Stocks Head For Weekly Gain As Fears Ease & Retail Sales Smash Forecasts
Fiona Cincotta June 19, 2020 4:41 PM
European bourses are heading for a cautiously higher start after a mixed close on Wall Street in low volumes. Shares drifted in the Asian session. European markets are still heading for a weekly gain despite concerns of a second wave of coronavirus, which dragged the markets lower last week, still lingering.
UK retail sales smash expectations
UK retail sales surged +12% in May compared with the previous month, smashing expectations of a more conservative +5.7% increase, as lockdown measures started to ease. The jump in sales goes some way to making up from the record -18.1% decline in sales the previous month.
Given that lockdown measures didn’t start to ease until the second half of May, these figures are certainly encouraging. However, there will almost certainly be a strong element of pent up demand in the record-breaking data. With unemployment low and the labour market supported by the government’s furlough scheme, there is a good chance that retail sales could remain buoyed for the coming month. What will be interesting to see is whether retail sales manage to remain positive when the government starts withdrawing from the furlough scheme.
Oil extends gains on strong supply / demand fundamentals
Oil prices are on the rise, building on gains from the previous session, as demand continued to show signs of improvement whilst OPEC members also pledged to meet their supply cuts commitments. With the expectation growing that overproduction in May, will be compensated for over the coming months with lower production, the net effect will be positive for the price of oil. Iraq and Kazakhstan have revealed plans to compensate with lower production, investors are optimistic that they won’t be alone. WIT is trading +1.3% in early trade as it looks to target $40.00.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.