May 15 US and European Close


Covid-19 Globally over 4.53m cases, 307k deaths
As Trump says at a press conference announcing more measure to fast track a vaccine that covid-19 will ‘go away at some point’
After market the House Democrats passed a $3tn covid-19 relief package
Buffett sold most of his stake in Goldman Sachs and reduced his stake in JPM

DOW +0.25%, NDX +0.79%, S&P +0.39%, Russel 2K +1.57% Market opened lower on poor data. Retail Sales saw a record drop although the sector worked its way back from the initial lows. Plus Trump announced tighter controls on Huawei and US suppliers to it which prompted rumours of retaliation from China. Chipmakers were weak; Qualcomm -5%, Lam Research -6.4%, Qorvo -4.2% and Skyworks -2%, Applied Materials -4.4% (despite good earnings) along with the Philadelphia Semiconductor index. But later the Michigan Consumer Data came out better that expected and markets put the bad news behind them and worked back the earlier losses. Which suggests that there is a lot of cash sitting on the sidelines looking to get invested. Overall for the week the US markets closed lower.
JC Penny +21% files for Chapter 11 after making a key $17m interest payment on Thursday although it had missed some rent payments. Other retail +VE Best Buy +1.8%, Walmart +2%, Kohls +5.1%, Nordstrom +4.9%, Lowes +3%, Home Depot +2%
But VF Corp -6.3% (Vans and Timberland) said quarterly sales were -10% and guided lower.
DATA
Retail Sales Apr -16.4% MoM vs -8.3% Mar (F/cast was -11.8%)
[Apr -21.6% YoY vs -5.7% Mar (F/cast was -16.3%)]
Retail Sales Ex Auto Apr -17.2% MoM vs -4% Mar (F/cast was -8.6%) Much worse than expected; panic buying of groceries eased MoM, clothing & accessories -90%, BUT non store vendors +21%. I still think consumer spending is going to remain weak until job security rises significantly and that is likely to take many months.
NY Empire State Manufacturing Index May -48.5 vs -78.2 Apr (F/cast was -65)
Industrial Production Apr -11.2% MoM vs -4.5% Mar revised (F/cast was -12.3%) [Apr -15% YoY vs -4.9% Mar revised (F/cast was -16.4%)]
Manufacturing Production Apr -13.7% MoM vs -5.5% Mar revised (F/cast was -10.8) [Apr -18 YoY vs -5.8% Mar revised (F/cast was -14.2)]
Capacity Utilisation Apr 64.9% vs 73.2% Mar revised (F/cast was 65%)
JOLTs Job Openings Mar 6.191m vs 7.004m Feb revised up (F/cast was 3.1m)
Business Inventories Mar -0.2% MoM vs -0.5% Feb revised lower (F/cast was -0.5%)
Michigan Data Preliminary
Consumer Expectations May 67.7 vs 70.1 Apr (Consensus was 71.8)
Current Conditions May 83 vs 74.3 Apr (Consensus was 75)
Inflation Expectations May 3.0% vs +2.1 Apr
5 Yr Inflation Expectations May 2.6% vs 2.5% Apr
Consumer Sentiment May 73.7 vs 71.8 Apr (F/cast was 65)
Baker Hughes Total Oil Rig Count 339 vs 374 prior
Foreign Bond Investment Mar $-299.3b vs $4.9b Feb
Overall Net Capital Flows Mar $349.9b vs -13.4b (F/cast wa -145b)
Net Long Term Tic Flows Mar $-112.6b vs 49.4b Feb
USD was weaker vs Yen & Euro. Bitcoin +0.4% @ 9406.00, VIX -2.2% @ 31.89, US T10 0.644%
OIL Brent +3.7%, WTI +5.9% as crude demand in China rises
Gold +0.76%, Silver +5.7%, Copper -0.6%. Gold hits a 7 yr high as US/China tensions rise
AHEAD NAHB Housing Market Index,

DAX +1.24%, CAC -0.11%, FTSE +1.01% Markets opened higher but initially drifted lower on weak data but then trended higher in the afternoon as US markets reversed early loses only to sell off into the close. Basic resources lead the market and retail was the laggard. Economic recovery and covid-19 weighting on investor sentiment, with Germany reporting a transmission rate of below 1 +VE. Economic data was weak as was the US data which gave some cause for concern.
GEA +9% (Factory equip maker) on strong Q1 earnings and guidance.
Hammerson +10% after recent weakness
WH Smith -8.8% 1H results show an 85% fall in sales but some transport stocks rallied National Express +13.3% April revenue done but inline. Trainline +11% on news Transport of London got a GBP1.6bn government bailout to keep it running until at least September
LafargeHolcim -6%
Richemont -2% announced FY results which missed forecasts and said manning to halve it dividend. -VE cross read Luxury brands
DATA
EUROZONE GDP Growth Rate 2nd est. Q1 -3.8% QoQ vs +0.1% prior (F/cast was -3.8%) [Q1 -3.2% YoY vs +1% prior (F/cast was -3.3%)]
Balance of Trade Mar Euro 28.2b vs 23.7b Feb (F/cast was 22.9b)
Employment Change Prel Q1 -0.2% QoQ vs +0.3% prior (F/cast was -0.6%) [Q1 +0.3% YoY vs +1.1% prior (F/cast was +0.1%)]
GERMANY PPI Apr -0.7% MoM vs -0.8% Mar (F/Cast was -0.6%) [Apr -1.9% YoY vs -0.8% Mar (F/Cast was -1.8%)]
GDP Growth Rate Flash Q1 -2.2% QoQ vs -0.1% prior (F/cast was -2.4%) [Q1 -2.3% YoY vs +0.4% prior (F/cast was -2.6%)]
FRANCE Inflation Rate Final Apr 0% MoM vs +0.1% Mar (F/cast +0.1%) [Apr +0.3% YoY vs +0.7% Mar (f/cast +0.4%)]
Harmonised Inflation Rate Final Apr 0% MoM vs +0.1% Mar (f/cast +0.1%) [Apr +0.4% YoY vs +0.8% Mar (f/cast +0.5%)]
AHEAD 
GERMANY No data due
FRANCE No data due
UK No data due