Tensions between the U.S. and China flared up further again today.
China reportedly rejected a U.S. proposal for the Security Council to meet over the issue, whilst U.S. secretary of state Mike Pompeo declared that Hong Kong is no longer autonomous from Beijing. This morning China is also reported to have approved the controversial security legislation for HK.
Tensions are showing signs they could bubble up even more and potentially boil over – I worry about an embattled U.S. president in this election year facing a national crisis at home and what he may do to win the election. He could blame the crisis on his main geopolitical adversary..?
Despite these developments, stocks continue to strengthen and move out of recent ranges. Confidence in markets is strong – this is mostly due to central bank stimulus and because economies are re-opening quicker than anticipated. I sincerely hope we aren’t opening too soon and too fast, as we may see a resurgence in cases.
U.S. stocks surge continues
U.S. stocks surged again Wednesday with the S&P 500 closing above the 3,000 psychological level. The Dow added over 500 points to clear another psychological level of 25000. The FTSE closed up at: 6144 and the Dax gained 150 points to close up at: 11658.
Furloughed becomes permanent?
Is the worry now that temporary furloughed employees will be made permanently redundant as businesses slowly discover demand has disappeared? Is there worse to come? – I fear that there will be.
It was reported today, Thursday 28th May 2020 that Easyjet is planning to 30% of its staff. Virgin Atlantic and British Airways have already made such announcements. More evidence of permanent job losses.
Twitter and Trump
Donald Trump is unhappy with Twitter and he has threatened to shut down social media sites that ‘stifle’ opinion (is that free speech)? He faces sanctions by Twitter with fact check warnings. How will he cope, this is one of his favourite mediums.
Market moving news
Germany – consumer price index data due Thursday
U.S. – jobless claim data due Thursday at: 13:30 BST
U.S. – GDP data due Thursday at: 13:30 BST
With U.S. unemployed totals currently at around 38 million – it won’t take much of a move today to push 40 million people into unemployment.
This will mean that 40 million people have lost their jobs in the U.S. in just 10 weeks! Unprecedented – recession or depression levels of job losses?