The IHS Markit US Services PMI rose to 54.8 in August 2020 from 50.0 in the previous month, easily beating market expectations of 51.0, a preliminary estimate showed. The latest reading signalled the first expansion in service sector business activity since the start of 2020, and at the fastest rate since March 2019. Overall new business grew firmly, supported by a sharp upturn in new export orders, and employment growth was the steepest since February 2019. On the price front, competitive pressures led to a softer increase in selling prices despite a sharp increase in cost burdens. Looking ahead, business optimism eased slightly since July.

Canada’s TSX lost 89 points or 0.5% to 16,518 on Friday. Oil prices lost near 1% to $42.3 a barrel on Friday, after falling more than 2.5% during the session amid mounting concerns over fuel demand recovery. Meanwhile, gold booked its second straight weekly decline as a strong rebound in the USD and strong economic data nudged prices lower. Markit PMI data showed weak reading in Europe and Australia, but a 19-month high in US manufacturing and a 17-week high in US services. The TSX closed flattish for the week.

Wall Street closed in the green on Friday to extend the previous session’s gains, book a weekly gain and score fresh S&P and Nasdaq highs, as strong US economic data nudged sentiment higher and offset policy uncertainty. On the macro side, Markit data showed US manufacturing activity reached a 19-month high in August, while services were at the strongest pace in 17 months. Meanwhile, existing home sales for July jumped 24.7% month-over-month and the average selling price also hit an all-time high of $304,100. The Dow Jones gained 191 points or 0.7% to 27,930. The S&P 500 climbed 12 points or 0.3% to a new record of 3397. The Nasdaq jumped 47 points or 0.4% to 11,312. For the week, the Dow Jones was nearly flat, the S&P 500 gained 0.7%, and the Nasdaq soared 2.7%.

Oil prices were down near 1% to $42.3 a barrel on Friday, after falling more than 2.5% during the session amid mounting concerns over fuel demand recovery. The latest PMI data showed a loss of growth momentum in private sector activity in Germany, France and Australia amid renewed restrictions due to a resurgence of coronavirus cases. In addition, India’s crude oil imports fell in July to its lowest in over a decade. Moreover, an internal report by the OPEC+ showed it expects oil demand to fall by 9.1 million bpd in 2020, 100,000 bpd more than in its previous forecast, and if a prolonged second wave of infections hits China, India, Europe and the US in the second half of the year, demand could drop by 11.2 million bpd. The report also showed that some members would need to cut production by 2.31 million barrels per day to make up for their recent oversupply. Still, for the week, WTI crude gained near 0.6%, the 3rd consecutive week of gains.

European stocks closed in the red on Friday with the DAX 30 falling 65 points or 0.5% at 12,765, its weakest level since August 10th. Other major country indexes across the region were down between 0.2% and 0.4%. Weaker-than-expected PMI data signaled the recovery in the Eurozone economy slowed sharply during August amid a resurgence in COVID-19 infections. Companies continued to cut jobs and new business growth eased following July's steep rebound from its worst recession ever. Investors also continued to monitor US-China relations after the Trump administration did not confirm Beijing's claims that Phase One trade deal discussions would restart in the coming days. For the week, the DAX 30 lost 1.1%.

The IHS Markit Germany Manufacturing PMI rose to 53 in August of 2020 from 51 in July, beating market forecasts of 52.5. The reading pointed to the strongest increase in factory activity since September of 2018, preliminary figures showed, a sign the economy is recovering form the coronavirus hit. Production grew sharply, new work and export sales rose markedly for the second month and job shedding slowed. The only negative directional influence was from the stocks of purchases component, with goods producers reporting an accelerated decline in preproduction inventories. Efforts to streamline stocks were indeed reflected in only a marginal rise in manufacturers’ purchasing activity, the rate of growth of which was well below those of both output and new orders. Also, business expectations were the strongest in two-and-a-half years.

The IHS Markit France Manufacturing PMI fell to 49 in August of 2020 from 52.4 in July, well below market forecasts of 53.7. The reading pointed to another contraction in the manufacturing sector after two months of growth, preliminary figures showed. Payrolls were cut sharply although foreign sales fell at a slower pace and outstanding business rose modestly. Looking forward, firms remained optimistic towards the 12-month business outlook although less confident than in July.

Sales of previously owned houses in the US jumped 24.7 percent from the previous month to a seasonally adjusted annual rate of 5.86 million units in July of 2020. That was a new record increase in existing home sales, bringing the total to the highest since December of 2006 amid low interest rates. Single family sales went up 23.9 percent and those of condos 31.8 percent. Each of the four major regions attained double-digit increases. There were 1.5 million previously owned homes on the market in July, down from 1.9 million a year ago. The median existing house price increased to a record USD 304,100. Year-on-year, existing home sales went up 8.7 percent. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021”, Lawrence Yun, NAR’s chief economist said.

The consumer confidence in the Euro Area rose by 0.3 points to -14.7 in August 2020 from -15 in the previous month and compared with market expectations of -15, a flash estimate showed. In the European Union as a whole, consumer sentiment went up by 0.1 points to -15.5. Stil, both indicators remain well below their long-term averages of -11.1 (Euro Area) and -10.5 (European Union).