Last week, the international market was in a state of flux. Negotiations on a new round of fiscal stimulus between the White House and the House of Representatives reached an impasse. The international gold price exceeded the $2,000 mark. The U.S. non-farm payrolls report was better than expected. U.S. stocks rose collectively, with the Dow Jones Industrial Average rising 3.8 points for the week, the Nasdaq Composite Index rising 2.4 points for the week, and the S&P 500 Index rising 2.5 points for the week. The three major European stock indexes performed well. The British FTSE 100 index rose by 2.3 points on the week, the German DAX30 index rose by 2.9 points on the week, and the French CAC40 index rose by 2.2 points on the week.

Although it was announced last week that 1.763 million new jobs were created in the United States in July and the unemployment rate dropped to 10.2, both of which were better than market expectations. The employment-related data in May and June were also slightly revised upwards. Affected by the resurgence of the epidemic, the U.S. job market cooled down last month. The $600 weekly emergency unemployment benefit has expired at the end of July, causing a hit to the income of many Americans. Last Friday, negotiations between the U.S. government and the House of Representatives on a new round of fiscal stimulus bill broke down again. U.S. Treasury Secretary Mnuchin said that the dialogue had not made any progress. On Saturday (8th), U.S. President Trump signed a series of executive orders, including continuing to provide $400 in weekly unemployment benefits, deferring student loans until the end of the year, and extending (tenant) eviction protections. U.S. media expect Trump’s orders will soon face legal challenges because continuing to implement these plans will require federal funds controlled by Congress.

Seema Shah, chief strategist at Principal Global Investors, said that the July non-farm payrolls report surprised the market, but it does not mean that economic conditions have improved significantly, and warned that the government and the House of Representatives will A failure in the talks could drain the tentative economic recovery that has been building in recent months.

The financial reporting season has entered the middle and late stages. Companies that will announce their results this week include Cisco, Applied Materials, Marriott Hotels, Lyft, Barrick Gold, Royal Caribbean, etc.; in terms of Chinese concept stocks, NetEase and Tencent Music will also Disclose financial statements.

Crude Oil and Gold

International oil prices hit a new high in more than five months last week. OPEC production cuts and declining U.S. crude oil inventories have given investors confidence, but the epidemic and geopolitical factors are Potential downside. The front-month contract of WTI crude oil closed at $41.22/barrel, up 2.4 points on the week, and the front-month contract of Brent crude oil closed at $44.40/barrel, up 2 points on the week.

Data released by the U.S. Energy Information Administration (EIA) showed that in the week ended July 31, U.S. commercial crude oil inventories decreased by 7.373 million barrels to 518.6 million barrels. The market expected a decrease of 3.1 million barrels. Refined oil inventories Inventories continue to rise, with gasoline demand remaining at 8.6 million barrels per day, down 10% from the same period last year. U.S. crude oil production last week decreased by 100,000 barrels from the previous week to 11 million barrels per day, a new low in the past seven weeks.

International gold prices ended their continuous rise last Friday, and the non-farm payrolls report boosted the US dollar. However, factors such as the epidemic still caused gold prices to rise for the ninth consecutive week, setting a new record for the longest rise in the past 10 years. It successfully reached the US$2,000/ounce mark, with a cumulative increase of 2.6 points that week.

The new round of economic aid bill in the United States was "difficult to deliver", which once suppressed gold prices. ED&F Man Capital Markets analyst Edward Meir said that once the U.S. Congress reaches an agreement on the economic stimulus plan, the dollar will be bearish and the market will receive more loose funds. Gold is still expected to strengthen. The gold price may be at Between 2200-2300 USD.

Europe will release its second-quarter report card

Data released last week showed that the euro zone manufacturing industry expanded for the first time since the beginning of 2019 due to a rebound in demand after the easing of blockade measures. According to a report by IHS Markit, the final manufacturing PMI value of the Eurozone in July rose to 51.8 from 47.4 in June, exceeding market expectations of 51.1, and standing on the line of prosperity and contraction for the first time in more than two years.

Chris Williamson, chief business economist at IHS Markit, said that the Eurozone manufacturing PMI had a good start in the third quarter, with production growth hitting the fastest pace in more than two years, strongly indicating that August should Output will grow further. Forward-looking indicators were also generally more positive, but the employment sub-index lagged behind, with policymakers worried about possible layoffs again in the manufacturing sector, where the labor market is key to determining economic recovery.

At present, Europe is still affected by the epidemic, but with the implementation of prevention and control measures, the scale of subsequent impacts has been reduced compared with before. As an economic engine, German factory orders increased by 27.9% month-on-month in June, an increase much higher than the expected 10.4%, setting a record high, indicating that the German economy is recovering.

The United Kingdom will also release second-quarter GDP data this week. The Bank of England currently predicts a contraction of 21%, a decline far greater than that of major European economies Germany, France and Italy. Bank of England Governor Bailey said that he will face many difficulties in the future and is ready to take action when necessary. The UK's failure to reach a trade deal with the EU will be part of the downside risk tilt, but the COVID-19 epidemic is currently the biggest problem facing the UK economy.

The Bank of England kept its benchmark interest rate unchanged last week, in line with market expectations. The Bank of England said it would accelerate its purchases of British government bonds if the situation worsens. The British economy is expected to return to the size of the fourth quarter of last year before the end of 2021, but risks to the economic growth outlook still tend to be downward.

This week’s highlights