Ongoing Markets Commentary: The COVID Effect - CCTrader

Ongoing Markets Commentary: The COVID Effect

By CCTrader - July 3, 2020 | comment/s

The stock market rally is rapidly broadening out, with lagging sectors and markets beginning to catch up. There have been plenty of worries in the marketplace: equity overvaluation, a China-U.S. cold war, the second wave of Covid-19 infections and slow economic reopening, and so on. So far, all of these risks have paled in comparison to the amount and scope of fiscal support and monetary creation.

Asian shares rallied to a four-month high on robust U.S. payroll data and a brisk pickup in Chinese service sector activity but a surge in coronavirus cases in the United States kept a lid on further risk-taking.

The summary as at 03.07.20

  • Oil prices eased, reversing earlier gains, as the resurgence of the coronavirus globally and in the United States, the world’s largest oil consumer, stoked worries that a fuel demand recovery could stall;
  • The United States reported more than 55,000 new COVID-19 cases on Thursday, a new daily global record for the coronavirus pandemic, as infections rose in a majority of states;
  • The U.S. economy created jobs at a record clip in June as more restaurants and bars reopened, but 31.5 million Americans were collecting unemployment checks in the middle of the month, and a resurgence in COVID-19 cases suggested the labor market could suffer a setback in July;
  • China’s services sector expanded at the fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revised consumer demand, a private survey showed, though companies continued to shed jobs;
  • Germany’s accountancy watchdog has denied blame for failing to spot problems at collapsed payments firm Wirecard, the latest in a string of agencies to shirk responsibility following the country’s biggest accounting scandal;
  • French unions and regional leaders urged Airbus on Thursday to step back from a Big Bang restructuring as workers across Europe waited for a factory-by-factory breakdown of 15,000 job cuts brought about by the coronavirus pandemic;
  • German luxury carmaker Daimler said it will deepen a strategic partnership with Farasis Energy (Ganzhou), a pact which includes taking an equity stake of around 10% in the Chinese battery cell manufacturer.

The summary as at 02.07.20

  • Asian stocks tracked Wall Street higher although sentiment was cautious ahead of U.S. employment data while copper prices jumped to more than six-month highs on a better global outlook and supply fears in top producer Chile;
  • Oil prices dipped after the United States recorded its biggest one-day spike in coronavirus cases and California reimposed some lockdown measures, stoking worries a resurgence in COVID-19 cases will stall a recovery in fuel demand;
  • The U.S. economy likely created jobs at a record clip in June as more restaurants and bars resumed operations, which would offer further evidence that the COVID-19 recession was probably over, though a surge in cases of the coronavirus threatens the fledgling recovery;
  • Russians opened the door to Vladimir Putin staying in power until 2036 by voting overwhelmingly for constitutional changes that will allow him to run again for president twice, but critics said the outcome was falsified on an industrial scale;
  • The U.S. House of Representatives passed legislation on Wednesday that would penalize banks doing business with Chinese officials who implement a national security law that House Speaker Nancy Pelosi called a “brutal, sweeping crackdown” on Hong Kong;
  • A COVID-19 vaccine developed by German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer has shown potential and was found to be well tolerated in early-stage human trials, the companies said on Wednesday;
  • Police and public prosecutors raided Wirecard’s headquarters in Munich and four properties in German and Austria on Wednesday as they widened their investigation into the financial payments company that collapsed last week;
  • Europe’s Airbus left the door open on Wednesday to scaling back its planned 15,000 job cuts in exchange for government-funded labour schemes and research, as its coronavirus restructuring stoked political and union alarm.

The summary as at 01.07.20

European stocks are expected to open in flat today, getting a boost from better-than-expected Chinese factory activity in June.

  • Asian stocks struggled for headway as the second half of the year got underway, with improving economic data offset by worries that surging coronavirus cases in the United States could derail the world’s recovery before it properly begins;
  • Oil prices rose after data showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world;
  • Asia’s factory pain showed signs of easing in June, as a rebound in China’s activity offered some hope the region may have passed the worst of the devastation caused by the coronavirus pandemic;
  • New U.S. COVID-19 cases rose by more than 47,000 on Tuesday according to a Reuters tally, the biggest one-day spike since the start of the pandemic, as the government’s top infectious disease expert Dr. Anthony Fauci warned that number could soon double;
  • Boeing failed to submit certification documents to the U.S. Federal Aviation Administration detailing changes to a key flight control system faulted in two fatal crashes, a long-awaited government report seen by Reuters has found;
  • Airbus is cutting 15,000 jobs within a year, including 900 already earmarked in Germany, saying its future is at stake after the coronavirus outbreak paralysed air travel;
  • “Black Swan” reinsurance schemes backed by governments could help businesses get insurance pay-outs after huge shocks such as the coronavirus pandemic, Lloyd’s of London said;
  • Australia’s corporate regulator said the Australian securities unit of France’s Societe Generale SA has pleaded guilty to charges of breaching client money provisions.

The summary as at 30.06.20

European stocks are expected to open in broadly flat to positive territory on Tuesday with investors likely to be buoyed by a further sign of an economic recovery in China.

  • Asian shares rose after data showed China’s manufacturing sector grew more than expected in June, a hopeful sign for a global economy still struggling to recover from the sweeping impact of the coronavirus crisis;
  • Oil prices fell as optimism for a straightforward recovery in fuel demand faded and a looming increase in supply weighed on the market, with Libya’s state oil company flagging progress on talks to resume exports;
  • China’s parliament passed national security legislation for Hong Kong, setting the stage for the most radical changes to the former British colony’s way of life since it returned to Chinese rule almost exactly 23 years ago;
  • China’s factory activity expanded at a stronger pace in June in a boost to hopes for a quick economic recovery globally and at home, but the persistent weakness in export orders suggests the coronavirus crisis will remain a drag on growth for some time;
  • There was a resurgence in Covid numbers in the US particularly in Florida and Texas where intensive care unit are already 95% full. The headlines continue to be scare as WHO’s Head Ghebreyesus already said “the worst is yet to come”.
  • The US Pending Home Sales Index jumped a record 44.3% to 99.6 from an all-time low. It stands 10.6% below February’s value and 5.4% below its year-earlier reading;
  • Poland’s President Andrzej Duda got the most votes in the first round of the country’s presidential election, final results showed, as the focus turned to what looks set to be a close-fought run-off vote on July 12;
  • Wirecard North America, a unit of German payments company Wirecard AG, on Monday said it has put itself up for sale, days after the troubled parent firm filed for insolvency;
  • Alaskan officials on Monday approved BP’s sale of its oil and gas leases in the state to closely held Hilcorp Energy as part of a previously announced $5.6 billion deal;
  • Airbus was finalising an imminent restructuring plan involving thousands of job cuts on Monday as its chief executive confirmed plans to hold output down by 40% for two years.

The summary as at 26.06.20

Stock futures were little changed in Friday early morning trade following the release of the Fed’s latest bank stress-test results and disappointing quarterly numbers out of Nike.

  • Asian stock markets ground higher, and are set to end a choppy week more or less where they began it as surging coronavirus infections cast a shadow over encouraging economic data and checked hopes for a swift global recovery;
  • Oil prices rose, extending gains from the previous day on optimism about recovering fuel demand worldwide, despite a surge in coronavirus infections in some U.S. states and indications of a revival in U.S. crude production;
  • The U.S. Federal Reserve announced on Thursday it will cap big bank dividend payments and bar share repurchases until at least the fourth quarter after finding lenders faced significant capital losses when tested against an economic slump caused by the coronavirus pandemic;
  • Governor of Texas Greg Abbott temporarily halted the state’s reopening on Thursday as COVID-19 infections and hospitalizations surged and the country set a new record for a one-day increase in cases;
  • The seasonally adjusted number of continuing claims, which lag initial claims by a week, fell by 767k to 19.5mn in the week ended 6 June. This is well below the all-time high of 24.9mn in the week ended 9 May and indicates that as businesses reopen, furloughed workers are cautiously getting recalled;
  • US manufacturers’ orders for durable goods rose 15.8% in May, while shipments rose 4.4% and inventories rose 0.1%;
  • Support for year-long pro-democracy protests in Hong Kong has slipped, now getting the backing of a slim majority, as the city braces for the imposition of Beijing-drafted national security legislation, a survey conducted for Reuters showed;
  • Wirecard collapsed owing creditors almost $4 billion after disclosing a gaping hole in its books that its auditor EY said was the result of a sophisticated global fraud;
  • Lufthansa shareholders backed a 9 billion euro government bailout, securing the future of Germany’s flagship airline after it was brought to the brink of collapse by the COVID-19 pandemic;
  • Airbus has reached a crucial jetliner production target and smoothed recent industrial problems as it embarks on a new phase in its response to the coronavirus crisis, the planemaker’s chief operating officer Michael Schoellhorn said.

The summary as at 25.06.20

Stocks futures were lower in overnight trading on Wednesday, following a steep market sell-off triggered by intensifying worries about a coronavirus resurgence.

  • Asia’s stock markets slipped, bonds rose and the U.S. dollar was firm as surging U.S. coronavirus cases, global trade tensions and an International Monetary Fund downgrade to economic projections knocked confidence in a recovery;
  • Oil prices slipped, extending losses of more than 5% in the previous session, weighed down by record-high U.S. crude inventories and worries that a rapid resurgence in COVID-19 cases could choke a revival in fuel demand;
  • An influential foundation focused on preparation and response to epidemics that is backing nine potential coronavirus vaccines has identified manufacturers with capacity to produce four billion doses a year, the group’s top manufacturing expert told Reuters;
  • The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for new U.S. financial sanctions;
  • The governors of New York, New Jersey and Connecticut on Wednesday ordered travelers from eight other U.S. states to be quarantined for two weeks on arrival, as COVID-19 infections surged in regions spared the brunt of the initial outbreak;
  • Bayer, after more than a year of talks, agreed to pay as much as $10.9 billion to settle close to 100,000 U.S. lawsuits claiming that its widely-used weed killer Roundup caused cancer, resolving litigation that has pummeled the company’s share price;
  • The United States moved to maintain pressure on the European Union in a 16-year dispute over aircraft subsidies by flagging possible changes in tariffs on EU goods, as the date for a decision on reciprocal EU duties slipped to the autumn;
  • Italy has approved a decree offering state guarantees for a 6.3-billion euro loan to Fiat Chrysler’s Italian unit, the Treasury said on Wednesday, paving the way for the largest crisis loan to a European carmaker;
  • Disney said on Wednesday it is delaying the opening of its California-based theme parks beyond July 17 as state officials will not be issuing theme park reopening guidelines until after July 4.

The summary as at 23.06.20

European stocks are expected to open higher Tuesday despite some concerns over the state of the U.S.-China trade deal, and a surge of coronavirus cases in the U.S. and elsewhere. WTI closed above the psychologically important level of $40 per barrel for the first time since Russia/Saudi Arabia’s announcement of increased production in early March and gold closed at an almost eight-year high.

  • Asian shares see-sawed in a wild ride following confusing statements from the White House over the U.S.-China trade deal, with President Donald Trump later clarifying the pact was “fully intact”;
  • Oil prices were volatile after markets were spooked by surprise comments from White House trade adviser Peter Navarro saying a hard-won U.S-China trade deal was “over”, though he later said his comments had been taken out of context;
  • The German government held talks with Lufthansa’s biggest shareholder on Monday to persuade him to accept the terms of a 9 billion euro coronavirus bailout that it has offered the airline group;
  • European Union antitrust regulators on Monday warned about the possible anti-competitive effects of the London Stock Exchange’s $27 billion bid for data and analytics company Refinitiv as they launched a four-month investigation into the deal;
  • Volkswagen AG’s Mexican unit on Monday said about 2% of its workers tested for coronavirus had contracted the disease at some point, underlining the challenge faced by automakers in reopening factories before the pandemic has peaked in Mexico;
  • Apple has confirmed it will transition its Mac laptop and desktop computers to its own ARM-based processors. The move means that Macs will run on the same type of chips as the firm’s iPhones and iPads, rather than Intel’s. Intel had faced problems manufacturing its own designs, leading it to issue a public apology to computer-makers.

The summary as at 22.06.20

  • The coronavirus reproduction rate in Germany jumped to 2.88 on Sunday, up from 1.79 a day earlier, the Robert Koch Institute for public health said. A rate of less than one is needed to gradually contain the disease. Germany has been widely regarded as a success story in Europe in terms of containing the coronavirus. But infections have been rising again;
  • Brent crude prices nudged higher on tighter supplies from major producers, but a record rise in global coronavirus cases raised concerns a recovery in fuel demand could stall, checking gains;
  • China left its benchmark lending rate unchanged for the second straight month at its June fixing, matching market expectations, after the central bank kept borrowing costs on medium-term loans steady last week;
  • Senior Hong Kong lawyers expressed alarm on Sunday at plans for the city’s leader to select judges for national security cases, calling it the most serious challenge to the territory’s vaunted judicial independence since the 1997 handover to Chinese rule;
  • Wirecard AG said there was a likelihood that the 1.9 billion euros reported missing from its accounts simply did not exist in the first place;
  • Lufthansa will seek to avoid a grounding and insolvency, Chief Executive Carsten Spohr said on Sunday, before a showdown between the airline’s biggest shareholder and the German government over the terms of a 9-billion-euro bailout;
  • Italy is close to unveiling the approval of guarantees for a 6.3 billion euro financing of Fiat Chrysler, two sources familiar with the matter said, paving the way for the largest crisis loan for a European carmaker.

The summary as at 17.06.20

Global equity markets closed higher on Tuesday on calming of tensions between the US and China, as well as a stronger than expected retail sales report out of the US. The steady increases in COVID-19 cases in the southern US and parts of China continue to be in the backdrop and are being closely monitored by the markets.#

  • Asian share markets took a breather as a resurgence of coronavirus cases challenged market confidence in a rapid economic recovery, even as the rebound in U.S. retail sales in May broke all records;
  • Oil prices fell as data showed an increase in U.S. crude and fuel inventories, raising the prospect of oversupply as a potential second wave of the coronavirus pandemic threatened to halt any recovery of demand;
  • Scores of domestic flights in and out of Beijing were cancelled as officials ramped up attempts to contain a coronavirus outbreak in the Chinese capital over the past week that has sparked fears of renewed wider contagion;
  • A cheap and widely used steroid called dexamethasone has become the first drug shown to be able to save the lives of COVID-19 patients in what scientists said is a “major breakthrough” in the coronavirus pandemic;
  • A full U.S. economic recovery will not occur until the American people are sure that the novel coronavirus epidemic has been brought under control, Federal Reserve Chair Jerome Powell said on Tuesday, as he began the first of two days of hearings before U.S. lawmakers;
  • Total US retail trade and food services sales surged 17.7% in May, following a cumulative decline of 21.8% over March and April. The May recovery brings retail trade and food services sales within 7.9% of the pre-pandemic February levels.
  • BHP said that David Lamont, a former mining executive who has more recently been at global biotech firm CSL, would take the reins as company’s chief financial officer from the start of December;
  • The unlisted biotech firm CureVac will become the second company to launch human trials of an experimental coronavirus vaccine in Germany, two people familiar with the plans told Reuters on Tuesday;
  • Bayer said on Tuesday it will scrap a nearly $1 billion project to produce the chemical dicamba in the United States, but said the move is unrelated to a federal court decision that blocked sales of weed killers based on the product.

The summary as at 16.06.20

Asian shares and Wall Street futures rallied as the formal start of the Federal Reserve’s corporate bond-buying programme boosted global investor sentiment and calmed earlier worries about the second wave of coronavirus infections.

  • Oil prices slid on lingering concerns over the threat to fuel demand from the resurgence of new coronavirus infections around the world, though hopes for further cuts in crude supplies stemmed losses;
  • The Federal Reserve said it will start purchasing corporate bonds on Tuesday through the secondary market corporate credit facility, one of several emergency facilities recently launched by the U.S. central bank to improve market functioning in the wake of the coronavirus pandemic;
  • Beijing banned high-risk people from leaving the Chinese capital and halted some transportation services to stop the spread of a fresh coronavirus outbreak to other cities and provinces;
  • The Bank of Japan kept monetary settings steady and stuck to its view that the economy will gradually recover from the coronavirus pandemic, signaling that it has taken enough steps to support growth for now;
  • German drug maker CureVac, in which the government is taking a sizeable stake to help fund a COVID-19 vaccine, is planning an initial public offering in the United States next month, a finance ministry document seen by Reuters on Monday showed;
  • The world’s biggest asset manager BlackRock has pumped about 16 billion euros into 810 European companies since the end of January, more than half of them in distress due to the coronavirus pandemic, a source with direct knowledge of the matter told Reuters;
  • The London Stock Exchange will not offer concessions to EU antitrust regulators reviewing its $27 billion bid for data and analytics company Refinitiv, two people familiar with the matter said, a move which will likely trigger a four-month probe.

