Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Economic Calendar - Top 5 Things to Watch This Week

Published 07/05/2020, 07:24 AM
Updated 07/05/2020, 07:25 AM

By Noreen Burke

Investing.com -- The increasing number of Covid-19 cases in some U.S. states which has led to reopening plans being paused or rolled back is going to be an ongoing source of worry for investors as the second half of 2020 gets underway. It’s a quiet week on the U.S. economic calendar, with Thursday’s report on jobless claims set to be the highlight. Across the pond, Brexit talks rumble on and euro zone finance ministers are to meet for further discussions on the bloc’s recovery fund ahead of a crucial summit later this month. Here’s what you need to know to start your week.

  1. Pandemic progress

Florida and Texas, two states that have emerged as the latest hot spots of the U.S. coronavirus outbreak, both reported new single-day record increases in confirmed Covid-19 cases on Saturday - with nearly 20,000 additional infections combined.

The recent surge, most pronounced in Southern and Western states that were among the last to impose restrictions at the outset of the pandemic and the first to relax them, has alarmed public health officials.

The pandemic’s trajectory remains the main source of uncertainty for investors and more than 40% of the U.S. has now reversed or placed reopenings on hold, analysts at Goldman Sachs (NYSE:GS) said in a recent note, with renewed containment measures set to add to the problems in the labor market.

  1. Light week for U.S economic calendar

On Monday, the Institute of Supply management reports its survey of U.S. non-manufacturing activity, with economists forecasting a move back into positive territory. Meanwhile, data firm IHS Markit will publish data on U.S. business activity.

Thursday’s weekly report on initial jobless claims will be closely watched as the level of new layoffs continues to remain elevated even as businesses reopen, a sign the recovery in the labor market will be slow, economists say.

Also Thursday Walgreens Boots Alliance (NASDAQ:WBA) reports quarterly results and data on U.S. producer prices is due out on Friday.

  1. Second half gets underway

After finishing the first half of 2020 on a high, market bulls are going into the second half buoyed up by signs of an economic rebound and hopes for a vaccine. Economic data out of Europe and China is also indicating that a recovery is underway, and the upcoming earnings season may offer proof of earnings bottoming out.

But several obstacles still loom. It is still unclear whether the U.S. Congress will extend a scheme supplementing jobless benefits beyond July 31. The run-up to the U.S. presidential election in November will be choppy, especially if Democrat Joe Biden extends his poll lead. And the EU needs to agree on a $750 billion recovery fund proposal.

Investors also worry about authorities getting cold feet as debt levels mount. There are no indications of that so far, but any sign of policymakers easing up on stimulus measures could spell trouble.

  1. Euro area challenges ahead

Germany has just taken over the six-month rotating presidency of the European Union as the bloc faces its deepest recession since WW2.

EU leaders must agree on a multi-year budget of over 1 trillion euros ($1.1 trillion), launch a recovery fund for economies hit hardest by COVID-19 and clarify its future relationship with post-Brexit Britain.

A meeting of euro area finance ministers on Thursday could be telling before a looming July 17-18 summit - crucial to securing agreement on a recovery fund.

Germany wants to use its time in the EU presidency to make Europe strong again; a recovery fund agreement would certainly help. Markets are hopeful that solidarity will prevail - the euro is up over 5% since March but optimism could fade if bickering sets in.

  1. Brexit talks rumble on

Last week’s round of Brexit talks broke up a day early amid “serious” disagreements between the two sides, with the EU’s chief negotiator, Michel Barnier, complaining of a lack of respect and engagement by the British government.

The two sides are due to resume talks this week in London but seem unlikely to yield any more success.

Britain left the world’s largest trading bloc on Jan. 31, but there has been little progress on designing a new relationship with a year-end deadline looming. Both sides had hoped last week's negotiations would reboot the process.

--Reuters contributed to this report

Latest comments

"After finishing the first half of 2020 on a high"  Who writes this *****
someone high
Btw, folks, talking about market ahead, it goes sideways. It means couple percents up, couple percents down, some swing opportunities and so on. It may continue till August.
US daily death count continues declining and anyway red states will not go to meaningful lockdowns that could affect economy.
it is turning 10%+ drop imminent
By what specific date? End of July?
i agree market will go down tomorrow ..
This market could give back some like 3-4% and then it pull UP again
What' do you think about week ahead
What's amazing is no one is talking about all the non-travel and food industry companies announcing or in the process of laying people off. You see reports every week of companies letting people go.  These are not furloughs, they are permanently lost jobs. On top of that, no one is giving numbers or talking about the travel and food industry jobs that will never come back. When all this data starts to hit is when the market will correct.  I have a feeling this will start to happen before the election (Aug/Sept). Until then just continue to ride the wave, making money on the long. Don't fight the trend. Just be ready when it turns.
Very bleak and informative. Agreed. Wondering how rhe markets will react. No way this rally can last much longer before the reconing.
Immaculate analysis. The fall though might come sooner than August. Most likely the fall will start from 3rd week of July and then Aug/Sep would see a stablized market around 5% down from present levels.
You have to understand that. Been unemployed today is much better than been fliping humburgers. Today you make $600 more every week. And that whats is moving the economy. When the $600 is over the party is over.
Is this paid media? Sounds like they just want to spread the number of virus infection but not the VERY LOW death rate update. And they did not mention that the virus is very weak now unlike the early months it was broadcast. Am I reading the paid FAKE NEWS?
dude low death rate means atleast 1000 in 1 dying might be you or might be me someone will die it might not be nothing for nation but for a family its 100% loss so think once dude even a single death can impact more
Dude, I hope you don't get me wrong. I always have my compassion for everyone that is affected by the virus especially the family that lost their loved ones. My point in my comment is the truth that will drive the market not just the one side of story.
 Please not that death rate has about 4-5 weeks lag from infection date as people don't die immediately after contracting the sickness. We've only been having increased numbers for a week so you actually need to wait 3-4 more weeks to see if the death rate increases or not. If it doesn't increase then the higher numbers are mostly due to more testing but if it increases...well you know what happened.
so touch!!! may all survive this covid19
I laugh out loud! Last week the top 5 economic got news was fed speech and rise in corona virue but guess what the market did for the 4 trading day? It jist run barely any real pull back. This week same ********. load calls and u good lol! When it dip load more calls. Investors dont care about the rise in virus . Load calls
Gov is pumping money via fiscal policy. Fed is pumping money via bying corp bonds. We never seen both policies pump money to the market at the same time. The only thing will scare this market is Biden.
The only reason people dont wear mask because they cant breath.
so we need know see things different. because the country around the world has your peculiarities.
Reuters contribution is the worst part of Investing news.
The best news agency, I guess
Your guess is wrong.
People wearing masks every day in high temperatures and humidity may develop respiratory infections and this is the reason they have so many infections in Florida and other states .
lmao this is hilarious and why you can't believe everything you read on the internet...
The reason for Florida: The beaches, bars ( next to beaches) were packed. Add to that crowd were protestors. The governor is correct to shutdown the beach and bars.
same to you. And learn how to type and spell
We are In a bubble for sure, but I believe it can be inflated much more before the eventual pop. Buying all dips until Nov 4th. After that I'm going short no matter who wins the election.
Forgot #6. The Increasing number of Americans queuing in breadlines Forgot #7: Automobile Industry is plunging
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.