S&P 500 Hits a Record as Traders Look Past Economic Devastation; U.S. Manufacturing Output Rises Strongly in July, But Still Below Pre-pandemic Levels; UK Economy Plunges Into Deepest Recession Since Records Began; U.S. and European Firms Face $1 Trillion in Costs to Relocate Their Chinese Supply Chains, BofA Says.
S&P 500 Hits a Record as Traders Look Past Economic Devastation.
The S&P 500 climbed to a record on Tuesday, reaching a level few would have predicted a few months ago, and defying the economic storm facing the United States.
The index rose only slightly, but it was enough to eclipse a high reached in February, before the fast-spreading virus set off a staggering decline in stock prices.
The recovery has been fueled by trillions of dollars pumped into financial markets by the Federal Reserve and enormous spending by the government to protect American workers and businesses from the worst of the downturn.
Source: The New York Times.
U.S. Manufacturing Output Rises Strongly in July, But Still Below Pre-pandemic Levels
U.S. factory output increased more than expected in July, boosted by a surge in motor vehicle production, though activity remained below its pre-pandemic peak.
The Federal Reserve said on Friday that manufacturing production rose 3.4% last month after advancing 7.4% in June. The third straight monthly gain left factory output about 8% below its level in February. Economists polled by Reuters had forecast manufacturing output would increase 3.0% in July.
UK Economy Plunges Into Deepest Recession Since Records Began
The Office for National Statistics (ONS) said gross domestic product (GDP), the broadest measure of economic prosperity, fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955.
After a decline of 2.2% in the first quarter, the figures confirm the UK economy plunged into recession after the Covid-19 outbreak spread in March and the government imposed a nationwide lockdown to contain it. Economists consider two consecutive quarters of shrinking GDP as the technical definition of a recession.
Source: The Guardian.
U.S. and European Firms Face $1 Trillion in Costs to Relocate Their Chinese Supply Chains, BofA Says
Even before the pandemic, Bank of America (BofA) survey of global analysts found that companies were shifting away from globalization and towards a more localized approach when it came to their supply chains.
The report revealed that the pandemic had caused 80% of global sectors to face supply chain disruptions, forcing over 75% to widen the scope of their existing re-shoring plans.