.30 to $6.70. UBS Group currently has a neutral rating on the auto manufacturer’s stock. JP Morgan raised the target price to $7 from $6. Ford Motor was given a $7.50 price target by analysts at Jefferies Financial Group Inc. The firm currently has a buy rating on the stock.

It is good to hold now as 50-day Moving Average and 100-200-day MACD Oscillator signals a selling opportunity.

Analyst view

“We raise our 2020 Ford EPS forecast to ($0.90) vs. our prior forecast of ($1.30), while for 2021 and 2022 our EPS rises to positive $0.75 and $1.25 vs. our prior forecast of $0.30 and $0.80 respectively. On our revised price target of $8, Ford trades at just over 10x our 2021E EPS. Currently, the stock trades at just over 9x our revised 2021 EPS forecast,” Adam Jonas, equity analyst at Morgan Stanley noted in June.

“We raise our 3Q N. American Ford volume forecast to negative 12% Y/Y vs. down 15% previously. Our 4Q volume is revised to down 3% vs. down 5% previously. This slight upward adjustment reflects stronger than expected US SAAR, a rebound in used vehicle prices, and more supportive auto credit vs. our prior forecasts,” he added.

Brexit, COVID-19, and U.S Weekly Jobless Claims in the Spotlight

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar. The Pound and the Aussie Dollar, by proxy, were in focus in the early part of the day.

Away from the economic calendar COVID-19 and geopolitics continued to be a major source of angst for the markets.

Looking at the latest coronavirus numbers

On Wednesday, the number of new coronavirus cases rose by 222,368 to 12,130,571. On Tuesday, the number of new cases had risen by 227,176. The daily increase was lower than Tuesday’s rise while higher than 210,499 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 986 new cases on Wednesday, which was up from 776 new cases on Tuesday. On the previous Wednesday, 1,062 new cases had been reported.

From the U.S, the total number of cases rose by 62,416 to 3,162,416 on Wednesday. On Tuesday, the total number of cases had increased by 67,655. On Wednesday, 1st July, a total of 51,607 new cases had been reported.

Out of China

June’s inflation figures were in focus this morning. China’s annual rate of inflation picked up from 2.40% to 2.5%. Economists had forecast an annual rate of inflation of 2.50%. Month-on-month, consumer prices fell by 0.1%, following a 0.8% decline in May. Economists had forecast a 0.5% decline.

Wholesale deflationary pressures eased marginally in June, with the producer price index falling by 3% year-on-year. In May, the index had fallen by 3.7%. Economists had forecast a 3.2% decline

At the time of writing, the Aussie Dollar was down by 0.07% to $0.6977.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.07% to ¥107.34 against the U.S Dollar, with the Kiwi Dollar down by 0.09% to $0.6569.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Germany’s trade data for May will be in focus later this morning.

Barring a further narrowing in the trade surplus, however, the data should have a relatively muted impact on the EUR.

Expect updates from Brexit talks, COVID-19 and geopolitics to be the key drivers on the day.

At the time of writing, the EUR was up by 0.04% to $1.1334.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due to provide the Pound with direction.

A lack of stats leaves the Pound in the hands of Brexit as talks resumed on Wednesday. Any agreement on EU access to Britain’s fisheries and expect the Pound to jump.

Earlier in the day, June’s RICS House Price Balance figures had a muted impact on the Pound. The RICS House Price Balance survey showed that a net balance of -15% of respondents saw some degree of house price decline over the survey period. This was an improvement from a net -32% of respondents in May. Economists had forecast a net balance of -25%.

At the time of writing, the Pound was flat at $1.2610.

Across the Pond

It’s also a quiet day ahead for the U.S Dollar. Later today, the weekly jobless claims figures will draw plenty of attention. While nonfarm payrolls have impressed, the weekly claims numbers continue to raise red flags…

Another sizeable jump and the markets may need to question the upbeat sentiment towards the labor market recovery.

Away from the economic calendar, expect COVID-19 news and any chatter from Washington to also influence on the day.

