(05 AUGUST 2020)DAILY MARKET BRIEF 1:Sentiment mixed on lingering US fiscal talks

US stocks posted modest gains and equities in Asia lacked direction, as better-than-expected US factory orders didn’t better the mood in the absence of an agreement for more US fiscal stimulus and rumors that the US and China will review their phase-one trade deal spurred worries that the deal could go down the plughole amid rising political tensions on Hong Kong’s new national security law.

Meanwhile, a massive blast in Beirut briefly sent the price of WTI above $42 per barrel. There is little clarity on whether the explosion was an accident or an attack, but investors bought oil on suspicion that the blast could threaten stability in the region and weigh on supply. We believe that any menace to the supply side should have a marginal positive impact on oil prices in a market swamped with excess of oil. Therefore, the weakening demand prospects should continue driving the oil markets lower in the medium run.