Macro Roundup (Sep 4)

SHANGHAI, Sep 4 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

On Wall Street, stocks plunged on Thursday, retreating from all-time highs as tech — the market leader since the rebound began in late March — suffered its biggest drop in months.

The Dow slid more than 800 points, or 2.8%, during the cash session for its biggest one-day decline since June. The S&P 500 plunged 3.5% and the Nasdaq Composite dropped 5%. Thursday’s declines also wiped out the major averages’ gains for the week and knocked both the S&P 500 and Nasdaq off record levels.

As a sector, tech had its worst day since March, falling 5.83%. Apple contributed a big portion of those losses, falling 8%. Facebook, Amazon, Netflix, Alphabet and Microsoft also closed Thursday’s session sharply lower.

The dollar’s bounce extended on Thursday as investors trimmed bets against the greenback and sold the euro on concerns that the European Central Bank was worried about its rise.

The surge has lifted the greenback about 1.3% above the 28-month low it hit against a basket of currencies on Tuesday.

Oil prices fell on Thursday, at one point touching their lowest since early August as US unemployment data fed fears of a slow recovery for the economy and fuel demand a day after weak US gasoline demand data.

Labor Department data showed the number of Americans filing new claims for unemployment reached a seasonally adjusted 881,000 for the latest week. Continuing claims remained high, with millions out of work.

Final euro area Markit Purchasing Managers’ Index (PMI) composite readings Thursday showed that economic activity expanded by more than expected in August, coming in at 51.9 against a forecast of 51.6, with a reading above 50 representing monthly expansion. This was lower than the 54.9 reading for July, however, as a number of European countries wrestle with resurgences in coronavirus cases.

Germany’s services PMI for August was revised sharply higher to 52.5 from a preliminary estimate of 50.8.

The EU’s Brexit negotiator said Wednesday that the UK must address the bloc’s demands on fisheries and fair competition in order to confirm new trading arrangements by the end of October deadline.

Meanwhile, Bank of England Deputy Governor Dave Ramsden and fellow policymaker Gertjan Vlieghe on Wednesday warned that the British economy could suffer a deeper wound from the coronavirus pandemic than the Bank projected last month.

On the SHFE, nonferrous metals finished in negative territory in overnight trading. Nickel fell 2.71%, lead declined 2.19%, copper weakened 1.18%, aluminium slipped 0.8%, zinc shed 1.83% and tin slid 1.53%.

The LME complex were mostly lower on Thursday. Nickel tumbled 4.07% to lead the losses, copper declined 1.57%, aluminium weakened 0.81%, zinc shed 1.4% and tin slid 1.09%, while lead outperformed with a 0.21% increase.    

Here’s a look at what’s on tap:

US: Nonfarm payrolls and unemployment rate for August

Australia: July retail sales data