At the time of writing, the Dollar Spot Index was up by 0.07% to 96.493.

For the Loonie

It’s another quiet day ahead on the calendar. May building permit figures are due out of Canada later today.

We don’t expect too much influence from the numbers, however.

Risk sentiment will remain the key driver as the markets begin to consider the Bank of Canada’s monetary policy decision next week.

At the time of writing, the Loonie was down by 0.04% to C$1.3517 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

European Equities: Economic Data and COVID-19 to Test the Majors

Economic Calendar:

Thursday, 9th July

German Trade Balance (May)

The Majors

It was another bearish for the European majors on Wednesday, with no stats or positive news to shift the mood from Tuesday. The CAC40 fell by 1.24%, with the DAX30 and EuroStoxx600 declining by 0.97% and 0.67% respectively.

Rising COVID-19 cases across the U.S drew more attention than normal, as the number of cases rose to beyond 3m.

Reuters also published an article reporting that the WHO acknowledged “evidence emerging” of the airborne spread of the virus.

The accelerating spread of the virus brings into question the market’s optimistic outlook on economic recovery. All of this before earnings season kicks in next week…

The Stats

It was a particularly quiet day on the Eurozone economic calendar on Wednesday. There were no material stats to provide the European majors with direction.

From the U.S

It was also quiet through the U.S session, with no major stats from the U.S to shift sentiment late in the day.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. Continental slid by 2.54% to lead the way down. Daimler and Volkswagen saw more modest losses of 0.52% and 0.86% respectively, while BMW bucked the trend, with a 0.41% gain.

It was also another mixed day for the banks. Deutsche Bank rose by 0.89%, while Commerzbank slipped by 0.94%.

WIRECARD AG slid by 15.53% to partially reverse a 32.51% gain from Tuesday.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 2.39% and 2.23% to lead the way down. Credit Agricole ended the day with a 1.42% loss.

The French auto sector struggled after a bullish start to the week. Peugeot and Renault slid by 4.20% and by 4.61% respectively.

Air France-KLM and Airbus SE fell by 2.21% and by 2.18% respectively, following on from a pullback on Tuesday.

On the VIX Index

A run of 2 consecutive days in the green came to an end for the VIX on Wednesday. Partially reversing a 5.33% gain from Tuesday, the VIX fell by 4.59% to end the day at 28.08.

After a bearish start to the day, the major U.S indexes bounced back to wrap up the day in positive territory.

Hope overshadowed the dire COVID-19 numbers from the U.S on the day, with no economic data to influence. Tech stocks led the way, delivering the NASDAQ with a solid gain on the day.

The S&P500 rose by 0.78%, with the Dow and NASDAQ ended the day with gains of 0.68% and 1.44% respectively.

VIX 09/07/20 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. May’s trade figures for Germany are due out later this morning.

We won’t expect too much influence from the numbers, however, which are now dated.

With the stats unlikely to garner too much attention, expect updates on Brexit and COVID-19 news to remain key drivers.

From the U.S

It’s also a relatively quiet day on the economic calendar, though we do expect the weekly jobless claims to influence.

Following a record jump in nonfarm payrolls in June, we have yet to see the weekly claims fall back to sub-1m levels.

With a number of the most populous U.S states hitting pause on reopening, this week’s figures could be alarming…

Anything under 1m initial jobless claims and the markets may breathe a sigh of relief.

The Latest Coronavirus Figures

On Wednesday, the number of new coronavirus cases rose by 222,368 to 12,130,571. On Tuesday, the number of new cases had risen by 227,176. The daily increase was lower than Tuesday’s rise while higher than 210,499 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 986 new cases on Wednesday, which was up from 776 new cases on Tuesday. On the previous Wednesday, 1,062 new cases had been reported.

From the U.S, the total number of cases rose by 62,416 to 3,162,416 on Wednesday. On Tuesday, the total number of cases had increased by 67,655. On Wednesday, 1st July, a total of 51,607 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was up by 127 points, while the Dow was down by 28 points.

