Weekly News Summary for May 15-21, 2020

Friday, May 15, 2020: US Retail Sales Hit New Record Fall in April

Consumer spending was down to a record 16.4% in April, as the key support of the world’s biggest economy declined after the pandemic prompted shoppers to stay at home.

Several economists expected retail sales to drop by 12.3% after March’s 8.3% fall already set a record for data going as far back as 1992.

Monday, May 18, 2020: US Economic Recovery May Take Until End of 2021

Federal Reserve chairman Jerome Powell expects the US economy to improve gradually through the second half of 2020, although warned it may take until the end of next year for the country to fully recover.

Powell argued an official vaccine for COVID-19 must be widely available to bring consumer confidence back to its pre-pandemic levels, while he repeated that the Fed still has ammunition in hand to support the economy, but reiterated the central bank’s opposition to negative interest rates.

Tuesday, May 19, 2020: Spreads Narrow on Franco-German Recovery Plan

The euro climbed and the eurozone sovereign bond yield spreads fell further, as France and Germany signaled that they were ready to let a proposed €500 billion ($546 billion) Europe Recovery Fund dispense grants, rather than loans to the region’s struggling members.

The news triggered profit-taking in the Stoxx 600, dropping 0.9%, while the yield spread between the Italian and German 10-year debt tightened to its lowest in over a month, along with the spreads of other countries from the bloc’s southern periphery.

Wednesday, May 20, 2020: Moderna Stock Drops as Vaccine Data Hype Weakens

Shares in US biotech group Moderna posted another 3.2% loss in pre-market on Wednesday, after a well-known health news portal implied that the company has not yet reached the amount of progress towards creating a successful COVID-19 vaccine that it would like the market to believe.

The report pushed Moderna’s stocks down 10% earlier after the website argued that the firm’s statement on Monday, which referenced the antibodies developed by its experimental drug, offered very little information and was too small to be deemed helpful.

Thursday, May 21, 2020: Nvidia Likely to Reveal Strong Earnings for Q1

US chipmaker Nvidia is due to release its first-quarter earnings report after the bell on Thursday, with the company looks set to surpass $1 billion in quarterly data-center sales for the first time.

While it is unlikely that Nvidia will be able to dodge overall demand slowdown in the wake of pandemic closures, analysts are focusing on the firm’s balance sheet, cash flow, and product categories, each of which is expected to have remained strong in the current situation.