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“I always tried to turn every disaster into an opportunity.” – John D. Rockefeller
We’re six and a half hours of trading from wrapping up the month of August and the seventh straight month of gains for the S&P 500. Futures have been drifting lower this morning after gains overnight, but so far the declines remain modest. One catalyst cited for the weakness has been comments from an ECB Governing council member (Holzmann) suggesting that the ECB should at least start to talk about how it will remove policy stimulus.
On a brighter note related to COVID, Bloomberg reports this morning that beginning tomorrow Citigroup will increase capacity in its Hong Kong offices to 90% from an already relatively high level of 75%. Citi’s move follows similar moves from Goldman Sachs and Bank of America earlier this Summer. While Hong Kong’s case burden is considerably less than most other areas of the world, it’s encouraging to see at least one area of the world returning somewhat back to normal.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
While the ECB now joins other central banks around the world in discussing or already starting to remove accommodation, we’d note that August data hasn’t looked particularly good so far. Overnight, we had reports out of China showing that activity in the Manufacturing and Services sector slowed considerably. Here in the US, regional manufacturing Federal Reserve surveys for the month of August also showed a notable deceleration in momentum. While the headline readings of the five Federal Reserve surveys all still showed growth (with some at healthy levels), they all decelerated relative to July, and only the KC Fed survey managed to exceed expectations. We’ll get a further read on the state of the economy in August with the Chicago PMI today at 10 AM and then the ISM Manufacturing report at 10 AM tomorrow.
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