The summary as at 15.06.20

Asian shares stumbled and oil prices slipped as fears of a second wave of coronavirus infections in Beijing sent investors scurrying for safe-havens while underwhelming data from China further weighed on sentiment.

  • Oil fell, extending losses from last week, as new coronavirus infections hit China and the United States, raising the prospect that renewed outbreaks of the virus could weigh on the recovery of fuel demand;
  • Beijing reported its second consecutive day of record new numbers of COVID-19 cases, adding urgency to efforts to rein in a sudden resurgence of the coronavirus in the Chinese capital;
  • China’s factories stepped up production for a second straight month in May, as the country shook off the economic torpor of the coronavirus, although the weaker-than-expected gain suggested the recovery remained fragile;
  • President Emmanuel Macron said on Sunday he was accelerating France’s exit from its coronavirus lockdown and that the crisis had laid bare the country’s need for greater economic independence;
  • AstraZeneca has signed a contract with European governments to supply the region with its potential vaccine against the coronavirus, the British drug maker’s latest deal to pledge its drug to help combat the pandemic;
  • Unilever said it will invest 1 billion euros in a fund to invest in climate change projects and reduce to net-zero greenhouse gas emissions from all its products by 2039, 11 years ahead of the Paris Agreement deadline;
  • EasyJet aircraft will take to the skies on Monday for the first time since March 30, as the British carrier resumes a small number of mainly domestic flights after weeks of lockdown.

The summary as at 12.06.20

Futures were higher early Friday morning after growing worries of a resurgence in coronavirus cases sent equity prices plunging.

  • Asian shares fell sharply after Wall Street and oil tumbled over growing concerns that a resurgence of coronavirus infections could stunt the pace of recovery in economies reopening from lockdowns;
  • Oil prices fell, extending heavy overnight losses as a surge in U.S. coronavirus cases this week raised the prospect of a second wave of the COVID-19 outbreak hitting demand in the world’s biggest consumer of crude and fuel;
  • Facing budget shortfalls and double-digit unemployment, governors of U.S. states that are COVID-19 hotspots on Thursday pressed ahead with economic reopenings that have raised fears of a second wave of infections;
  • A $94 billion emergency fund that can be tapped without parliamentary oversight has been branded Japanese Prime Minister Shinzo Abe’s “pocket money” by opposition lawmakers alarmed at its unprecedented size;
  • The number of Americans seeking jobless benefits fell last week, but millions laid off because of COVID-19 continue to receive unemployment checks, suggesting the labor market could take years to heal from the pandemic even as hiring resumes;
  • Unilever proposed on Thursday to ditch its dual Anglo-Dutch legal structure and create a single company in Britain to give it more flexibility for mergers and acquisitions as the coronavirus pandemic overwhelms businesses worldwide;
  • Commerzbank, under fire from a top investor for its strategy and leadership, is focused on cutting costs, the German lender’s chief executive said on Thursday;
  • The clash between British Airways and its unions over 12,000 job losses intensified on Thursday as the Unite union said it had approached the European Commission to register its opposition to BA parent company’s acquisition of Air Europa.

The summary as at 11.06.20

“We’re not thinking about raising rates. We’re not even thinking about raising rates,” Fed Chairman Jerome Powell said. “What we’re thinking about is providing support for the economy. We think this is going to take some time.”

  • Asian shares eased while bonds rallied after a downbeat economic outlook from the U.S. Federal Reserve stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery;
  • Oil prices fell more than 2% on worries about slow demand growth with coronavirus cases rising, U.S. crude stockpiles hitting an all-time high and the U.S. Federal Reserve projecting recovery from the pandemic would take years;
  • The U.S. Federal Reserve on Wednesday signaled it plans years of extraordinary support for an economy facing a torturous slog back from the coronavirus pandemic, with policymakers projecting the economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at year’s end;
  • Total U.S. coronavirus cases surpassed 2 million on Wednesday, according to a Reuters tally, as health officials urge anyone who took part in massive protests for racial justice to get tested;
  • George Floyd’s younger brother took his grief to the U.S. Congress on Wednesday with an impassioned plea that lawmakers not let his brother’s death be in vain, lamenting that he “didn’t deserve to die over $20” in a what he called a lynching;
  • European food-ordering firm Just Eat Takeaway.com said on Wednesday it had agreed to buy U.S. peer Grubhub in an all-stock deal that, if completed, would create the world’s largest food delivery company outside China;
  • Fiat Chrysler and Peugeot maker PSA face a lengthy EU antitrust investigation after declining to offer concessions to allay EU antitrust concerns about their planned $50 billion merger, people familiar with the matter said on Wednesday;
  • Lufthansa admitted on Wednesday that the positions of up to 26,000 employees are surplus to requirements, suggesting many more jobs will be cut at the German carrier than a figure of more than 10,000 flagged a few weeks ago.

The summary as at 10.06.20

Stock futures rose in early morning trading as investors await clarity on the state of the economy and further stimulus from the Federal Reserve’s policy meeting.

  • Asian stock markets eked out a 10th consecutive session of gains, but momentum ebbed as doubts about the global recovery from the pandemic returned ahead of the U.S. Federal Reserve meeting;
  • Oil prices fell after data showed a rise in crude and fuel stockpiles in the United States, reviving concerns about oversupply and falling fuel demand in the world’s largest crude consumer amid the coronavirus outbreak;
  • The Federal Reserve completes its latest policy meeting on Wednesday with attention turning from its massive response to the coronavirus pandemic and toward its still-developing plans to strengthen and lengthen a nascent economic recovery;
  • China’s producer prices fell by the sharpest rate in more than four years, underscoring pressure on the manufacturing sector as the COVID-19 pandemic reduces trade flows and global demand;
  • U.S. Secretary of State Mike Pompeo on Tuesday chided HSBC for backing moves by China to end Hong Kong’s autonomy, saying such “corporate kowtows” got little in return from Beijing;
  • AstraZeneca on Tuesday received $23.7 million in funding from a U.S. government agency to advance the development of antibody-based COVID-19 treatments as the British drugmaker ramps up efforts beyond its potential vaccine to combat the pandemic;
  • SoftBank Group Corp-owned chip technology firm Arm said the chief executive officer of its China joint venture, Allen Wu, has stepped down and been replaced.

The summary as at 09.06.20

The stock market rallied once again on Monday, pushing the S&P 500 into the green for the year as the benchmark completed its wild round trip amid the coronavirus pandemic. Investors are growing more and more optimistic about a speedy economic recovery as states continue to reopen.

  • Asian stocks rallied for their ninth straight day as the lifting of coronavirus lockdowns in many countries fed investor hopes of a relatively quick global economic recovery;
  • The May jobs report and a rebound in both car sales and mortgage applications suggests the economy is experiencing a more vigorous rebound than anticipated. However, we suspect the Fed will give a more nuanced assessment, warning of many potential potholes in the road ahead;
  • Oil prices climbed as the easing of coronavirus lockdown measures across the globe lifted trader hopes for a swift recovery in demand, though gains were capped by the spectre of persistent oversupply in the market;
  • The U.S. economy ended its longest expansion in history in February and entered recession as a result of the coronavirus pandemic, the private economics research group that acts as the arbiter for determining U.S. business cycles said on Monday;
  • Hong Kong leader Carrie Lam warned the city could not afford further “chaos” as it marked the first anniversary of the start of rolling mass pro-democracy protests;
  • Thousands of mourners braved sweltering Texas heat on Monday to view the casket of George Floyd, whose death after a police officer knelt on his neck ignited worldwide protests against the mistreatment of African Americans and other minorities by U.S. law enforcement;
  • Fiat Chrysler’s planned $50 billion merger with Peugeot maker PSA has hit a bump after EU regulators voiced concerns about the companies’ market share in small vans, indicating concessions may be required, sources said;
  • Volkswagen replaced Herbert Diess as chief executive of the VW brand on Monday and installed chief operating officer Ralf Brandstaetter to lead cost-cutting efforts at the company’s largest plants in Germany;
  • A merger between AstraZeneca and Gilead Sciences Inc is unlikely due to significant political hurdles, Wall Street analysts said on Monday after a Bloomberg report that the British drugmaker last month had contacted its U.S. rival about a deal.

The summary as at 08.06.20

Global share prices edged higher after a surprise recovery in U.S. employment provided cause for optimism that global economies could quickly revive after many weeks of lockdowns aimed at controlling the coronavirus pandemic.

  • Oil crept higher, but gave up big early gains as optimism over major crude producers’ deal to extend record output cuts gave way to disappointment that the accord didn’t extend beyond the end of July;
  • Japan’s economy braced for its worst postwar slump even as the first-quarter GDP contracted less than initially thought, as the coronavirus crisis slams the brakes on global growth and raises pressure on Tokyo to cushion the blow to business and consumers;
  • A mounting wave of protests demanding police reform after the killing of a black man in Minneapolis swept across the United States on Sunday, building on the momentum of huge demonstrations across the country the day before;
  • The de facto leader of Samsung Group, Jay Y. Lee, appeared before a South Korean court, awaiting a ruling on whether new allegations including accounting fraud and stock manipulation will send him back to jail after more than two years of freedom;
  • AstraZeneca has approached U.S. rival Gilead Sciences about a possible merger to form one the world’s largest drug companies, Bloomberg News reported on Sunday, citing people familiar with the matter;
  • British Prime Minister Boris Johnson is preparing to announce tough laws to prevent foreign takeovers that pose risks to national security amid growing concern about the influence of China, The Times newspaper reported;
  • A French emergency plan for the aerospace industry to be unveiled this week could be worth up to 10 billion euros, including an expected 1-billion-euro investment fund, business newspaper Les Echos reported on Sunday.

The summary as at 05.06.20

Asian stocks erased early losses and were poised for their biggest weekly rise since 2011 while the euro hovered near a 1-1/2 month high as Europe’s central bank surprised with more stimulus, fueling hopes for a global rebound.

  • Oil prices nudged higher as traders await cues from a meeting that could take place as soon as this weekend where major oil producers will discuss whether to extend record production cuts;
  • The U.S. unemployment rate likely shot up to almost 20% in May, a new post World War Two record, with millions more losing their jobs, exposing the horrific human toll from the COVID-19 crisis;
  • U.S. Secretary of State Mike Pompeo on Thursday warned American investors against fraudulent accounting practices at China-based companies and said the Nasdaq’s recent decision to tighten listing rules for such players should be “a model” for all other exchanges around the world;
  • The European Central Bank approved a bigger-than-expected expansion of its stimulus package on Thursday and extending its duration to the first half of 2021. This is seen as a very aggressive stimulus plan from Lagarde that combined with Germany’s new fiscal stimulus package boosted the risk-on-mood across the Block with the Euro skyrocketing and going as up as 1.1350 again the USD;
  • AstraZeneca has doubled manufacturing capacity for its potential coronavirus vaccine to 2 billion doses in two deals involving Microsoft billionaire Bill Gates that guarantee early supply to lower income countries;
  • A U.S. appeals court has blocked Bayer from selling an agricultural weed killer in the United States, the latest setback for a business already fighting an expensive legal battle over another product;
  • The boss of British Airways said its parent company IAG was burning through $223 million a week and could not guarantee its survival, prompting him to urge unions to engage over 12,000 job cuts.

The summary as at 04.06.20

Asian shares rose to a two-month high as government stimulus expectations supported investor confidence in economic recovery from the global coronavirus pandemic.

  • Oil prices fell, reversing gains in the previous session, on concerns that supply will rise if major producers are unable to agree to extend the depth of output cuts that have supported recent gains;
  • The European Central Bank is certain to give the ailing eurozone economy another shot in the arm and the only question is the timing, with arguments split between a move today and holding out until July;
  • Prosecutors on Wednesday leveled new criminal charges against four Minneapolis policemen implicated in the death of a black man pinned by his neck to the street during an arrest that sparked more than a week of nationwide protest and civil strife;
  • China said it will allow more foreign carriers to fly into the mainland, shortly after Washington barred Chinese passenger carriers from flying to the United States citing Beijing’s restrictions on American airlines;
  • Hong Kong-listed shares of HSBC and Standard Chartered rose after the banks backed China’s imposition of a national security law on the city, even as a pro-democracy and newly formed financial workers’ union criticized the move;
  • The Trump administration has selected five companies, including Moderna, AstraZeneca and Pfizer, as the most likely candidates to produce a vaccine for the novel coronavirus, the New York Times reported on Wednesday, citing senior officials;
  • LVMH CEO Bernard Arnault is exploring ways to reopen negotiations on the French luxury goods giant’s $16.2 billion acquisition of U.S. jewelry chain Tiffany & Co, as U.S. social unrest and the coronavirus pandemic weigh on the retail sector, people familiar with the matter said on Wednesday.

The summary as at 03.06.20

Asian shares rose to a near three-month high as hopes of more stimulus and further easing in social restrictions around the world outweighed caution over a host of worries from the coronavirus to growing U.S. civil unrest.

  • Oil rose, with Brent at $40 for the first time since March, as optimism mounted that major producers will extend production cuts and a recovery from the coronavirus pandemic will spur fuel demand;
  • Tens of thousands of people took to the streets of U.S. cities on Tuesday for an eighth consecutive night of protests over the death of a black man in police custody, clashing with police and looting stores in New York City;
  • A survey of U.S. businesses revealed deep fears for the future of their operations in Hong Kong if China imposes national security legislation that critics say could curb the financial centre’s freedoms and fuel ongoing protests;
  • China’s services sector returned to growth last month for the first time since January as the economy recovers from strict coronavirus-induced containment measures, although employment and overseas demand remained weak, a private survey showed;
  • Lonza aims to speed completion of two commercial production lines for Moderna’s trial COVID-19 vaccine so manufacturing could start four to six weeks earlier than planned if the project is successful, the Swiss drugmaker’s chairman said on Tuesday;
  • French luxury goods group LVMH’s $16.2 billion takeover of Tiffany & Co is looking less certain as the jeweler grapples with a deteriorating situation in the U.S. market brought on by a global pandemic and severe social unrest, fashion trade publication WWD reported on Tuesday;
  • Two of Canada’s largest telecoms firms on Tuesday teamed with Sweden’s Ericsson and Finland’s Nokia Oyj to build fifth-generation (5G) telecoms networks, ditching China’s Huawei Technologies for the project.

The summary as at 02.06.20

Asian stocks eked out gains as investors’ focus on the prospects of a global coronavirus recovery won out over familiar worries about Sino-U.S. relations and the depth of economic damage.

  • Oil prices rose, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week;
  • President Donald Trump on Monday vowed to use the U.S. military to halt protests over the death of a black man in police custody, before law enforcement officers fired rubber bullets and tear gas to clear demonstrators and allow the president to walk to a church and pose for pictures;
  • Hong Kong leader Carrie Lam accused foreign governments of “double standards” in their reaction to Beijing’s plans to impose national security laws on the city, pointing to anti-police brutality protests in the United States;
  • Nissan Motor Co has estimated the closure of its plants in Barcelona could cost up to around $1.7 billion, a union source told Reuters on Monday;
  • Lufthansa’s supervisory board has approved a $10 billion government bailout that will force the German airline to give some of its prized landing slots to rivals;
  • German automaker Volkswagen AG has closed its $2.6 billion investment in Argo AI, the Pittsburgh-based self-driving startup disclosed in a blog post;
  • Ryanair Holdings plc and Chief Executive Michael O’Leary failed to persuade a U.S. judge to dismiss a securities fraud lawsuit accusing Europe’s largest budget airline of defrauding them by downplaying its willingness to recognize labor unions.

The summary as at 01.06.20

Stock futures nudged higher early Monday morning as Wall Street looks set to kick off June trading in positive territory after consecutive monthly gains.

