This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Recovery Solid in June; July Clouded by Shutdown Risk

Econoday Inc.

Contributor:
Econoday Inc.
Visit: Econoday Inc.

By:

Editor-in-Chief at Econoday

Global Economics – June 26, 2020

Introduction

May certainly and June as well are destined for the history books, posting a series of record high scores that were, however, not the result of strength at all but of very easy comparisons against the shutdown months of March and April. Based on flash PMI reports that dominated the week, June looks to have been a positive month of recovery for much but not all of the global economy. The biggest news from June will be in the coming week with the US employment report where Econoday’s consensus is calling for exceptional gains. July, however, is suddenly another story; how it turns out hinges entirely on infections rates and the risk of new shutdowns.

The Global Economy

Purchasing manager indexes

PMI indexes are beginning to move from the very bottom of their range to the no-change 50 line. This movement indicates – not that business activity has already climbed out of the cave-in – but that the rate of contraction relative to the cave-in is stabilizing. The smaller the columns in the accompanying graph, the smaller the monthly change. This is key so let’s repeat it for emphasis! PMI indexes, which are based on respondents’ own assessments of monthly change at their firms, track change on a month-to-month basis only. Now, let’s look at June’s star PMI performer: France, where monthly change, at 52.1 for manufacturing and 50.3 for services, has already gotten back above the 50 line. This means that after severe contraction in March, even more severe contraction in April, followed by still heavy in contraction in May, France’s PMI samples in June reported a bit of growth relative to May. This is not growth relative to the happy month of February and against which June’s comparisons would in fact shrivel. Remember, it’s only about month-to-immediate-month: respondents are asked whether business is better than last month, unchanged from last month, or worse than last month. Details in June’s report from France included the best monthly growth in manufacturing production in more than two years and the best overall sentiment readings of the crisis.

French manufacturing and services june 2020

To read the remainder of Simply Economics, please subscribe via Amazon Kindle or email info@econoday.com to get set-up today!

Disclosure: Econoday Inc.

Important Legal Notice: Econoday has attempted to verify the information contained in this calendar. However, any aspect of such info may change without notice. Econoday does not provide investment advice, and does not represent that any of the information or related analysis is accurate or complete at any time.

© 1998-2021 Econoday, Inc. All Rights Reserved

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Econoday Inc. and is being posted with permission from Econoday Inc.. The views expressed in this material are solely those of the author and/or Econoday Inc. and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

trading top