For a look at all of today’s economic events, check out our economic calendar.

Mid-Week Themes – The Economic Recovery, Geopolitics, and Brexit News in Focus

The second week of July and the quarter is in the middle. Throughout the end of last week and this week, various economic data has been released.

What does the published data reveal to us?

Economic data over the last week or two have certainly supported the market optimism of an economic rebound.

We’ve seen nonfarm payrolls from the U.S surge by record levels. And we have seen PMIs, retail sales, and industrial production recover.

It’s worth noting, however, that these are coming back from record lows. So, while the figures are supportive of even a V-shaped recovery, July numbers will need to maintain that upward trend.

When you see governments having to reintroduce confinement measures as a result of COVID-19 spikes that recovery could be tested. All in all, this will make the next round of economic indicators all the more relevant and influential. Expect plenty of sensitivity to the next set of numbers.

The markets are still bound to watch out for a return of the coronavirus.

In the meantime, are there any notable geopolitical developments occurring?

While Brexit remains a headline, the U.S and China tensions remain the biggest threat. We saw the U.S send two aircraft carriers into the South China Sea while China carried at war drills.

Since then, however, it’s been relatively quiet. The U.S has dragged the UK into the spat, however. Britain riled Beijing over plans to pull out of the Huawei deal. To top things off, offering 3m Hong Kong citizens with UK citizenship didn’t go down too well either…

Ironically, the U.S has asked China to ramp up imports in spite of the latest spat. That suggests that it’s nothing more than arm flexing for now, though things could deteriorate…

The US elections are bound to grow in importance, as their impact on the markets grows.

Meanwhile, Brexit news is off the news wires. Are there any developments in the process?

Following last week’s curtailed talks, Brexit talks are set to resume today after last night’s dinner in Downing Street.

The key to any deal remains EU access to UK fisheries. From an EU perspective, it is clear. No agreement on fisheries means no trade agreement.

News had hit the wires early in the week that the EU was willing to compromise, which delivered Pound support.

How much of a compromise they are willing to make remains to be seen, however…

There is the talk of a zonal attachment. This is where access to fish is based on the amount of time it spends in British waters. Scientific data would then provide the allotments…

All of this has stemmed from climate change. Britain’s waters are warmer and the fish want warmer water. EU fishermen, however, still want access to the fish.

Expect updates over the next couple of days to materially influence the Pound. Any agreement and the Pound should rocket.

US Stock Market Overview – Stocks Rally Led by the Nasdaq Which Notched Up another Record High

US stocks moved higher with the Nasdaq hitting a fresh all-time high. This is the 28th all-time high for the Nasdaq in 2020. Sectors in the S&P 500 index were mixed, led by financial and cyclical, while materials were the worst-performing sector. James Bullard was on the tape as one of the Fed officials talking to CNBC saying that he believes that the unemployment rate will hit single digits by the end of the year. Currently, the US unemployment rate is 11.4%. United Airlines announced that it might be forced to lay off half its workforce by October due to the lack of travel driven by the spread of COVID. The dollar moved lower on Wednesday helping to buoy gold and gold miners. Oil prices also moved higher but failed to lift the energy space.

United Announces Possible Layoffs

United Airlines announced on Wednesday that the company could be forced to shed almost half its U.S. workforce, telling 36,000 employees that they could be furloughed at the beginning of the Q4. The lack of travel in the US due to the pandemic has curtailed passenger demand. Chicago-based United is the first major U.S. carrier to detail possible mass furloughs despite the billions of dollars in federal aid provided to airlines.

Fed Governors have Mixed Views

Cleveland Federal Reserve President Loretta Mester said that her region was experiencing slowing growth due to rising coronavirus cases, and she sees more policy help necessary to help the economy through the pandemic. Mester reiterated her colleague Atlanta counterpart, Raphael Bostic, who also said he sees a rougher road to recovery. This compared to James Bullard’s take on the economy which is very constructive as he sees the unemployment rate dipping into single digits by the end of the year despite the continuous spread of COVID.