  • Markets closed off May on a positive note with the S&P 500 up 4.5%, the Euro Stoxx 50 up 4.2% and the NASDAQ up 6%;
  • Asian shares pushed to three-month highs as progress on opening up economies helped offset jitters over riots in U.S. cities and unease over Washington’s power struggle with Beijing;
  • Oil prices edged down as traders took profits, with the Organization of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June;
  • President Donald Trump announced Friday that the United States will cut ties with the World Health Organization. Earlier this month, Trump threatened to permanently cut off U.S. funding of the WHO. He has claimed the WHO is “China-centric” and blames the agency for advising against China travel bans early in the outbreak;
  • A tanker truck drove into a throng of protesters on a closed interstate near Minneapolis on Sunday, with the driver pulled from his rig and beaten, as major US cities imposed curfews in fear of another night of demonstrations against police brutality descending into violence;
  • Asia’s factory pain deepened in May as the slump in global trade caused by the coronavirus pandemic worsened, with export powerhouses Japan and South Korea suffering the sharpest declines in business activity in more than a decade;
  • China’s state media and the government of Hong Kong lashed out on Sunday at US President Donald Trump’s vow to end Hong Kong’s special status if Beijing imposes new national security laws on the city, which is bracing for fresh protests;
  • Lufthansa’s management board has accepted a more favourable set of demands from the European Commission in exchange for approval of a $10 billion government bailout, the carrier said on Saturday, paving the way for its rescue;
  • A consortium of three buyout funds including KKR and Cinven is looking to launch a takeover bid for Spanish telecoms company MasMovil, two sources close to the matter told Reuters;
  • Credit Suisse will not take a significant hit from its exposure to the battered oil and gas sector, Chairman Urs Rohner told Swiss state broadcaster SRF on Saturday.

The summary as at 29.05.20

Asia’s stock markets pulled back and major currencies were held in check, as investors await the U.S. response to China tightening control over the city of Hong Kong.

  • Oil prices edged lower after U.S. inventory data showed lackluster fuel demand in the world’s largest oil consumer while worsening US-China tensions weighed on global financial markets.
  • Hong Kong told the United States to keep out of the internal debate over new national security laws being imposed by China, and warned that withdrawal of the financial hub’s special status under U.S. law could backfire on the U.S. economy;
  • President Donald Trump said Thursday he would hold a news conference “on China” on Friday, but he offered no details. The announcement sent markets tumbling;
  • Japan’s factory output slid faster-than-expected and retail sales tumbled the most in more than two decades in April, as the coronavirus pandemic wrecked both foreign and domestic demand for the country’s autos and other manufactured goods;
  • The coronavirus lockdown will ease next week for most of Britain’s population, Boris Johnson announced on Thursday, as a row persisted over the prime minister’s closest adviser taking a long-distance journey during lockdown;
  • Volkswagen said it has agreed to invest 2.1 billion euros in two separate Chinese electric vehicle players, upping its bet on the world’s biggest auto market as international rivals seek to muscle in;
  • A U.S. judge on Thursday said institutional investors, including BlackRock and Allianz’s Pacific Investment Management, can pursue much of their lawsuit accusing 15 major banks of rigging prices in the $6.6 trillion-a-day foreign exchange market;
  • AstraZeneca’s top-selling drug Tagrisso has been shown to hold back a certain type of lung cancer when diagnosed at an early stage, the British drugmaker said on Thursday, potentially adding billions to its sales potential.

The summary as at 28.05.20

Asian shares rose as growing optimism about a global economic recovery from the coronavirus pandemic trumped immediate concerns about a standoff between the United States and China over Hong Kong.

  • Oil prices slid for a second consecutive session as U.S. industry data showed a steep and surprising build-up in crude stockpiles, dampening hopes of a smooth demand recovery as the world begins to ease its way out of coronavirus lockdowns;
  • U.S. Secretary of State Mike Pompeo told Congress on Wednesday that Hong Kong no longer qualifies for its special status under U.S. law, potentially dealing a crushing blow to its status as a major financial hub;
  • European governments moved on Wednesday to halt the use of anti-malaria drug hydroxychloroquine to treat COVID-19 patients, and a second global trial was suspended, further blows to hopes for a treatment promoted by U.S. President Donald Trump;
  • U.S. President Donald Trump will sign an executive order on social media companies, White House officials said after Trump threatened to shut down websites he accused of stifling conservative voices;
  • Lufthansa’s $10 billion government bailout was thrown into doubt on Wednesday after the German airline’s supervisory board refused to accept the conditions attached by Brussels;
  • Renault, Nissan Motor and Mitsubishi Motors ruled out a merger on Wednesday and doubled down on a plan to cooperate more closely on car production to save costs and salvage their troubled alliance;
  • FedEx is on the point of taking a stake in German parcel delivery firm Hermes, the Handelsblatt newspaper reported on Wednesday;
  • The authorities are planning to reopen Malta’s airport for passengers by mid-July, though half the island’s scheduled air routes have been wiped out because of the pandemic. Multiple sources said MIA is expected to be given the go-ahead to start operating commercial flights around July 15, after it was shut down on March 21 to try to slow down the spread of COVID-19.

The summary as at 27.05.20

Recent hopes for a return to normal consumer habits have pushed the Dow Jones Industrial Average and S&P 500 to briefly touch key market levels for the first time since early March; however, an escalation of U.S.-Chinese tensions has capped gains.

  • Oil prices fell on revived concerns over how quickly fuel demand will recover even as coronavirus lockdowns begin to ease in many countries, while U.S.-China tensions added to negative sentiment;
  • The U.S. Senate is taking pressure on China to a new level. A bipartisan bill doing the rounds on Tuesday would impose sanctions on Beijing officials and local banks if the country puts into place fresh curbs on Hong Kong. Tensions between the two superpowers are already high. The legislation would bump that up several notches;
  • Junior minister Douglas Ross resigned from the British government on Tuesday over the handling of accusations that Prime Minister Boris Johnson’s senior adviser had broken the coronavirus lockdown by traveling for help with childcare;
  • Japan will compile a fresh stimulus package worth $1.1 trillion that will include a sizable amount of direct spending to cushion the economic blow from the coronavirus pandemic, a draft of the budget obtained by Reuters showed;
  • Profits at China’s industrial firms fell at a slower pace in April, helped by improvements in automobiles and electronics, but the economy faces persistent pressure as activity and demand remains weak after the coronavirus outbreak;
  • Volkswagen is in final talks to seal its largest investment deals with Chinese electric vehicle firms, two sources said, as the German automaker accelerates its push into the world’s largest market for environmentally friendlier cars;
  • Merck & Co, which has largely kept to the sidelines of the race for COVID-19 treatments, said it was buying Austrian vaccine maker Themis Bioscience and would collaborate with research nonprofit IAVI to develop two separate vaccines;
  • When Renault, Nissan Motor and Mitsubishi Motors announced the last strategic plan for their Alliance in September 2017, the goal was to become the world’s biggest automaker by 2022. The Alliance partners will outline a new plan today with a less lofty objective: survival.

The summary as at 26.05.20

The Financial Times reported that HSBC executives are revisiting a list of operations in countries that are considered as non-strategic, including Malta, Bermuda, the Philippines and New Zealand with consideration of sale or even closure. It is understood that in some of these countries, efforts to sell have already been made, by potential buyers were unacceptable to local regulators.

Asian shares forged ahead while U.S. stock futures challenged a major chart barrier as investors looked past Sino-U.S. trade tensions to more stimulus in China and a re-opening world economy

  • American biotech company Novavax said Monday it started the first human study of its experimental coronavirus vaccine. The company said it expects initial results on safety and immune responses in July. Last week, another biotech Moderna reported positive development on its vaccine trial where all 45 participants had developed coronavirus antibodies;
  • Oil prices climbed, boosted by increasing faith in the market that producers will to stick to commitments to cut crude supply while demand picks up with more cars back on the road as coronavirus lockdowns are eased around the world;
  • British Prime Minister Boris Johnson’s closest aide refused to resign on Monday, saying he had done nothing wrong by driving 250 miles from London to access childcare when Britons were being told to stay at home to fight COVID-19;
  • Bank of Japan Governor Haruhiko Kuroda said the central bank may take more steps to cushion the economic impact from the coronavirus pandemic, maintaining his gloomy outlook even as a state of emergency was lifted in the capital Tokyo;
  • Russia overtook Saudi Arabia as China’s top crude oil supplier in April, customs data showed, with imports rising 18% from the same month a year earlier as refiners snapped up cheap raw materials amid a price war between the two producers;
  • Germany threw Lufthansa a 9 billion euro lifeline on Monday, agreeing a bailout which gives Berlin a veto in the event of a hostile bid for the airline;
  • U.S. drugmaker Regeneron said on Monday it would repurchase about $5 billion of its shares directly from France’s Sanofi, without altering their over-a-decade-long partnership;
  • Daimler plans to invest in Farasis Energy’s planned $480 million IPO, aiming to ensure a stable supply of batteries from the Chinese firm as it ramps up electric vehicle production, three people familiar with the matter said.

The summary as at 25.05.20

Asia markets traded mixed on Monday as investor sentiment in some markets remained resilient despite growing concerns over the U.S.-China relationship.

  • A gauge of Asian stocks pared early gains amid souring relations between China and the United States, with Hong Kong shares extending losses on mounting fears about future stability in the city;
  • The U.S. government will likely impose sanctions on China if Beijing implements national security law that would give it greater control over autonomous Hong Kong, White House National Security Advisor Robert O’Brien said Sunday;
  • French authorities reported the smallest daily rise in new coronavirus cases and deaths on Sunday since before a lockdown began on March 17, raising hopes that the worst of the epidemic is over in France;
  • British Prime Minister Boris Johnson backed his senior adviser Dominic Cummings on Sunday, despite calls from within his own Conservative Party for the aide to resign for driving 250 miles during the coronavirus lockdown;
  • Americans sunbathed on beaches, fished from boats and strolled on boardwalks this holiday weekend, but the occasional person wearing a mask was a constant reminder that the world is still battling the coronavirus pandemic;
  • Japan will lift a state of emergency for Tokyo and remaining areas still facing restrictions, while the Nikkei reported a plan for new stimulus worth almost $1 trillion to help companies ride out the coronavirus pandemic;
  • Aston Martin Chief Executive Andy Palmer is leaving the business as part of a management shake-up and will be replaced by Tobias Moers, CEO of Mercedes-AMG, a source familiar with the matter told Reuters on Sunday;
  • Lufthansa, which is in talks with the German government over a 9 billion euro bailout, will resume flights to 20 destinations from mid-June, including some holiday hot-spots, a spokeswoman said on Sunday;
  • British Finance Minister Rishi Sunak has authorised a bailout plan to rescue companies that are seen as strategically important, with the Treasury saying it may step in to support crucial businesses on a “last resort” basis after other options run out.

The summary as at 22.05.20

Hong Kong shares tumbled after Beijing moved to impose a new security law on the city after last year’s pro-democracy unrest, risking fresh protests and further straining fast-deteriorating U.S.-China ties.

  • Oil prices slumped after China’s decision to omit an economic growth target for 2020 renewed concerns that the fallout from the coronavirus pandemic will continue to depress fuel demand in the world’s second-largest oil user;
  • Britain is enduring its deepest recession in centuries but the havoc wrought by the coronavirus pandemic will not be enough to push the Bank of England to adopt negative interest rates, a Reuters poll found;
  • China dropped its annual growth target for the first time and pledged more government spending as the COVID-19 pandemic hammers the world’s second-biggest economy, setting a sombre tone to this year’s meeting of parliament in Beijing;
  • Hong Kong activists called for a protest march against Beijing’s plans to impose national security legislation in the city, prompting alarm that the new laws could erode its freedoms through “force and fear”;
  • The United States has secured almost a third of the first 1 billion doses planned for AstraZeneca’s experimental COVID-19 vaccine by pledging up to $1.2 billion, as world powers scramble for medicines to get their economies back to work;
  • Lloyds Banking Group investors rebelled against the lender’s pay policy for top bosses on Thursday, with more than a third of balloted shareholders rejecting its bonus plan;
  • Abu Dhabi’s Etihad Airways is planning to lay off 1,200 employees as it considers permanently grounding its Airbus A380s and never operating the A350s it has ordered, company and industry sources said.

The summary as at 21.05.20

Most equity markets closed the mid-week session higher across the globe, as a large portion of the world, including all 50 US states, have reopened to varying degrees. European and US credit indices, oil and most benchmark government bonds were also higher on the day.

  • Stocks in Asia Pacific region edged higher on Thursday as investors continue to monitor the reopening of economies amid the coronavirus pandemic. Meanwhile US futures were pointing to a lower open this morning as Wall Street was set to take a breather from robust gains so far this week.
  • The Nasdaq Composite and S&P 500 both extended week-to-date gains during Wednesday’s session and finished the day up 2% and 1.6% respectively. The S&P 500 closed the day at its highest level since March 6 while the Nasdaq is now 4.5% below its Feb. 19 record close.
  • Popular consumer internet names including Facebook and Amazon both clinched new all-time highs on Wednesday as investors cheered the former’s new e-commerce venture and the latter’s continued success in delivering goods to Americans during the Covid-19 outbreak.
  • The minutes from the meeting of the Federal Open Market Committee (FOMC) held on 28 and 29 April were released on Wednesday. The minutes revealed that policymakers are continuing to assess the impact of policy steps and are prepared to adjust those plans, including elements of its various emergency lending programs, in response to evolving financial conditions.
  • The US Senate passed a bill that aims at barring some Chinese companies from being listed in the US. What makes this even more relevant is the unanimous consent across the Senate with both Republicans and Democrats agreeing on the measure. That probably avoided any negative reaction in the equity markets as this definitely doesn’t sound like a “personal” action of Donald Trump.
  • The number of newly reported coronavirus worldwide hit a daily record this week with more than 100,000 new cases between Tuesday and Wednesday, according to the World Health Organization. The majority of new confirmed cases are coming from the Americas, followed by Europe.
  • Terms of a planned merger between Fiat Chrysler and Peugeot-owner PSA are set in stone, according to FCA’s chairman, John Elkann, brushing off talk that some aspects of the deal might be re-negotiated because of the Covid-19 crisis.
  • Emirates is in talks to reduce remaining deliveries of Airbus’s A380s due to the pandemic. Halting Emirates deliveries could be painful for both sides, with the airline foregoing deposits and Airbus left with parts already ordered and no significant market to dispose of them.
  • The German government has agreed on final details of a rescue package for airline carrier Lufthansa, according to media reports. The government is said to have agreed to a three-stage model involving a total of 9 billion euros. In addition, the government will take a direct stake of 20% in Lufthansa and a convertible bond worth 5% plus one share, with the government gaining two seats on the company’s supervisory board.

The summary as at 20.05.20

The markets are trading on vaccine news and whispers as Tuesday’s good performance got impacted by speculation on the effectiveness of Moderna’s vaccine which boosted market sentiment on Monday.

  • Asian stocks struggled to extend the week’s rally and gold and bonds firmed as a skeptical press report dented some hopes for a COVID-19 vaccine and concerns about bumps in the global recovery from the pandemic returned;
  • According to an article published yesterday by health and medicine periodical STAT news, some vaccine experts say Moderna didn’t share enough critical data to properly assess their COVID-19 vaccine in Phase I trials. Some experts suggest that the early readout should be taken lightly;
  • Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell were front-and-center Tuesday at the first Senate hearing on how the $2.2 trillion coronavirus rescue package is being implemented;
  • Oil prices rose amid signs of improving demand and a drawdown in U.S. crude inventories but worries over the economic fallout from the coronavirus pandemic capped gains;
  • U.S. Treasury Secretary Steven Mnuchin on Tuesday defended the Trump administration’s fiscal response to the coronavirus pandemic and told senators he was willing to consider extending and modifying a payroll loan program for small businesses;
  • China held its benchmark lending rate steady, though analysts believe the widely expected decision signals just a brief pause in the central bank’s efforts to support an economy ravaged by the coronavirus pandemic;
  • The World Health Organization’s head said on Tuesday he would keep leading the global fight against the coronavirus pandemic, after U.S. President Donald Trump threatened to cut off funding and quit the body;
  • Chinese hackers are suspected of accessing email and travel details of about nine million easyJet customers, said two sources familiar with the investigation into a cyberattack disclosed by the British airline on Tuesday;
  • HSBC expects to achieve double-digit asset growth in its newly combined wealth business in Asia Pacific in the next three years, as it looks to grab a bigger share of the growing rich population, the unit’s regional head told Reuters;
  • Volkswagen AG has agreed to pay 9 million euros in a deal with a German court to end legal proceedings against its chairman and chief executive, who were accused of holding back market-moving information on rigged emissions tests.

