A deluge of earnings, a wave of beats but a sea of red today as macro concerns dominate. Spanish inflation set the tone as July harmonised MoM CPI decreased to -1.6% (vs est -1% and +0.4% previously). Our economist noting this suggests that in spite of ECB efforts and the EU Recovery Fund, the fundamentals of the euro structure mean outright deflation taking hold in the Eurozone periphery is a very real risk. Germany GDP data out shortly after and it didn’t help much (-10.1% QoQ). Note that Germany is not even particularly tied to discretionary services (imagine how other economies will do). Elsewhere we had EZ economic sentiment moving in the right direction this month but we continue to think that the real issue is the consumer side of things (especially unemployment). Over in the US, Initial jobless claims rose for a second week (1434k vs 1416k previously). GDP data not good either as the economy contracted -32.9% YoY (biggest drop on record). Imagine when unemployment numbers start to really go up.
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