What to Expect This Week

The past week started off promising for markets, but as the number of new coronavirus cases spiked across the U.S., all three major U.S. indexes gave up their earlier gains. Out of the S&P's 11 sectors, tech managed gains, overall, with energy and financials losing their momentum. The rise in new cases has caused cities and states around the country have begun to slow or pause their re-openings. Apple has closed its retail stores in several states, and Microsoft announced it is permanently closing all of its retail stores.

Coming up this week, we'll be looking at the U.S. unemployment rate, the Eurozone's manufacturing PMI's, and how the housing market has endured through the crisis.

U.S. Unemployment
With extended unemployment benefits expiring at the end of July, the rate at which U.S. unemployment declines will be critical for many families around America. The Bureau of Labor Statistics (BLS) has had a statistical difficulties recently, as the survey used to measure unemployment is not made to measure such large and rapid changes in the labor market. Economists now believe that unemployment was somewhat higher in April and May than the numbers originally suggested, but the unemployment rate did still drop between April and May. Continued paychecks are the key to continued consumer spending, the main engine of the U.S. economy. Consumer spending hit a record high in May after collapsing to a record low in April.

Eurozone and U.K. PMIs
The Eurozone and the U.K. release manufacturing Purchasing Managers' Indexes (PMIs) on July 1, and release Service PMIs on July 3. These index, based on surveys of managers across an array of industries, can help measure the pace of the recovery. Manufacturing PMIs are released on July 1, and Service PMIs are released on July 3, so their rate of recovery can be looked at together to see how the different parts of the economy are recovering. The preliminary "flash" PMI results were significantly better than economists expected, a good sign for recoveries, so keep an eye on the full report when its released to see if that bears out in the full report.

S&P/Case-Shiller Home Price Index
The S&P/Case-Shiller Home Price Index is an index of housing prices across the United States. There are two index, one that measures the housing prices in 10 metropolitan area across the U.S., and one that measures them across 20. The 20-metro index for April is released on June 30. April was the first full month of lockdown, when unemployment peaked, and was when the number of new coronavirus cases originally peaked before the current resurgence. Therefore, understanding the housing market at that point is critical. Because housing equity is the primary store of middle-class wealth in America, this index can help elucidate the damage done by the current crisis to the wealth of America's families.

Facebook in Focus
FB will be a key stock to watch this week, as more big advertisers, including Unilever, Verizon, and Patagonia, have pulled their advertising from the social network for the rest of the year citing hate speech and polarized politics as the key reasons for its decision. Shares of FB fell 8.5% on Friday.

EIB-ESM capital markets webinar
The European Investment Bank (EIB) and the European Stability Mechanism (ESM) are organising a webinar on capital markets.The programme will cover macroeconomic themes, as well as the role of sustainable finance in the economic recovery, among others.

Participants will benefit from discussions with high-level speakers from the public and private sectors in a confidential setting.Please note that the first day of this webinar is targeted at reserve managers of central banks and official institutions only. The second day is open to all types of investors.

EIC ePitching with investors on Internet of Things and smart cities: ready for the next step?
The European Innovation Council (EIC) is pleased to invite all eligible start-ups to participate in its monthly EIC ePitching with investors. This edition will focus on Internet of Things (IoT) and smart cities. A limited number of EIC-backed up SMEs will have the chance to show their innovative solutions via an online tool to a jury of investors. This exclusive service will include specific training and will be an excellent opportunity to exchange experiences with fellow EIC companies.

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