The summary as at 19.05.20

The week started in the best way possible with a risk on mood backed by Moderna Inc. which seems to have passed the phase 1 and it’s expected to start phase 2 shortly of its Covid-19 vaccine. As a result, US equity markets were up by more than 3% with Oil above $32.

  • Asian shares jumped on optimism that the global economy would recover quickly following a successful early-stage trial of a coronavirus vaccine, while the euro hovered near a two-week top;
  • Moderna announced Monday “positive” phase one results for a potential coronavirus vaccine. The company said that after two doses, all 45 trial participants had developed coronavirus antibodies;
  • Chinese President Xi Jinping also said Monday that his country will provide $2 billion over two years to help other countries combat the impact of the coronavirus pandemic;
  • Oil prices rose amid signs that producers are cutting output as promised just as demand picks up on a resumption of economic activity;
  • Money markets ramped up expectations that the United Kingdom could cut interest rates below zero for the first time as policymakers debated further steps to support the struggling economy;
  • The phased reopening of U.S. business and social life gained traction on Monday with more Americans emerging from coronavirus lockdowns and financial markets boosted by promising early results from the first U.S. vaccine trial in humans;
  • U.S. President Donald Trump threatened on Monday to permanently halt funding for the World Health Organization if it did not commit to improvements within 30 days, and to reconsider the membership of the United States in the body;
  • UK unemployment rose by 50,000 to 1.35 million in the three months to March, as the effects of the coronavirus lockdown started to hit the economy. The unemployment rate was estimated at 3.9%, slightly up on the previous quarter, the Office for National Statistics said. Before the lockdown began, employment had hit a record high;
  • Total has called off a plan to acquire Occidental Petroleum’s assets in Ghana, which was conditional on the completion of the acquisition of Occidental’s other assets in Algeria, the French energy company said on Monday;
  • Thyssenkrupp on Monday said it was looking for partners for its steel and warship divisions, singling out just three lines of businesses that will stay within the struggling German industrial icon;
  • AstraZeneca said it was in talks with governments around the world to strike coronovirus vaccine production deals similar to one it agreed with Britain over the weekend.

The summary as at 18.05.20

Markets are expected to open higher this morning after the Federal Reserve Chairman struck a cautiously optimistic tone, saying that he’s “highly confident” the U.S. economy will claw its way back from the current pullback, but warned that it may not fully recover until a Covid-19 vaccine is complete.

  • Asian shares were led higher by S&P 500 futures as countries’ efforts to re-open their economies stirred hopes the world was nearer to emerging from recession;
  • Oil prices climbed, supported by ongoing output cuts and signs of gradual recovery in fuel demand as more countries ease curbs imposed to stop the coronavirus pandemic spreading;
  • Summer weather is enticing much of the world to emerge from coronavirus lockdowns as centers of the outbreak from New York to Italy and Spain gradually lift restrictions that have kept millions indoors for months;
  • Japan’s economy slipped into recession for the first time in 4-1/2 years, putting the nation on course for its deepest postwar slump as the coronavirus crisis ravages businesses and consumers;
  • Federal Reserve chair Jay Powell has warned that a full US economic recovery may take until the end of next year and require the development of a Covid-19 vaccine;
  • SoftBank Group said that Alibaba co-founder Jack Ma will resign from its board, in the latest departure by a high-profile ally of CEO Masayoshi Son;
  • Thyssenkrupp is in talks with international peers about consolidating its loss-making steel business, a person familiar with the matter said;
  • Italian Prime Minister Giuseppe Conte said on Saturday that Fiat Chrysler was entitled to apply for Italy’s state-backed loans because the automaker employs thousands of people in the country, even though its legal base is located abroad;
  • Tesco has found abuses against migrant workers at its stores and distribution centers in Malaysia and Thailand, it said in its annual modern slavery statement;
  • Ryanair on Monday reported a profit after tax of 1 billion euros for the year to March 31, but said it was unable to provide a forecast for the current year due to COVID-19 and cut its annual passenger traffic target by a further 20%.

The summary as at 15.05.20

U.S. stock futures were largely flat on Thursday night following a sharp rally during the regular session as investors awaited several key data sets. Despite those gains, however, Wall Street was headed for its biggest weekly decline since late March. The Dow and S&P 500 both ended Thursday’s session down more than 2% for the week. The Nasdaq had lost nearly 2% week to date.

  • Asian stocks struggled to extend gains and were on course to end the week lower as deteriorating U.S.-China relations undercut optimism over the reopening of major economies;
  • Oil prices rose, extending day-earlier gains, as data showed demand for crude picking up in China after the easing of curbs to stem the coronavirus outbreak, boosting hopes that the global supply overhang may start to fade;
  • U.S. President Donald Trump signaled a further deterioration of his relationship with China over the novel coronavirus, saying he has no interest in speaking to President Xi Jinping right now and going so far as to suggest he could even cut ties with the world’s second largest economy;
  • China’s industrial output rose 3.9% in April from a year earlier, data showed, expanding for the first time this year as the world’s second-largest economy slowly emerged from its coronavirus lockdown;
  • British manufacturers think it will take longer to recover from the economic impact of COVID-19 than just a couple of weeks ago, according to an industry survey;
  • France said on Thursday that the world’s nations would have equal access to any novel coronavirus vaccine developed by pharmaceuticals giant Sanofi, a day after the CEO suggested that Americans would likely be the first in line;
  • IKEA’s shopping malls business, one of the world’s biggest, is looking to enter the United States in the next couple of years and is in talks to snap up central properties in major cities, its boss told Reuters;
  • Lufthansa plans to resume flights to destinations including Los Angeles, Toronto and Mumbai next month as it begins to restore some of the capacity grounded by the coronavirus crisis, the German airline group said on Thursday.

The summary as at 14.05.20

European stocks are expected to open lower Thursday with investors pausing to digest an economic warning from the U.S. Federal Reserve’s Chairman. In effect, Powell indicated that more government spending will likely be required to sustain US business long enough to weather Covid-19 disruptions and enable the recovery in employment. The somber tone on the day drove benchmark government bonds modestly higher across the globe, while European/US investment grade and high yield credit indices closed lower on the day.

  • Asia’s stock markets fell as worries about a second wave of coronavirus infections and a dour assessment of the way back from the head of the U.S. Federal Reserve dashed hopes for a quick recovery;
  • Oil prices were lifted by an unexpected drop in U.S. crude stocks, but gains were capped by both a bleak outlook for the world’s no. 1 economy as the coronavirus pandemic crushes fuel demand and concern over a potential second wave of cases;
  • Federal Reserve Chair Jerome Powell had a clear message to interest rate futures traders on Wednesday: Bets that the U.S. central bank will pursue a negative interest-rate policy are off-base;
  • The United Kingdom is planning to cut tariffs on U.S. agricultural imports to advance progress on a free trade agreement, the Financial Times reported;
  • Japan was expected to lift a state of emergency across a large part of the country, but the capital Tokyo will remain under restrictions until there is a convincing containment of the coronavirus;
  • Airbus is exploring restructuring plans involving the possibility of “deep” job cuts as it braces for a prolonged coronavirus crisis after furloughing thousands of workers, industry sources said, though no decision is imminent;
  • Roche said on Wednesday it was in talks with the UK government to roll out its coronavirus antibody test kits in the country after Public Health England found them reliable;
  • Thyssenkrupp is exploring several strategic options for its warship unit, ranging from combining it with Italy’s Fincantieri to creating a national champion with German peers, a person familiar with the matter said;
  • In Europe Thursday, investors will be keeping an eye on earnings from Bilfinger, Deutsche Telekom, Merck, RWE and Zurich Insurance. On the data front, France releases first-quarter unemployment numbers.

The summary as at 13.05.20

European stocks are expected to open lower today as investors become increasingly concerned over a second wave of coronavirus cases. Public health experts — including those at the World Health Organization — have for weeks warned authorities against lifting containment measures too early, which could cause a rebound in new coronavirus cases.

  • Asian stocks were broadly lower as fears about a second wave of coronavirus infections gripped financial markets;
  • Oil prices fell on worries about a possible second wave of coronavirus cases in countries starting to ease lockdowns, while industry data showed a rise in U.S. crude inventories;
  • Britain extended its job retention scheme – the centre-piece of its attempts to cushion the coronavirus hit to the economy – by four months on Tuesday but told employers they would have to help meet its huge cost from August;
  • The Trump administration is pressing an independent board charged with overseeing billions in federal retirement dollars to freeze plans to invest in Chinese companies that Washington suspects of abusing human rights or threatening U.S. security;
  • Democrats in the U.S. House of Representatives on Tuesday unveiled a $3 trillion-plus coronavirus relief package with funding for states, businesses, food support and families, only to see the measure flatly rejected by Senate Republicans;
  • China’s consumer price index (CPI) recorded 3.3% year on year in April, down 1 percentage point from the previous month. Producer price index (PPI) deflated by 3.1% y/y in April;
  • The European Union executive will recommend that border restrictions be gradually lifted and travel stalled by the coronavirus pandemic allowed to restart in order to revive tourism, a major industry across the 27-country bloc;
  • Tesla resumed operations at its production plant in Fremont, California, on 11 May, despite an order restricting manufacturing in the county where the facility is located.
  • Alstom is sticking to the terms of its previously agreed deal to buy the rail division of Canada’s Bombardier for up to 6.2 billion euros, despite a hit to its earnings from the coronavirus crisis;
  • French insurer Covea has walked away from its planned $9 billion purchase of PartnerRe, the Bermuda-based reinsurer owned by Exor, the holding firm of Italy’s Agnelli family, saying it could no longer buy under the terms of their agreement.

The summary as at 12.05.20

European stocks are expected to open lower Tuesday as investors become increasingly concerned over a second wave of corona-virus cases. Public health experts — including those at the World Health Organization — have for weeks warned authorities against lifting containment measures too early, which could cause a rebound in new corona-virus cases.

  • Asian shares skidded on growing worries about a second wave of coronavirus infections after the Chinese city where the pandemic originated reported its first new cases since its lockdown was lifted;
  • Oil futures rose, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain the glut in the global market that has grown as the coronavirus pandemic crushed fuel demand;
  • Prime Minister Boris Johnson set out a cautious plan on Monday to get Britain back to work, including advice on wearing home-made face coverings, though his attempt to lift the coronavirus lockdown prompted confusion and even satire;
  • U.S. President Donald Trump said on Monday he opposed renegotiating the U.S.-China “Phase 1” trade deal after a Chinese state-run newspaper reported some government advisers in Beijing were urging fresh talks and possibly invalidating the agreement;
  • China’s factory prices fell at the sharpest rate in four years in April, highlighting weakening industrial demand in the world’s second-largest economy as the coronavirus pandemic slams global growth;
  • EU airlines and travel companies should offer vouchers for flights and holidays cancelled due to the coronavirus that are valid for at least 12 months, the European Commission says in recommendations to help revive travel and tourism in Europe;
  • Logitech International reported a 13.6% rise in fourth-quarter sales as more people used its products while working from home due to the coronavirus crisis;
  • U.S. private equity house KKR said on Monday it had acquired a stake of 5.2% in ProSiebenSat.1 Media, becoming the third investor to amass a sizable shareholding in the struggling German broadcaster.

The summary as at 11.05.20

The perception that the worst is over helped markets to edge higher on Friday despite an (expected) very bad print in Jobless claims being the biggest monthly loss in more than 70 years. The perception is that market participants consider those numbers already as part of the past as news on reopening combined with new trade talks between Chinese and US authorities pushed away the negativism.

  • Global stock indexes mostly rose on Monday, as investors continued to focus on the potential for a recovery in business activity in the months ahead, and to look beyond recent grim economic data.
  • US stocks continued to rally last Friday despite data showing that unemployment had climbed to a record high of 14.7% in April. For the week, the S&P 500 gained 3.5%, while the Dow Jones Industrial Average rose 2.6% and the Nasdaq Composite added 6%. All three indexes have rallied more than 30% from their March 23 lows.
  • The British government said non-essential retailers would not go back to work until June at the earliest while other sectors will not go back to work until July at the earliest.
  • South Korea warned of a second wave of the new corona-virus as infections rebounded to a one-month high, while new infections accelerated in Germany.
  • Federal Reverse Chairman Jerome Powell is due to give a keynote speech on Wednesday and analysts suspect he will rule out taking rates negative, at least for now.

The summary as at 08.05.20

Stocks in Asia traded higher Friday ahead of the release of the U.S. jobs report for April, expected later in the day. Also, top US officials said their trade pact with China remained on track despite rising tensions, easing fears that the corona-virus pandemic had upended the two countries’ fragile economic truce.

  • Asian shares rose as investors focused on talks between U.S. and Chinese trade officials and solid corporate earnings rather than the looming release of data expected to show the worst U.S. unemployment rate in more than 70 years;
  • The Nasdaq Composite turned positive for the year on Thursday bouncing back from a drop of more than 20% in late March. Investors have continued to prize the big tech companies that drove much of the recent decade-long bull market and which make up a heavy share of the Nasdaq. As a comparison, the S&P is still down 11% for the year while the Dow Jones Industrial Average has dropped 16% so far this year;
  • Oil prices rose as more countries began easing lockdowns set in place to stop the corona-virus spreading, giving hope that demand for fuels will pick up after the economic devastation caused by the pandemic;
  • Top U.S. and Chinese trade representatives discussed their Phase 1 trade deal with China saying they agreed to improve the atmosphere for its implementation and the United States saying both sides expected obligations to be met;
  • Japan’s household spending plunged in March and service-sector activity shrank at a record pace in April, reinforcing expectations that the coronavirus pandemic is tipping the world’s third-largest economy into deep recession;
  • China finalised rules on Thursday that would scrap quotas under two major inbound investment schemes, giving qualified foreign institutions unlimited access to Chinese stocks and bonds in the latest step to open the country’s financial industry;
  • HSBC has alleged that Singapore-based Zenrock Commodities Trading engaged in a series of “highly dishonest transactions” which included using the same oil cargo to obtain loans from at least two different lenders, according to a court document seen by Reuters;
  • France’s Safran, the world’s third-largest aerospace supplier, said on Thursday it had laid off 3,000 employees in Mexico as the aerospace industry faces an unprecedented crisis stemming from the corona-virus pandemic;
  • Lufthansa is negotiating a 9 billion euro bailout with Germany’s economic stabilisation fund to ensure its future, the airline said on Thursday, confirming an earlier Reuters report.

The summary as at 07.05.20

Global equity markets closed the mid-week session mixed on increasing tensions between the US and China, while benchmark government bonds sold off and the US dollar strengthened for the fourth consecutive day. Crude oil also broke its five-day streak of price increases, albeit remaining more than double its $11.57 closing price on 21 April.

  • The S&P 500 and Dow Jones Industrial Average edged lower Wednesday, while the Nasdaq Composite rose, as investors tried to untangle data and corporate earnings to determine what the economy might look like in the months ahead.
  • China’s exports unexpectedly rose in April for the first time this year. Overseas shipments in April rose 3.5% from a year earlier which compares with a 15.7% drop tipped by a Reuters poll of economists and a 6.6% plunge in March. Imports sank 14.2% from a year earlier, the biggest contraction since January 2016 and below market expectations of an 11.2% drop.
  • US private employers laid off a record 20.236 million workers in April. The staggering numbers were widely anticipated, since 30.3 million people had filed claims for unemployment benefits since March 21, equivalent to nearly one out of every five workers losing their job in just over a month.
  • The ADP report was published ahead of the government’s more comprehensive employment report for April scheduled for release on Friday. According to a Reuters survey of economists, nonfarm payrolls are forecast to have tumbled by a historic 21.853 million in April while the unemployment rate is seen jumping to 16%.
  • President Trump has sharply criticized China for its handling of the outbreak. He has said he is considering using tariffs and other ways to collect compensation for it from Beijing. However, senior officials signaled this week that the administration is holding off on punishing China economically.
  • In the Eurozone, the headline Composite PMI – a gauge of output across the combined manufacturing and services sectors – plunged from a prior all-time low of 29.7 in March to 13.6 in April. With the previous low having been 36.2, hit in February 2009, the current downturn is clearly of far greater ferocity than seen even at the height of the global financial crisis.
  • The BMW Group has revealed that its first-quarter net profit declined by only 2.4% year on year to €574 million despite the emergence of the global COVID-19 virus pandemic, which most severely affected the firm’s Chinese operations during the period in question. However, the y/y comparison was skewed by the fact that the company’s first-quarter 2019 results were badly hit by the recognition of a provision for approximately €1.4 billion. If that had not been included, then the first-quarter 2020 net profit would have been around 30% down on the figure posted in the same period last year.
  • General Motors’s quarterly profits declined 87% to $294 million vs $2.1 billion Q1 2019, but US truck sales strengthened, and the automaker is resuming production when US and Canadian plants reopen this month. Sales at GM declined 6% overall to $32.7 billion in the first quarter, the company said today, while sales in the US declined 7%.

