With No Important Economic Reports Scheduled To Be Released Today, Traders Focus On The Spread Of The Virus
S&P 500 futures are losing ground in premarket trading as the stock market shifts its attention to virus data.
Yesterday, stocks were boosted by better-than-expected U.S. Services PMI and Composite PMI reports. There are no major economic reports scheduled to be released until Thursday when the market will digest the new data on Initial Jobless Claims and Continuing Jobless Claims.
In this environment, traders’ attention naturally turns to the developments on the coronavirus front. The situation does not look good as the pandemic shows no signs of a slowdown.
According to data from Johns Hopkins University, more than 11.6 million cases of coronavirus have been recorded since the beginning of the pandemic. In recent days, the world has recorded more than 200,000 new cases per day which is the all-time high.
U.S. May Ban Social Media Apps From China
The U.S. is set for another round of tensions with China as it may ban the country’s social media apps as they may share information with the Chinese government.
Meanwhile, companies like Facebook and Twitter have announced that they would not take requests for user data from Hong Kong’s government due to the new security law.
China will likely try to retaliate against any restrictive measures so U.S. – China relations will continue to follow their downside trend.
European Commission Revises Its Economic Forecast To The Downside
While stocks trade as if there is no pandemic at all, the situation is challenging for the real economy. According to the new forecast from the European Commission, Euro Area’s economy will decline by 8.7% in 2020 and rebound by 6.1% in 2021.
The previous forecast called for a decline of 7.7% in 2020 and growth of 6.3% in 2021. The reopening of the economy is not proceeding as fast as previously expected as governments have to balance their economic priorities with virus containment measures.
The slowdown in the EU will directly impact U.S. multinationals. At the same time, it also raises questions regarding the recent optimism about the rebound of the U.S. economy which currently faces a surge in the number of virus cases.
For a look at all of today’s economic events, check out our economic calendar.