The summary as at 06.05.20

Stocks rose on Tuesday as investors bet the U.S. economy could start to reopen again while oil prices jumped for a fifth straight day. Traders are weighing the reopening of the global economies along with brewing tensions between China and the US. The next 2-4 weeks are critical for both the economic crisis and the health crisis.

  • Shares struggled and the yen gained, with markets in China faltering on their return from a long holiday as investors fretted over Sino-U.S. tensions;
  • Oil prices reversed course to edge lower as a higher than expected rise in U.S. inventories refocused investors on the risk of oversupply amid a coronavirus-driven slump in fuel demand.
  • The United States and Britain launched formal negotiations on a free trade agreement on Tuesday, vowing to work quickly to seal a deal that could counter the massive drag of the coronavirus pandemic on trade flows and the two allies’ economies;
  • U.S. President Donald Trump on Tuesday urged China to be transparent about the origins of the novel coronavirus outbreak that has killed more than a quarter of a million people since it started in the Chinese city of Wuhan late last year;
  • Germany’s constitutional court ruled that ECB must demonstrate asset purchases are proportionate. If such proportionality is not demonstrated, then the Bundesbank would no longer be allowed to participate in the purchases under the PSPP. The Euro weakened following this news;
  • Walt Disney will kick off its strategy next week to begin restoring its lucrative parks business that has suffered $1 billion in lost profits from the coronavirus-led shutdown;
  • Norwegian Air will sell new shares at a 79% discount to the latest traded price on the Oslo Bourse, the budget carrier said on Tuesday as it seeks to boost its equity in order to qualify for Norway’s government aid package;
  • Fiat Chrysler Automobiles plunged to a first-quarter loss of $1.8 billion and warned of a “significant” loss this quarter, even as it prepares to reopen its most profitable North American truck plants on May 18 as coronavirus lockdowns ease;
  • Lufthansa shareholders on Tuesday agreed to not distribute 298 million euros in retained profits as a dividend for 2019, as the airline enters the final stretch of negotiations for a 10 billion euro bailout.

The summary as at 05.05.20

Most of the equity markets that were closed on Friday caught up on the losses they averted that day, while most of those that had been open and took losses then were modestly higher or close to unchanged today. On a positive note, Crude oil prices continued to march higher and are now more than double the April 28 intraday lows.

  • Asian stocks rose, tracking a late Wall Street rally as governments eased coronavirus lockdowns while oil extended gains on expectations fuel demand would begin to pick up;
  • On Monday, airline stocks suffered a big sell-off with Delta, United, American Airlines all dropping more than 5%. The decline came after Warren Buffett’s said over the weekend that his Berkshire Hathaway dumped the entirety of its stakes in the sector due to the fallout from the pandemic;
  • Tensions between China and the U.S. appeared to have flared up again. Secretary of State Mike Pompeo on Sunday said there was “a significant amount of evidence” of the coronavirus originating in a Wuhan lab. President Donald Trump previously said he was considering imposing tariffs on China for its handling of the outbreak;
  • US oil prices rose for a fifth straight day as concerns over global storage capacity eased ahead of weekly industry data. The rise for US crude came despite a decision by the Texas Railroad Commission, the state’s oil and gas regulator, to drop an effort to force producers to cut output after running into opposition from energy companies;
  • Luxury sports car maker Ferrari still expects to make more than $1 billion in core profit this year, providing a relative beacon of stability in an auto industry ravaged by the coronavirus crisis;
  • Around a quarter of employees in Britain have been furloughed and companies have claimed 8 billion pounds from the government to sustain their wage bills during the coronavirus lockdown, tax authorities said on Monday;
  • German chipmaker Infineon Technologies on Monday said that it expects sales to decrease by 5% in the fiscal year to September 30 because of the impacts of the coronavirus pandemic, compared to an original target of a 5% increase;
  • Walt Disney and Coca Cola report results today.

The summary as at 04.05.20

Markets are lower this morning as traders weighed the reopening of the global economies along with brewing tensions between China and the US. The next 2-4 weeks are critical for both the economic crisis and the health crisis.

  • The dollar inched higher and stock markets struggled for traction as a U.S.-China spat over the origin of the coronavirus put the brakes on optimism about an economic re-start as countries around the world ease restrictions;
  • Gilead Sciences’ coronavirus fighting drug will be in the hands of doctors and patients as early as this week, the biotechnology company’s CEO said Sunday;
  • Oil prices fell in early trade, paring last week’s gains, on worries the global oil glut may persist as U.S.-China trade tension could hold back an economic recovery even as coronavirus pandemic lockdowns start to ease;
  • U.S. President Donald Trump said on Sunday he now believes as many as 100,000 Americans could die in the coronavirus pandemic, after the death toll passed his earlier estimates, but said he was confident a vaccine would be developed by the year’s end;
  • Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory, but did not dispute U.S. intelligence agencies’ conclusion that it was not man-made;
  • The British government had a contingency plan for Prime Minister Boris Johnson’s death as he battled COVID-19 in intensive care last month, he said in an interview with The Sun newspaper;
  • Norwegian Air said on Sunday it had secured support from enough bondholders for a $1.2 billion debt-for-equity swap, a vital step in helping it survive the coronavirus crisis;
  • Roche has won emergency approval from the U.S. Food and Drug Administration for an antibody test to determine whether people have ever been infected with the coronavirus, the Swiss drugmaker said on Sunday;
  • Lufthansa is hopeful its bailout talks with the German government can be concluded soon, the airline’s board told staff in a letter seen by Reuters, adding that it is also considering alternatives such as creditor protection.

The summary as at 30.04.20

Major equity markets closed higher on Wednesday, with a particularly strong close in the US. This was driven by the combination of positive initial results for Gilead’s Remdesivir COVID-19 trial, paired with the FOMC meeting delivering the supportive message that most were expecting.

US GDP came in weaker than the consensus, but the markets have recently appeared to view more dire earnings/economic reports as potentially triggering expansions of government stimulus programs. All eyes will today be on the ECB meeting and the weekly US initial claims for unemployment insurance report.

  • Asian stocks rose to a fresh seven-week high, lifted by encouraging early results from a COVID-19 treatment trial, though bonds and currencies held cautious ranges ahead of a European Central Bank meeting later in the day;
  • Oil prices jumped, extending steep gains in the previous session on signs the U.S. crude glut is not growing as quickly as expected and that gasoline demand battered by COVID-19 restrictions is starting to pick up;
  • The top U.S. infectious disease official said Gilead’s experimental antiviral drug remdesivir will become the standard of care for COVID-19 after early clinical trial results on Wednesday showed it helped patients recover more quickly from the illness caused by the coronavirus;
  • Millions more Americans likely filed claims for unemployment benefits last week, but the tide appears to be slowing, offering cautious hope of a peak in job losses from business closures and disruptions because of the novel coronavirus;
  • China’s factories suffered a collapse in export orders in April, twin surveys showed, suggesting a full-blown recovery appeared some way off as the coronavirus health crisis shut down large parts of the world economy;
  • The British car industry faces losing output worth more than 8 billion pounds due to the coronavirus outbreak, which cut production in March by a third, falling to its lowest level since 2009, an industry body said;
  • GlaxoSmithKline beat quarterly profit expectations on rising sales of its blockbuster shingles vaccine and strong demand for pain and respiratory medicines during the coronavirus pandemic;
  • France’s Safran reported an 8.8% drop in like-for-like first-quarter revenue to 5.38 billion euros as the coronavirus crisis began to weigh on its aircraft engines and interiors business;
  • Apple, Amazon, Visa and Gilead Sciences are amongst the companies reporting results today

The summary as at 29.04.20

All eyes will be on the Fed’s monetary policy decision at 2 p.m. ET Wednesday. Investors will look to the central bank’s statement and chairman Jerome Powell’s virtual press conference for clues about how long interest rates will stay near zero as the economy seeks to emerge from coronarivirus crisis.

  • Asian shares rose for a third session on the trot on Wednesday as investors took heart from easing coronavirus lockdowns in some parts of the world while oil prices jumped on hopes demand will pick up;
  • Positive news around potential treatments for the infection as well as progress in developing a vaccine have also boosted sentiment recently. Moreover, investors have regained some confidence as parts of the United States, Europe and Australia are gradually easing restrictions while New Zealand this week allowed some businesses to open;
  • Risk assets including equities have rallied for most of this month thanks to heavy doses of fiscal and monetary policy stimulus around the globe aimed at softening the economic blow from the COVID-19 pandemic;
  • U.S. oil prices jumped trimming some of this week’s losses, after U.S. stockpiles rose less than expected and on expectations demand will increase as some European countries and U.S. cities moved to ease coronavirus lockdowns;
  • The U.S. economy likely contracted in the first quarter at its sharpest pace since the Great Recession as stringent measures to slow the spread of the novel coronavirus almost shut down the country, ending the longest expansion in the nation’s history;
  • Ford Motor said on Tuesday its second-quarter loss would more than double to over $5 billion from $2 billion in the first quarter due to the impact of the coronavirus pandemic, but added it had enough money despite the crisis to last the rest of 2020;
  • Samsung said it expected profit to decline in the current quarter due to a coronavirus-related slump in sales of smartphones and TVs, although the chip business would remain solid;
  • Standard Chartered said its first-quarter profit tumbled 12%, as the emerging markets-focused bank boosted provisions against bad loans as the coronavirus crisis hammers its borrowers;
  • Lufthansa might seek some form of protection from creditors while talking to the Berlin government about a 9 billion euro rescue package, a company source said on Tuesday after government and airline sources said talks on a deal were continuing;
  • Carrefour said on Tuesday that revenue growth accelerated in the first quarter, reflecting strong food sales in March in all its markets and notably in the core French market as people stayed at home due to coronavirus lockdowns;
  • Alphabet shares rose as much as 7% in extended trading on Tuesday after the company reported earnings for the first quarter and sounded a cautiously optimistic note that a steep drop-off in ad revenues in March was starting to moderate.

The summary as at 28.04.20

  • Asian shares and U.S. stock futures dipped into the red, erasing earlier gains as a renewed decline in oil prices overshadowed optimism about the easing of coronavirus-related restrictions seen globally;
  • Oil prices slumped, extending the previous session’s slide, on worries about limited capacity to store crude worldwide and expectations that fuel demand may only recover slowly as coronavirus pandemic restrictions are gradually eased;
  • U.S. President Donald Trump said on Monday that China could have stopped the coronavirus before it swept the globe and said his administration was conducting “serious investigations” into what happened;
  • Japan’s March jobless rate rose to its highest in a year, while job availability slipped to a more than three-year low, official data showed, as the coronavirus outbreak and containment measures caused the nation’s job market to ease;
  • General Motors, Ford Motor and Fiat Chrysler Automobiles are targeting May 18 to resume some production at their U.S. factories after shutting down plants in March due to the coronavirus outbreak, the Wall Street Journal reported;
  • HSBC’s first-quarter profit nearly halved from a year-ago, missing estimates, after boosting provisions against bad loans as the coronavirus pandemic hits borrowers worldwide;
  • BP Plc said on Monday it had amended financial terms of the $5.6 billion sale of its Alaska business to privately held Hilcorp Energy following the recent slump in oil prices, which may lead to a lower cash boost than initially planned;
  • German car making giant Volkswagen resumed production at its biggest factory on Monday as part of a broader industry drive to get back to work in Europe, where the coronavirus pandemic has hammered demand and pushed up inventory levels;
  • Alphabet to report results today.

The summary as at 27.04.20

The week ahead is busy for markets, with earnings from no less than 140 S&P 500 companies, including Amazon, Microsoft, Apple and Boeing. The Federal Reserve meets Tuesday and Wednesday, and it is expected to sound reassuring as it discusses the programs it has already rolled out to help the markets and the economy.

  • Asian shares bounced as the Bank of Japan (BOJ) announced more stimulus steps to help cushion the economic impact of the coronavirus, while oil took another spill as the world ran short of space to store it all;
  • Oil prices fell on signs that worldwide oil storage is filling rapidly, raising concerns that production cuts will not be fast enough to catch up with the collapse in demand from the coronavirus pandemic;
  • Another wave of states prepared to ease coronavirus restrictions on U.S. commerce this week, despite health experts warning there is still too little diagnostic testing, while the White House forecast a staggering jump in the nation’s monthly jobless rate;
  • The Bank of Japan ramped up risky asset purchases and pledged to buy unlimited amounts of government bonds to combat the economic fallout from the coronavirus epidemic;
  • Profits at China’s industrial firms fell in March although at a slower pace than in the first two months, with many sectors seeing significant declines, suggesting the economy is still struggling to resume production after the coronavirus outbreak;
  • European planemaker Airbus issued a bleak assessment of the impact of the coronavirus crisis, telling the company’s 135,000 employees to brace for potentially deeper job cuts and warning its survival is at stake without immediate action;
  • Deutsche Bank announced first-quarter results it said were above market expectations late on Sunday, but warned it might temporarily miss its capital requirement target as it extends more credit due to the impact of the COVID-19 pandemic;
  • Volkswagen will restart production at its Wolfsburg factory in Germany, the latest of a fleet of European carmakers to take advantage of eased coronavirus lockdown rules to resume manufacturing.

The summary as at 24.04.20

European Union leaders agreed on Thursday to build a trillion-euro emergency fund to help recover from the coronavirus pandemic. Meanwhile, US equities had a rollercoaster day with two main news as the highlight: first, the headlines on Gilead drug against coronavirus which apparently failed its first trial and a jobless claim that despite being lower than the last one implies a total of claims since the beginning of the pandemic above 26 million.

  • Oil prices jumped again, gaining more ground as producers like Kuwait said they would move to cut output and as the United States approved another package to cope with the economic disruption caused by the coronavirus outbreak;
  • The U.S. House of Representatives overwhelmingly approved a $484 billion coronavirus relief bill on Thursday, funding small businesses and hospitals and pushing the total spending response to the crisis to an unprecedented near $3 trillion;
  • European leaders agreed to set up a massive recovery fund, closely tied to the bloc’s seven-year budget. They also confirmed that €540 billion of financial support would be released through existing mechanisms starting 1 June. European Commission chief Ursula von der Leyen said the fund would mobilize €1 trillion of investment;
  • A closely-watched Gilead Sciences experimental antiviral drug failed to help patients with severe COVID-19 in a clinical trial conducted in China, but the drug maker said the findings were inconclusive because the study was terminated early;
  • Japan’s core consumer inflation eased in March for the second straight month, underscoring fears that slumping oil costs and soft consumption because of the coronavirus pandemic might push the country back into deflation;
  • Lufthansa aims to finalise a state aid rescue package worth up to 10 billion euros next week after the coronavirus crisis forced it to ground almost all of its planes, people close to the matter said;
  • Telecom Italia and Vodafone have completed the sale of an 8.6% combined stake in Italy’s biggest mobile towers company INWIT as part of efforts to cut debt, the companies said;
  • German diagnostics and medical imaging firm Siemens Healthineers will launch an antibody test to identify past coronavirus infections, competing with rivals Roche and Abbott.

The summary as at 23.04.20

Global sentiment improved markedly on Wednesday after the prior two days of selling and the coinciding uptick in volatility. Crude oil prices rallied significantly versus Tuesday’s close, but is still only a bit more than 50% of where they had begun the week. Credit closed higher across both Europe and the US, while benchmark government bonds closed lower on the day. On a positive note, each day appear to bring more announcements of factories returning to some level of production in certain regions.

  • A recent set of better than feared corporate earnings results from companies including Kimberly-Clark (KMB), Texas Instruments (TXN) and Netflix (NFLX), along with hopes for a quick passage of further fiscal stimulus from the US Congress and incrementally more positive data on the domestic coronavirus outbreak, sent stocks higher during the regular session Wednesday. The S&P 500 rose more than 2% by market close, snapping a two-day losing streak;
  • Asian stock markets rose as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy, helped calm nervous markets;
  • Brent continued its recovery with the international oil marker adding 8.2 per cent to $22.04. A day earlier Brent fell below $20 for the first time since 1999. West Texas Intermediate rose 9.5 per cent to $15.09 a barrel. Those gains came after US President Donald Trump on Wednesday ordered American warships to destroy any Iranian vessels that posed a threat. Mr Trump had declared in a tweet that he had “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea”;
  • President Donald Trump on Wednesday ordered a temporary block on some foreigners from permanent residence in the United States, saying he wanted to protect American workers and jobs during the coronavirus pandemic;
  • A record 26 million Americans likely sought unemployment benefits over the last five weeks, confirming that all the jobs created during the longest employment boom in U.S. history were wiped out in about a month as the novel coronavirus savages the economy;
  • The coronavirus pandemic battered Asian economies in April with social-distancing policies and business closures taking a particularly heavy toll on the region’s service sector firms, surveys showed;
  • Daimler AG said it expected to report a near 70% plunge in a key first-quarter earnings figure and 2020 industrial free cash flow to fall, as customers shunned Mercedes-Benz car showrooms amid the novel coronavirus pandemic;
  • Some blood tests being marketed to tell people if they have had the new coronavirus are a “disaster”, Roche Chief Executive Severin Schwan said on Wednesday as he prepares to launch the drug maker’s own antibody test next month;
  • Air France-KLM is moving towards a 10-billion-euro government-backed rescue deal, sources said, after France agreed to higher guarantees on loans designed to tide the airline group through the coronavirus crisis;
  • Netflix has set price talk for its new US dollar senior unsecured notes due 2025 at 3.75%. Price talk for the accompanying euro tranche will be announced today. The company which has a composite rating of BB-, is targeting a total USD 1bn equivalent deal.

The summary as at 22.04.20

Monday’s extreme sell-off in May 2020 West Texas Intermediate (WTI) crude oil futures, added momentum to a global sell-off in equities and other risky assets yesterday. This morning, Asian share markets slipped to two-week lows, exposing the deep economic damage wrought by the global coronavirus health crisis.

  • The U.S. Senate on Tuesday unanimously approved $484 billion in fresh relief for the U.S. economy and hospitals hammered by the coronavirus pandemic, sending the measure to the House of Representatives for final passage later this week;
  • President Donald Trump said on Tuesday his new U.S. immigration ban would last 60 days and apply to those seeking ‘green cards’ for permanent residency in an effort to protect Americans seeking to regain jobs lost because of the coronavirus;
  • North Korean state media made no mention of leader Kim Jong Un’s health or whereabouts, a day after intense international speculation over his health was sparked by media reports he was gravely ill after a cardiovascular procedure;
  • Fiat Chrysler Automobiles N.V. said on Tuesday it had drawn down on a 6.25 billion euro credit line to buffer its cash reserves during the uncertainty around the coronavirus health crisis;
  • More than 70% of small and medium-sized British businesses have put at least some staff on leave due to the coronavirus, and are waiting for government funds from a business support programme, the British Chambers of Commerce said;
  • Europe’s banks are expected to have to set aside billions for potential loan losses as well as take profit hits because of the coronavirus crisis when they start reporting results over the next two weeks;
  • IBM withdrew financial guidance for the rest of the year as it revealed that the coronavirus crisis had taken a bite out of its software sales at the end of March, pushing revenue down by 3 per cent in the first quarter;
  • Coca-Cola’s sales volumes have dropped by a quarter this month, showing how the coronavirus shutdown is affecting even those companies long regarded as less vulnerable to recessions;
  • Facebook has made a $5.7 billion investment in Jio Platforms Limited. Jio Platforms has a number of brands under it including its telecommunications business Reliance Jio which has grown rapidly thanks to competitive pricing to become the number one mobile carrier in India;
  • Companies reporting today include AT&T, STMicroelectronics and Delta Airlines.

The summary as at 21.04.20

The US Crude oil future market took center stage yesterday as prices on a Crude Oil WTI contract entered negative territory for the first time in history. Global equity markets were generally lower on the day and both investment grade and high yield credit closed lower.

  • Markets are lower this morning. The moves came as President Donald Trump said he would sign an executive order to temporarily suspend immigration to the United States to protect jobs “in light of the attack from the Invisible Enemy.” Millions of Americans have filed for unemployment benefits as the coronavirus pandemic shuts down economic activity in much of the country;
  • Spain has urged EU leaders to approve up to €1.5tn in grants to rebuild the bloc’s pandemic-stricken economies and prevent the worst hit countries from being undercut by better-off states. Spain’s deputy prime minister for the economy, said it was necessary for the so-called coronavirus recovery fund to award grants, not loans, to preserve the bloc’s internal market from unfair competition from states in a better financial position to fund business rescues and stimulus packages;
  • West Texas Intermediate crude futures for May delivery turned positive in overnight trading, after plunging below zero for the first time in history on Monday. The contract in question is set to expire on Tuesday, fueling Monday’s 100% wipeout. The May contract traded at $1.17 per barrel, after earlier trading at negative $14.04 per barrel, meaning traders would effectively pay to have the oil taken off their hands. As the contract approaches expiration, trading volume is typically thin, so longer-term contracts can be more indicative of how Wall Street views the price of oil. The most active contract, for June delivery, traded 7.29% higher at $21.92 per barrel. The July and August contracts were also firmly above the $20 level;
  • The Korean won weakened sharply on Tuesday against the dollar on unconfirmed reports that North Korean leader Kim Jong Un is seriously ill;
  • The U.S. Congress on Monday inched toward a $450 billion deal to help small businesses and hospitals hurt by the coronavirus pandemic, with House Speaker Nancy Pelosi saying negotiators had come to terms on the ‘principles’ of the package as the Senate set a Tuesday session for a potential vote;
  • SAP reported results for Q1 2020. Business activity in the first two months of the quarter was healthy. As the impact of the COVID-19 crisis rapidly intensified towards the end of the quarter, a significant amount of new business was postponed. This is reflected, in particular, in the significant year over year decrease in software licenses revenue;
  • Danone reported good results for the first quarter of 2020 but warned that the second quarter will be challenging due to the coronavirus. They also withdrew guidance for the year in line with other companies;
  • Companies reporting today also include Coca-Cola, Netflix and Associated British Foods

The summary as at 20.04.20

Markets continued to bounce last week with the S&P 500 up 3% and the NASDAQ up over 7% as the perception of a reopening of the US economy seems tangible across market players. This week will be another busy week of corporate earnings reports.

  • China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the coronavirus-hit economy, after it contracted for the first time in decades;
  • Japan’s exports slumped the most in nearly four years in March as US-bound shipments, including cars, fell at the fastest rate since 2011, highlighting the damage the coronavirus pandemic has inflicted on global trade;
  • Crude oil futures fell, with US futures touching levels not seen since 1999, extending weakness on the back of sliding demand and concerns that US storage facilities will soon fill to the brim amid the coronavirus pandemic;
  • US Democrats and Republicans are near agreement on extra money to help small businesses hurt by the coronavirus pandemic and could seal a deal as early as Monday, President Donald Trump said on Sunday;
  • KLM, the Dutch arm of Air France-KLM SA, withdrew a proposed bonus increase for its chief executive on Saturday following public outrage that the company, which is trying to secure state support, should not have even considered the move;
  • Kering’s fashion powerhouse Gucci plans to reopen prototype activities at one of its main Italian sites next week after reaching a deal with unions on health and safety measures for workers;
  • Alibaba said it will invest 200 billion yuan ($28 billion) in its cloud infrastructure over three years – a plan that follows a boom in demand for business software as the coronavirus outbreak peaked in China. The company said in a statement it will spend the funds on semiconductor and operating system development as well as building out its data centre infrastructure;
  • Argentina has disclosed the terms of the proposal to restructure USD 66.2bn in international bonds. The proposal will entail a three-year grace period, a 62% interest reduction and a 5.4% principal haircut;
  • Companies reporting results today include IBM and Halliburton.

The summary as at 17.04.20

US stock futures surged after a report said a Gilead Sciences drug was showing effectiveness in treating the coronavirus and Asian markets are positive on hopes of further stimulus.

  • Asian stocks gained on Friday as President Donald Trump’s plans to gradually re-open the U.S. economy;
  • Data from China showed the world’s second-largest economy shrank for the first time since at least 1992 because of the coronavirus outbreak and tough containment measures. Gross domestic product contracted 6.8% in the quarter year-on-year, slightly more than expected, and 9.8% from the previous quarter;
  • The weak GDP data reinforced expectations that more stimulus is coming from China;
  • US stock futures surged after a report said a Gilead Sciences drug was showing effectiveness in treating the coronavirus. The move pointed to a jump for the stock market on Friday. Gilead shares jumped by 16.41% in after-hours trading after STAT news reported that a Chicago hospital treating coronavirus patients with Remdesivir in a trial were recovering rapidly from severe symptoms. The publication cited a video it obtained where the trial results were discussed;
  • The Labor Department reported that the number of Americans applying for state unemployment benefits totaled 5.245 million last week. Combined with the prior three jobless claims reports, the number of Americans who’ve filed for unemployment over the last four weeks is 22.025 million. That number is just below the 22.442 million jobs added to payrolls since November 2009, when the U.S. economy began to add jobs back after the recession;
  • Rio Tinto reported higher-than-expected iron ore production for the first quarter on Friday, boosting its shares, but cut its forecast for annual copper output citing disruptions due to the coronavirus. The strong iron ore output comes despite a cyclone tearing through Rio Tinto’s Western Australian operations in February, which had prompted it to downgrade its outlook for shipments from the Pilbara region;
  • Louis Vuitton on Thursday posted a 17% drop in comparable sales in the first quarter due to the coronavirus outbreak, as lockdowns imposed in Europe and elsewhere forced it to close stores and production sites;
  • Companies reporting results today include Proctor & Gamble and Schlumberger.

The summary as at 16.04.20

Markets retreated yesterday as the economic calendar delivered bad retail sales and industrial production figures with the perception that this is just the beginning and that April prints will be even worse. It also seems that Trump now looks cautious with his plan to reopen the economy as the idea of creating a task force focused on that topic faded.

  • A report from the US Commerce Department published Wednesday showed retail sales stateside in March plunging a record 8.7% — the largest one-month decline since the department began tracking the series in 1992;
  • Manufacturing in the New York area also slumped by its biggest margin ever to a historic low, surpassing the levels seen in the throes of the Great Recession;
  • Energy stocks remain under pressure after US oil fell to its lowest level in more than 18 years on Wednesday;
  • On a positive note, despite the recent dismal economic data, some market strategists pointed to a slowdown in the daily number of new U.S. coronavirus cases and the flattening in the net number of hospitalizations in New York state as evidence that markets may trend upward in the coming weeks;
  • Investors are waiting for key jobless claims figures out of the US today;
  • New home prices in China returned to growth in March after stalling for the first time in five years in February, suggesting some pent-up demand as the impact from the coronavirus outbreak on the property market gradually fades;
  • Goldman Sachs reported quarterly earnings of $3.11 per share, missing the consensus estimate of $3.35, although revenue exceeded analyst projections. Goldman increased its reserve for credit losses to $937 million compared to $224 million a year ago;
  • Bank of America earned 40 cents per share for the first quarter, 6 cents below estimates, with revenue in line with Wall Street forecasts. Overall profit was down by nearly half compared to a year ago, with $3.7 billion being added to loan loss reserves. The bank did say its liquidity position was very strong, with nearly $700 billion in global liquidity.
  • Citigroup reported a sharp drop in its first-quarter profit as the bank built its loan-loss reserves by $4.9 billion. Although the results were better than anticipated, it’s difficult to compare reported earnings to analyst estimates in light of the coronavirus pandemic.
  • Companies reporting today include Morgan Stanley, Airbus and Ferrari.

The summary as at 15.04.20

News flow has been pretty dramatic yesterday with major US banks delivering the highest loan-loss provisions in a decade. Then, the IMF published the first World Economic Outlook report since the Covid-19 spread, mentioning that the “great lockdown” will affect global GDP by –3% this year, with a bounce expected to take place in 2021 (+5.8%).

Nonetheless, US equity markets were bullish as market players are betting on a V shape recovery and no expectations of a second wave of coronavirus. Also, the enormous injection of liquidity is definitely helping out the mood in the financial system. Let’s see how it goes today with new earnings being released together with Retail sales and industrial production data in the US.

  • Asian share markets took a breather as warnings of the worst global recession since the 1930s underlined the economic damage already done even as some countries tried to re-open for business;
  • China’s central bank on Wednesday stepped up policy support for its embattled economy, cutting a key rate to a record-low and reducing the amount banks must hold as reserves by around $28 billion as the coronavirus crisis slammed the brakes on growth;
  • Oil prices rose as investors looked for bargains after the previous session’s slump and on hopes that consuming countries will look to fill their strategic reserves, although oversupply fears and warnings of a deep recession capped gains;
  • The global economy is expected to shrink by 3.0% during 2020 in a stunning coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s, the International Monetary Fund said on Tuesday;
  • U.S. President Donald Trump on Tuesday halted funding to the World Health Organization over its handling of the coronavirus pandemic, drawing condemnation from infectious disease experts as the global death toll continued to mount;
  • The United Kingdom’s true death toll from the novel coronavirus far exceeds estimates previously published by the government, according to broader official data that include deaths in the community such as in nursing homes;
  • JPMorgan Chase (JPM) – The bank reported quarterly earnings of 78 cents per share, well below the consensus estimate of $1.84 and the year-ago figure of $2.57 a share. The drop in profit came primarily from a boost in reserves to deal with the coronavirus outbreak and potential loan defaults;
  • Johnson & Johnson (JNJ) – J&J reported quarterly profit of $2.30 per share, beating the consensus estimate of $2.00 a share. Revenue also beat forecasts. J&J did lower full-year guidance to account for the impact of the Covid-19 pandemic but also announced a 6.3% dividend hike;
  • Wells Fargo on Tuesday reported first-quarter earnings that were well below expectations as the company set aside money for credit losses amid the coronavirus pandemic;
  • Several U.S. airlines on Tuesday said they reached agreements with the Treasury Department for billions in government grants aimed at softening the blow from the coronavirus;
  • Procter & Gamble is giving its shareholders a raise. The consumer-staples giant said on Tuesday evening that it’s increasing its dividend by 6%. The boost pushed the payout to just over $3 per share on an annual basis. The increase was significant, given the economic uncertainty in key markets around the world. P&G’s last two annual raises were at a more modest 4% rate.
  • ASML a major equipment supplier to computer chip makers, reported on Wednesday first quarter earnings of 391 million euros ($429 million), below analyst expectations amid the global coronavirus outbreak. Nonetheless, believe it is one of the best positioned companies to benefit once we start to see economies return to normality;
  • Other companies reporting results today include Goldman Sachs and Bank of America.

The summary as at 14.04.20

This week is an important test for financial markets as companies start to report results for the first quarter of 2020. Traders and analysts would be able to start getting a better picture of how companies are being impacted by Covid-19 and also their outlook going forward.

Investors will also be looking at the amount of new cases of Covid-19 in order to see whether or not the virus is being contained as well as signs of relaxing measures for business to start slowly moving to a new normal.

  • Asian stocks extended gains after China’s trade data came in better than expected and as some countries tried to restart their economy by partly lifting restrictions aimed at curbing the coronavirus outbreak;
  • China’s exports fell 6.6% in March from a year earlier, while imports shrank 0.9%, a better than expected outcome as factories restarted production, though the global coronavirus health crisis looks set to keep trade under pressure over coming months;
  • European markets are set for a higher open Tuesday as investors look for an exit strategy to the region’s coronavirus lockdowns;
  • Spain allowed some construction and manufacturing sites to reopen Monday and Italy is also allowing some businesses to reopen Tuesday. Meanwhile, Germany is considering how to implement a gradual recovery from the coronavirus pandemic;
  • President Emmanuel Macron announced in a televised address on Monday evening that he would extend France’s national lockdown until May 11. But he said crèches and primary and secondary schools would progressively reopen after that date and vowed to be able to test all with Covid-19 symptoms by then;
  • Oil prices rose after a U.S. agency said shale output in the world’s biggest crude producer would fall by the most on record in April, adding to cuts from other major producers;
  • Apple Inc shipped roughly 2.5 million iPhones in China in March, a slight rebound after one of its worst months in the country ever. Smartphone companies are hoping for a strong recovery in demand in China, where the deadly coronavirus is subsiding. Mobile phone shipments in China in March totaled 21 million units. That was more than three-fold increase from February, yet still down roughly 20% compared with March 2019;
  • Earning season kicks off today with Johnson & Johnson, JP Morgan Chase, Wells Fargo and Delta Airlines (amongst others).

The summary as at 13.04.20

  • OPEC and its oil producing allies on Sunday finalized a historic agreement to cut production by 9.7 million barrels per day, which is the single largest output cut in history;
  • U.K. Prime Minister Boris Johnson has been discharged from St. Thomas’ hospital in London after a week that saw him spend three days in an intensive care unit;
  • Italy was the first Western democracy to be hit by the virus, and it has suffered the most deaths of any nation: nearly 19,000. Now it is likely to set an example of how to lift broad restrictions that have imposed the harshest peacetime limits on personal freedom and shut down all nonessential industry;
  • Deaths from the Covid-19 epidemic in Italy rose by 431, down from 619 the day before, and the number of new cases slowed to 4,092 from a previous 4,694. The tally of deaths was the lowest daily rise since March 19;
  • The number of new cases in mainland China ticked up again, past the 100-mark. The National Health Commission said the country had 108 new confirmed cases, with 98 attributed to travelers from overseas;
  • On Friday EU finance ministers have agreed a €500bn rescue package for European countries hit hard by the coronavirus pandemic;
  • The G20 group is planning to offer lower income countries a moratorium on bilateral government loan repayments as part of an “action plan” to tackle the coronavirus pandemic and stave off an emerging markets debt crisis, a senior G20 official said.

The summary as at 09.04.20

US equity markets ended the mid-week session on a positive note as declines in the growth rate of Covid-19 infections in the US and additional reassurances from last month’s FOMC meeting minutes helped drive a rally in US equities and the third consecutive day of declines in US government bonds. A strong lesson for Europe which continues to fight on the measures to sustain the block in these difficult times.

  • Stocks surged on Wednesday after Sen. Bernie Sanders dropped out of the presidential race, relieving some of Wall Street’s political concerns amid the economic crisis stemming from the coronavirus;
  • With its move on Wednesday, the S&P 500 has risen 23% from its low on March 23, eclipsing the 20 per cent threshold that signifies a bull market;
  • Stocks in Asia were mostly higher in Thursday afternoon trade ahead of the release of the U.S. unemployment claims report;
  • On the economic data front, the U.S. unemployment claims report for the week ended April 4 is set to be out at 8:30 a.m. ET Thursday, with more than five million expected to have filed for unemployment last week as the country continues to grapple with the coronavirus pandemic;
  • US virus cases increased 8.1 per cent on Tuesday, marking a fifth straight day of slower growth. The absolute number of new cases rose by almost 30,000, but some analysts hoped Wednesday’s tally could be the high-water mark;
  • Renewed hopes for oil production cuts helped fuel the rally, with a late surge in crude prices driving gains in energy shares;
  • G20 oil ministers are set to meet on Friday to try to find measures to support the global industry. Before that, Saudi Arabia and Russia are scheduled to meet on Thursday to address a feud over production that has flooded global markets with supply and halved the price of oil this year;
  • There was also support from the release of the Federal Reserve’s minutes from two emergency meetings in March. The minutes showed most members favoured leaving interest rates near zero “until policymakers were confident that the economy had weathered recent events”;
  • Airbus announced plans on Wednesday to cut jetliner production across the board after the coronavirus epidemic triggered aviation’s worst industrial crisis and drastically reduced deliveries to cash-starved airlines;
  • Global automakers reeling from the Covid-19 pandemic are accelerating efforts to restart factories from Wuhan to Maranello to Michigan, using safety protocols developed for China and U.S. ventilator production operations launched in recent weeks.

The summary as at 08.04.20

Markets ended broadly negative in the US overnight. Two things are still unresolved as a meeting between OPEC members doesn’t necessary imply a positive outcome as well as it is still unclear how Europe will find common ground on a common fiscal policy to sustain its countries after the coronavirus story. Those unsolved questions added a little bit of caution in the markets.

  • Asian stocks stepped back after two sessions of sharp gains as investors tempered their optimism about the coronavirus while death tolls were still mounting across the globe;
  • After a month of tightening lockdowns across Europe to combat coronavirus, Austria, the Czech Republic and Denmark will in the coming weeks become the first European countries to loosen restrictions on daily life and business;
  • Oil bounced back, with U.S. crude jumping over $1, lifted by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts. However, this will only be possible if the United States and several others join in with curbs to help prop up prices that have been hammered by the coronavirus crisis;
  • Even as medical teams struggled to save an onslaught of gravely ill coronavirus patients and deaths hit new highs, the number of COVID-19 hospitalizations seemed to be leveling off in New York state, the U.S. epicenter of the pandemic, Governor Andrew Cuomo said on Tuesday;
  • The Chinese city where the coronavirus epidemic first broke out, Wuhan, ended a two-month lockdown, allowing people to leave the city, if they were healthy, amid concerns of a second wave of infections as cases in mainland China rose;
  • Global airlines warned that 25 million jobs across the world could be at risk from the coronavirus air travel downturn, and held out against offering refunds to passengers as cash runs out;
  • Britain’s Barclays and Spain’s Banco Sabadell on Tuesday said senior executives would give up some of their pay, joining a list of European banks where bosses have made such a gesture as part of efforts to combat the new coronavirus;
  • Deutsche Post said on Tuesday the new coronavirus had caused its business to drop below internal forecasts by 50 million euros in February and by 150 million euros in March, forcing it to abandon its profit goals for the year.

The summary as at 07.04.20

Monday saw a positive mood on global equity markets. Covid-19 headlines were positive showing the virus is slowing in parts of Europe and governments are evaluating plans to safely roll back some safety measures. At the same, the US is bracing for what is expected to be one of the most challenging weeks since the pandemic began. Meanwhile, the original OPEC+ call has been re-schedule to Thursday 9, and looks like Russia and the Saudi Arabia deal is a matter of time as pushing the meeting forward was just to get more time to have other members participating in the production cut.

  • Stocks surged on Monday as a slew of coronavirus headlines pointed to a potential stabilization particularly in Europe and a number of US states. The Dow soared 1,600 points, posting its third biggest point gain ever. The S&P 500 jumped 7% to its highest level since March 13. With Monday’s rally, the S&P 500 bounced about 20% from its 52-week low on March 23;
  • Asian stock markets rallied for a second day, and riskier currencies rose, buoyed by tentative signs the coronavirus crisis may be levelling off in New York and receding in Europe;
  • British Prime Minister Boris Johnson was being treated for worsening coronavirus symptoms in an intensive care unit on Tuesday, with his foreign minister deputising for him as the nation tackles the Covid-19 crisis;
  • The governors of New York, New Jersey and Louisiana pointed to tentative signs on Monday that the coronavirus outbreak may be starting to plateau in their states but warned against complacency as the death toll nationwide approached 11,000;
  • Major oil producers including Saudi Arabia and Russia are likely to agree to cut production at a Thursday meeting but only if the United States joins the effort, aimed at coping with the disastrous effect of the coronavirus on fuel demand;
  • British drugmaker GlaxoSmithKline will invest $250 million in Vir Biotechnology and collaborate to develop potential treatments for Covid-19;
  • Lufthansa will discuss permanently grounding its Germanwings low-cost airline unit at a management board meeting;
  • Air France-KLM has 6 billion euros in cash at hand, Anne Rigail, chief executive of Air France told French newspaper Le Figaro, adding that state support from the French and Dutch governments would be needed soon in order to keep the airline afloat;
  • Samsung said it expects 6.4 trillion Korean won ($5.23 billion) in first-quarter operating profit for 2020, up 2.7% from the 6.23 trillion won it posted for the same period a year earlier.
  • Oil had its best single day on record and US initial claims for unemployment insurance indicated job losses more than doubled compared to the record figure reported last week. Nonetheless global markets remained relatively calm yesterday and US and European equity markets closed higher.

The summary as at 06.04.20

  • Markets are higher this morning as markets try to recover from another decline last week;
  • Non-farm payrolls fell by 701,000 in March, significantly below consensus expectations of a decline of 100,000. Unemployment climbed 0.9pp to 4.4%. As bad as this jobs report was, its survey period still fell before the step-up in initial jobless claims seen over the past two weeks;
  • British Prime Minister Boris Johnson was admitted to hospital for tests on Sunday after suffering persistent coronavirus symptoms 10 days after testing positive for the virus, though Downing Street said he remained in charge of the government;
  • The United States is entering what a senior official warned on Sunday would be the “hardest” week of the coronavirus crisis as the death toll mounted, but some saw glimmers of hope from a slight slowing of fatalities in hard-hit New York;
  • Saudi Arabia is taking unprecedented action in delaying the release of its international crude selling prices by five days, a senior Saudi source familiar with the matter said on Sunday, as the kingdom and other major producers seek to halt the free-fall in worldwide crude prices;
  • Apple is designing and producing face shields for medical workers, Apple CEO Tim Cook said on Sunday;
  • Late last year, an analyst known for his Apple product predictions had suggested that Apple could release up to four versions of its expected iPhone 12 this fall. Now, one analyst predicts that in a worst-case scenario, there may not be a flagship iPhone in 2020 at all. Apple has not provided any indication that the coronavirus pandemic has impacted its planned product launches, as it typically does not discuss future plans in such a way.

The summary as at 03.04.20

  • Stocks in Asia were little changed in Friday morning trade. The moves came after an overnight surge in oil prices, which saw U.S. crude futures soaring more than 24%;
  • On the data front, the number of Americans filing for unemployment benefits surged to 6.6 million in the week ending March 28, doubling the prior record high of 3.3 million from the previous period;
  • Meanwhile, a private survey released Friday showed China’s services sector shrinking further in March. While the Caixin/Markit services PMI rebounded to 43 last month from a record low of 26.5 in February, it still remained deep in contraction territory and was the second weakest reading or record;
  • President Trump tweeted he expects Saudi Arabia and Russia to cut supply by at least 10 million barrels, raising optimism that the two countries could soon negotiate a deal to end an ongoing price war;
  • Energy shares jumped 9.1% in the US, as WTI crude rebounded more than 24% to record its largest single-day gain in history;
  • On the local market, HSBC Bank Malta and GO followed BOV in postponing their final dividend for 2019.

The summary as at 02.04.20

  • Q2 2020 started off with pressure on global equity markets and increased risk aversion. Global manufacturing numbers reflected in the so-called PMIs, came in particularly weak across the globe. This marks the first wave of economic data that reflects the significant economic impact of COVID-19 as it began to spread more rapidly across Europe and the US in March.
  • US equity markets closed sharply lower yesterday with declines in excess of 4% for all major indices. Small cap stocks continue to come under the most pressure, as the Russell 2000 index closed –7% yesterday and is currently down 35.6% YTD;
  • 10yr US Treasury bonds closed –10bps/0.58% yield, which is rapidly approaching the 9 March record low close of 0.50% yield;
  • European markets are set to open largely flat Thursday as markets react to the coronavirus epidemic in the US;
  • Global markets will be reacting to news Thursday that the number of confirmed COVID-19 cases in the US surpassed 200,000 Wednesday, doubling since Friday;
  • President Donald Trump has warned that the country could see an even greater surge in cases over the next few weeks. White House officials are projecting 100,000 to 240,000 deaths in the U.S., with coronavirus fatalities peaking over the next two weeks;
  • European data Thursday includes German trade numbers and euro zone producer prices for February;
  • The Bank of England’s pressure on HSBC to cancel its dividend for the first time in 74 years has reignited a debate at the top of the bank over whether it should redomicile to Hong Kong;
  • Carnival Corporation in upsizing its rescue bond sale backed by its cruise ships to $4 billion after drawing strong demand, despite the world’s largest cruise operator warning it might only have enough cash to stay operational for eight months.

The summary as at 01.04.20

  • Yesterday in the US, the Dow closed the first quarter of the year down 23%, capping its worst first quarter ever;
  • Markets expected to open lower in Europe;
  • President Donald Trump prepared Americans for a surge in coronavirus cases, saying the U.S. will face a “very, very painful two weeks.” White House officials are projecting between 100,000 and 240,000 deaths in the U.S. with coronavirus fatalities peaking over the next two weeks;
  • Meanwhile in Asia, stocks traded mixed as a private survey showed Chinese manufacturing activity expanding slightly in March. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) for March came in at 50.1, above expectations of a reading of 45.5 by analysts;
  • Shares of HSBC and Standard Chartered plunged 8.83% and 5.09%, respectively, after both British lenders cancelled dividend payments at the request of the U.K. financial regulator in light of the coronavirus pandemic;
  • In terms of European data, euro zone unemployment data for February is due, Spanish new car registrations for March and final euro zone manufacturing PMI data are also published;
  • Stock sell-offs saw equities across all S&P quality rankings tumble about the same amount, creating “an enormous opportunity to own high-quality names” when the virus threat subsides, Solita Marcelli, deputy chief investment officer for the Americas at UBS, wrote in a note to clients;
  • Moving to the local market, today Bank of Valletta will be presenting their accounts for the FY2018

The summary as at 31.03.20

  • US equity markets enjoyed a strong session on Monday, with the main indices gaining in excess of 3%. Shares of Johnson & Johnson popped up by 8% after it announced a vaccine candidate for the coronvirus;
  • With Monday’s gains, the S&P 500 is now up 17% from its coronvirus sell-off low reached on March 23;
  • From a statistical point of view, we continue of observe a decrease in global new cases of coronavirus infections recorded by the WHO, although driven by geographically differing trends. Italy, Spain and France are down from peak levels, while others such as Germany and the UK are still at high levels. US still increasing with a peak in new cases recorded yesterday at almost 20,000;
  • The trajectory of Chinese data should hopefully serve as a future template for other major economies. China’s PMIs – a gauge of manufacturing activity – plunged to a record low of 35.7 in February only to recover strongly to 52.0 in March. Analysts polled by Reuters had expected the official PMI to come in at 45.
  • At a meeting via video-link last week, EU-27 leaders clashed over the best response to the crisis. Countries such as Spain, France and Italy favoured the issuance of EU-backed debt or ‘coronabonds’. However, the idea of burden sharing was rejected by some other members states that included Germany, Austria and the Netherlands. The latter group preferred that countries would ask for funds through other means, where they come with strings attached.

The summary as at 30.03.20

  • Last week was a good week for equity markets as they bounced from their lows following further easing from central banks and the $2 trillion fiscal stimulus package in the US which on Friday was given the final approval by the House of Representatives;
  • Last week the S&P rallied 10% whereas the DAX rallied 8%. Had there not been profit taking on Friday, these markets would have closed the week much higher than that;
  • Today European markets are set to start the week lower as the coronavirus pandemic remains in focus for investors;
  • Oil prices fell to the lowest in most than 17 years as demand plunged as a result of the pandemic and an unrelenting price was between Saudi Arabia and Russia showed no signs of easing;
  • Global markets continue to take stock of the evolving coronavirus pandemic. The virus has already infected more than 720,000 people worldwide and caused at least 33,925 deaths;
  • President Donald Trump on Sunday extended the national social distancing guidelines to April 30, backing off from his previous remarks that he wanted the country to reopen for business by Easter;
  • This week will be a very important week as it marks the end of the first quarter, meaning that companies will start to report and we will also get important data on the state of the economies,

The summary as at 27.03.20

  • Yesterday Wall Street recorded its first three-day rally since February on Thursday as investors digested an unprecedented surge in US unemployment claims and looked ahead to a $2tn stimulus package that had cleared the US Senate overnight;
  • The US benchmark S&P 500 index closed up 6 per cent as the House indicated it could vote on the deal as early as today. The Dow Jones Industrial Average registered its’ strongest three-day percentage increase since 1931, rallying by 21% from its Monday low;
  • The urgency of the congressional activity was underscored by data showing that more than 3m people filed for unemployment benefits in the US last week as coronavirus shut businesses across the country;
  • Investors took heart from comments by Jerome Powell, chairman of the Federal Reserve, who said the US central bank would not “run out of ammunition” in supplying the American economy with liquidity as it grapples with the pandemic;
  • Chinese President Xi Jinping called on leaders from the Group of 20 nations for greater international coordination of macroeconomic policy to restore confidence in global growth in face of the impact of the coronavirus. Leaders from major world economies, including the U.S., Japan and Germany, held an extraordinary meeting via video conference to respond to the global pandemic;
  • The US now has more confirmed coronavirus cases than China, making it the country with the largest outbreak in the world;
  • Volkswagen has called on the European Central Bank to speed up its plans to buy commercial paper directly from the world’s largest companies to help them ride out the coronavirus crisis.

Over the past few days, we have started to observe some improvement in investors’ confidence as policy authorities world-wide have rolled out more stimulus measures to combat the coronavirus pandemic. With markets down 30% from their February highs, some are starting to see opportunities in the market and don’t want to miss out of buying good quality investments at bargain prices.

Notwithstanding this, we continue to air caution and a balanced approach in the deployment of cash knowing that it could take a bit more time for the markets to settle.

The summary as at 26.03.20

  • Major US equity indices registered their first back-to-back gains since February on Wednesday after some wild swings, the Dow Jones Industrial Average soaring more than 1,00 points, then shedding much of its gains in the final 15 minutes of the trading day;
  • European markets are expected to open lower Thursday as global market sentiment sours once again, ahead of upcoming U.S. jobless claims data that are expected to show a massive spike in unemployment claims;
  • The moves in global markets come despite Washington’s pledge of massive aid for the economy to mitigate the impact of the virus. The Senate unanimously approved a $2 trillion economic relief package late Wednesday and the stimulus bill now heads to the House, which will push to pass it by voice vote Friday morning as most representatives are out of Washington;
  • In Europe, EU leaders will hold a virtual summit to discuss their response to the coronavirus outbreak amid some criticisms of a lack of coordinated response to the crisis;
  • Italy and Spain are the worst-hit countries in Europe, with the death toll in each country surpassing 7,000 and 3,500 respectively;
  • The death toll in the U.S. has now surpassed 1,000;
  • The US has raised the pressure on Saudi Arabia to change course in its oil price war with Russia, calling on the kingdom to “rise to the occasion” and start working to stabilise global energy markets;
  • Investors are turning their back on high-dividend stocks, worried that a growing list of companies postponing their annual general meetings is adding to the risks posed to payouts by the coronavirus outbreak;
  • Former Federal Reserve chairman Ben Bernanke said in an interview that the coronavirus halt resembles more like a snowstorm or a natural disaster than an economic depression. He also expects a sharp US recession but also a fairly quick recovery.

Essentially, we continue to face a health problem and that needs to be the primary thing the market feels has been addressed before it is able to move forward. This means that the infection rate has to peak and we get a sense of the damage done by the shutdown. Without that it’s very difficult for the market to assess the downside. In the meantime, policy authorities are building an economic buffer which is essential to stabilise the downside risk for the next few months.

The summary as at 25.03.20

  • Asian stocks rallied as congressional leaders in Washington agreed on a $2tn package to soften the US economic blow from coronavirus, the prospect of which had on Tuesday propelled Wall Street to its best day in more than a decade;
  • In Europe Tuesday evening, the Eurogroup of euro zone finance ministers failed to come to an agreement over the use of the European Stability Mechanism (ESM) to help euro zone members fight the economic impact of the coronavirus;
  • E.On releases earnings and Credit Suisse releases its annual report;
  • With regards to economic data Germany’s Ifo Institute releases its March survey of business sentiment;
  • China’s central bank is in discussions to cut the interest rate banks pay on deposits for the first time since 2015, in a bid to help banks eke out higher profits as they are enlisted to help spur an economic recovery following the coronavirus outbreak;
  • Frenzied trading around the coronavirus crisis helped the world’s biggest investment banks boost markets revenues by as much as 30 per cent in the first quarter;
  • SoftBank Group explored an audacious attempt to take the Japanese technology conglomerate private over the past week, holding discussions with investors including hedge fund Elliott Management and the Abu Dhabi sovereign investment vehicle Mubadala.

The summary as at 24.03.20

  • Asia-Pacific stocks rallied after the US central bank vowed to buy whatever amount of government bonds necessary to shield the economy from the impact of the coronavirus pandemic;
  • The Federal Reserve announced on Monday that it will embark on an unlimited asset purchase programme to support markets. That represents unprecedented support by the Fed as it is effectively committed to keep expanding its balance sheets as necessary, rather than a commitment to a set amount;
  • Equities markets across Europe were set to rise sharply on Tuesday, reversing direction from significant falls in the previous session;
  • A series of key surveys of business executives covering Europe’s biggest economies is due later this morning. The figures are expected to be bleak, but provide economists and investors with a reading on just how bad the situation has become;
  • President Trump suggested he will not allow the coronavirus to do long-lasting damage to the US economy hinting that a shutdown could be a question of weeks rather than months. On Sunday, he twitted that the cure cannot be “worse than the problem itself”;
  • In Italy, the Milan region, which accounts for about half of Italy’s coronavirus infections, finally started to see the number of new cases slowing down;
  • The New York Stock Exchange conducted its first day of fully electronic trading yesterday due to the spread of the coronavirus with no humans on the trading floor.

The key uncertainty in the market is how long Europe and the US will be locked down. Lower interest rates and stimulus packages are not helping if people cannot go out and spend or even if they can but they don’t want to because they are scared.

The summary as at 23.03.20

  • The number of Covid-19 cases world-wide more than doubled in a week to nearly 330,000 on Sunday, with deaths surpassing 14,000. US infections topped 32,000, jumping 10-fold from a week earlier;
  • US equities suffered their biggest one-week decline since the financial crisis in 2008 last week, with the S&P dropping more than 13%. Those losses put the broad market average more than 32% below its record set on Feb 19th.
  • US lawmakers and administration officials had hoped to reach agreement on a $1.3 trillion deal so both chambers of Congress could approve it on Monday. But the package hit a procedural roadblock in the Senate on Sunday, a sign of political discord in the midst of a national emergency.
  • On a decisively more positive tone, China’s government is talking up the prospects for a rapid economic rebound from the coronavirus. Since Friday, government officials have pointed to the control of the outbreak and the resumption of activity as reasons for optimism with regards to China’s outlook.

The key uncertainty in the market is how long Europe and the US will be locked down. Lower interest rates and stimulus packages are not helping if people cannot go out and spend or even if they can but they don’t want to because they are scared.

The summary as at 20.03.20

  • European markets are set to open sharply higher Friday after a volatile week, as central banks and governments around the world adopt a “whatever it takes” approach to mitigating the economic hit from the coronavirus pandemic.
  • Tesla has told employees it reduced the number of workers at its California vehicle factory to curb the spread of coronavirus as Chief Executive Elon Musk said the company may start producing ventilators to ease a U.S.
  • U.S. Senate Majority Leader Mitch McConnell defended plans for Congress to aid airlines, saying it was not a bailout but loans that would be need to be repaid, while U.S. President Donald Trump backed the idea of the government taking equity stakes as part of corporate rescue packages.
  • As of its Thursday close, the Dow Jones Industrial Average has fallen 13.36% so far this week, putting it on track for its largest weekly percentage loss since the financial crisis. The 30-stock index remains 32% below its all-time high level from February, while the S&P 500 is 29% below its high.
  • Clearly there is a lot of forced selling going on. A lot of positions are being unwound

The summary as at 19.03.20

  • The ECB announced a new €750bn bond buying programme, covering both sovereign bonds and corporate debt, for the duration of the pandemic crisis, but at least until the end of the year. Another big support package for the market, which has in recent days been resistant to stimulus and support programmes.
  • In the US, the Dow Jones Industrial Average closed below 20,000 point for the first time since early 2017, effectively erasing all the gains made under US President Donald Trump. At its February peak, the Dow had surged more than 60% from Trump’s election day.

In the current market circumstances having an element of cash available in your portfolio is of paramount importance because it provides investors with the opportunity to “drip feeding” buying opportunities as the situation evolves.

In the circumstances we continue to favour exposure to defensive sectors and generally have a tilt towards US names, in view of the significantly better economic fundamentals and range of policy tools at its disposal.

The summary as at 18.03.20

  • Equity markets recovered some ground on Tuesday, clawing back a significant portion of Monday’s steep losses;
  • US markets are still down by some 25% from its February 19th record closing high as we haven’t had back-to-back positive days for two weeks;
  • The Trump administration unveiled a $1 trillion stimulus package that could deliver $1,000 cheques to Americans within two weeks;
  • Many other governments look to fiscal stimulus. Britain unveiled a £300 billion rescue package for business threatened with collapse while France is to pump €45 billion of crisis measures into its economy to help companies and workers;
  • The US Federal Reserve stepped in again to ease funding stress among corporates by reopening its Commerical Paper Funding Facility to purchase short term corporate debt to help companies be able to continue paying workers and buy supplies through the pandemic;
  • The yield on the 10-year Treasury note rose to 0.994% from 0.722%, its biggest one-day gain since September 2008;
  • US benchmark oil futures sank to near their 2016 trough of around $26 per barrel on prospects of slow demand and a Saudi-instigated price war.

The global transmission of the coronavirus remains a key risk to global growth and financial markets. The economic fallout from the outbreak will likely be an unknown variable for the next several months. Growth expectations have been lowered as a result and may need to be revised downwards if contagion spreads without adequate remedies. Aggressive and transparent accommodative monetary and/or fiscal policy should help alleviate some selling pressure, but unfortunately, it does not provide a cure or curtail the degree of the outbreak.

The summary as at 17.03.20

  • On Monday, US equities suffered their third-largest daily percentage drop on record, beaten only by the 1987 “Black Monday” rout and the crash of October 1929;
  • In Europe, shares plummeted to 2012 lows, with markets in France and Spain leading losses as the two countries joined Italy in enforcing a national lockdown;
  • Gauges of volatility on Wall Street and in Europe, which measure the fear among investors, jumped to record highs on both sides of the Atlantic;
  • Investors appear increasingly worried about how effectively policymakers will be able to mitigate the economic damage from the spreading virus, with Trump already hinting at a possible recession in the US;
  • Meanwhile, initial trials of a vaccine to protect against COVID-19 started on Monday. The vaccine was developed by NIAID scientists and their collaborators at Moderna Inc, a US listed biotech firm.

The US

The S&P 500 index of US stocks fell 12 per cent on Monday, a day after an emergency rate cut by the Federal Reserve, as the US and other countries around the world imposed stricter curbs on public activity.

President Donald said the country could be heading for a recession due to the coronavirus outbreak.

The Dow Jones Industrial Average suffered its worst day since the “Black Monday” market crash in 1987 Monday and its third-worst day ever. This was despite the Federal Reserve embarking on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak.

Europe

European markets are expected to open higher Tuesday with the fast-spreading coronavirus putting the continent in shutdown mode and fueling fears of an impending recession.

Emmanuel Macron also said he was ordering people in France to stay at home for up to 15 days because of the coronavirus outbreak.

In the U.K., the government stopped short of closing schools but stepped up its advice to the public, with U.K. Prime Minister Boris Johnson telling the country on Monday to avoid social contact.

Asia

Stocks in Asia Pacific were mostly higher Tuesday trade as they seesawed in reaction to Wall Street’s plunge and the Philippines shut its markets temporarily.

Stocks

These 64 stocks in the S&P 500 fell at least 20% yesterday as the coronavirus panic intensified

  • MGM Resorts International
  • Apache Corp.
  • Capri Holdings Ltd.
  • Tapestry Inc.
  • Ventas Inc.
  • DXC Technology Co.
  • L Brands Inc.
  • Noble Energy Inc.
  • Alliance Data Systems Corp.
  • Discover Financial Services
  • Simon Property Group Inc.
  • Synchrony Financial
  • LyondellBasell Industries NV
  • Realty Income Corp.
  • Lincoln National Corp.
  • Darden Restaurants Inc.
  • Wynn Resorts Ltd.
  • Welltower Inc.
  • Vornado Realty Trust
  • Lowe’s Companies Inc.
  • Capital One Financial Corp.
  • Boeing Co.
  • Ameriprise Financial Inc.
  • Coty Inc. Class A
  • Aptiv PLC
  • Apartment Investment & Management Co Class A
  • Gap Inc.
  • Weyerhaeuser Co.
  • Healthpeak Properties Inc.
  • Universal Health Services Inc. Class B
  • Ulta Beauty Inc
  • Fifth Third Bancorp
  • Citizens Financial Group Inc.
  • KeyCorp
  • Expedia Group Inc.
  • Hartford Financial Services Group Inc.
  • PulteGroup Inc.
  • Travelers Companies Inc.
  • CarMax Inc.
  • Stanley Black & Decker Inc.
  • Kohl’s Corp.
  • Hologic Inc.
  • Western Digital Corp.
  • TJX Companies Inc
  • Nordstrom Inc.
  • Ross Stores Inc.
  • Applied Materials Inc.
  • Microchip Technology Inc.
  • D.R. Horton Inc.
  • SL Green Realty Corp.
  • NVR Inc.
  • Broadcom Inc.
  • Micron Technology Inc.
  • Kimco Realty Corp.
  • Sysco Corp.
  • Home Depot Inc.
  • TechnipFMC Plc
  • CenterPoint Energy Inc.
  • Assurant Inc.
  • Unum Group
  • Lennar Corp. Class A
  • Whirlpool Corp.
  • Paychex Inc.
  • Federal Realty Investment Trust

The summary as at 16.03.20

  • Major US equity indexes staged a significant rally last Friday, posting their best day since October 2018, as the US declared a national emergency, effectively opening the doors to more federal aid;
  • However, futures on Monday point to another weak open after the Federal Reserve slashed its benchmark interest rate to near zero on Sunday evening and announced plans to buy $700 bn in Treasuries and MBSs;
  • The market reaction shows investors are concerned about the economy because it comes before many data points have signaled a sharp slowdown;
  • Data out of China this morning underscored just how much economic damage the COVID-19 had already down, with industrial output and retail sales plunging 13.5% and 20.5, respectively.

We expect the markets to continue to oscillate, possibly retesting new lows. Eventually, the volatility will subside and fundamentals will have to return.

The summary as at 13.03.20

  • U.S. lawmakers and the White House were close to a deal on economic relief amid the coronavirus outbreak.
  • Yesterday markets were hammered by coronavirus uncertainty
  • Today markets are up following the Federal Reserve intervention
  • Additional countries taking extra measures to contain the disease
  • China says virus has peaked at epicentre
  • Epidemics balloon from Italy to Iran
  • The dollar surged as people sought to secure dollar funding, while palladium and gold prices plunged

Federal Reserve

  • The Federal Reserve moved to stem a market meltdown on Thursday
  • Offers $1.5 trillion in short-term loans
  • Some Analysts say could point to more aggressive in coming days to stimulate the economy and stabilize the financial system
  • Treasury yields rose as the Federal Reserve intervened to stem a market meltdown with a dramatic injection of cash.

ECB

  • Provides additional liquidity to banks, cuts loan cost
  • But rates unchanged
  • Markets extend losses
  • Crisis-fighting arsenal nearly exhausted

 

Germany pledges unlimited cash for virus-hit businesses

The German government has pledged unlimited cash to companies hurt by the coronavirus pandemic, and said it may need to take on additional debt to finance the extra spending, Guy Chazan in Berlin writes.

Mnuchin says coronavirus sell-off will be great opportunity for long-term investors like ’87 crash

Treasury Secretary Steven Mnuchin said Friday that the current market sell-off will be short-lived and, as such, looks like a compelling investment opportunity for investors looking to buy equities at a discount.

The summary as at 12.03.20

  • The past 10-year bull market run is now over as major uptrends have been broken
  • Quarantine measures will cause pressure on corporates and households alike
  • We expect governments to intervene more decisively with policy stimulus measures
  • Whether this will have any impact on investor confidence remains to be seen
  • Selling pressure will ultimately be offset by buying sentiment – however prospects of any major rebound in short term seems unlikely

This article was issued by Calamatta Cuschieri. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.