Monday, 6 April 2020

COVID-19: Hopeful signs in West, renewed concerns in Asia

Markets fell last week, with the S&P 500 declining 2.1 percent.

While the falls were mainly driven by fears over the COVID-19 pandemic, latest reports on the disease provide some encouraging news.

Italy, which has suffered the highest death toll in the world from the disease, reported on Sunday another 525 deaths, the lowest since 19 March, to bring its total to 15,887.

Spain, which has the second highest death toll, reported 674 deaths, its third straight day of declining numbers.

In the US, the death toll hit 9,458 on Sunday, with New York state, the epicentre, seeing 594 deaths, slightly down from the previous day.

However, even as the West sees hopeful signs, fears of a second wave of the pandemic has hit Asia.

China reported 39 new coronavirus cases as of Sunday, up from 30 a day earlier. 78 new asymptomatic cases had been identified as of the end of Sunday, compared with 47 the day before.

In Japan, Prime Minister Shinzo Abe looks set to declare a state of emergency as early as Tuesday in a bid to stop the coronavirus spreading across the country as the cumulative number of infections topped 1,000 in Tokyo alone.

Saturday, 4 April 2020

Markets fall as US unemployment jumps

Markets were mostly lower on Friday.

The S&P 500 fell 1.5 percent, the STOXX Europe 600 fell 1.0 percent and the Shanghai Composite fell 0.6 percent.

A report on Friday showed that the US economy lost 701,000 jobs in March and the unemployment rate rose to 4.4 percent from 3.5 percent in February.

In the euro area, the IHS Markit composite PMI plunged to an all-time low of 29.7 in March from 51.6 in February.

A poll by Reuters shows that economists now think that the global economy will contract 1.2 percent this year compared to a 1.6 percent expansion predicted in a poll three weeks ago.

Friday, 3 April 2020

Markets rise even as economists fear severe economic contraction

Markets were mostly higher on Thursday.

The S&P 500 surged 2.3 percent, the STOXX Europe 600 rose 0.4 percent and the Shanghai Composite jumped 1.7 percent. However, the Nikkei 225 fell 1.4 percent.

Oil prices surged as US President Donald Trump tweeted that he expects Saudi Arabia and Russia to reach an agreement to significantly cut production. West Texas Intermediate crude rose 24.7 percent and Brent rose 21 percent.

However, Manish Raj, chief financial officer at Velandera Energy, noted that “skepticism remains in the market whether the said cuts would actually be made”.

“All the fine details seem to still be up in the air so President Trump’s tweet might have been premature,” said Edward Moya, senior market analyst at Oanda.

Meanwhile, the COVID-19 pandemic remains a threat to markets, with confirmed cases topping one million on Thursday.

Financial ratings agency Fitch on Thursday predicted that the US and eurozone economies would contract this quarter by up to 30 per cent on an annualised basis.

The US Labour Department reported that 6.65 million workers filed for unemployment benefits last week, the most ever recorded.

Thursday, 2 April 2020

Markets fall, March low “will get taken out”

Markets fell sharply on Wednesday.

The S&P 500 sank 4.4 percent, the STOXX Europe 600 tumbled 2.9 percent and the Nikkei 225 plunged 4.5 percent.

DoubleLine Capital CEO Jeffrey Gundlach said on Tuesday that the market was set to fall and that the March low “will get taken out”.

“Take out the low of March and then we’ll get a more enduring low,” he said.

US President Donald Trump warned late Tuesday that a “very, very painful” two weeks lies ahead for the country as the White House released new projections for 100,000 to 240,000 deaths in the US from the COVID-19 pandemic even if current social distancing guidelines are maintained.

Elsewhere, Italy reported another 727 deaths from COVID-19 on Wednesday, bringing its total death toll to 13,155, while Spain reported 864 deaths, bringing its total to 9,053.

France reported 509 new deaths on Wednesday to become the fourth country to pass the 4,000 coronavirus deaths threshold after Italy, Spain and the US.

Wednesday, 1 April 2020

Markets mixed as global COVID-19 deaths continue to rise

Markets were mixed on Tuesday.

The S&P 500 fell 1.6 percent but the STOXX Europe 600 rose 1.7 percent.

Earlier in Asia, the Nikkei 225 fell 0.9 percent but the Shanghai Composite rose 0.1 percent.

Some relief for investors came from data from China showing that its official manufacturing PMI rose to 52.0 in March from 35.7 in February and its services PMI rose to 52.3 from 29.6.

However, economists at ANZ said that the “outlook for Q2 continues to be concerning due to an acute drop in external demand and lacklustre domestic demand”.

Simona Gambarini, markets economist at Capital Economics, said that a sustained recovery in stock prices “probably won’t happen until there is evidence that the pandemic is being contained at a global level”.

That appears to be unlikely soon. The global COVID-19 pandemic has continued to exact a heavy toll around the world, with both Italy and Spain reporting more than 800 deaths from the disease on Tuesday and French and US death tolls surpassing China's death toll.

Tuesday, 31 March 2020

US stocks rise even as COVID-19 death toll surpasses 3,000

Markets were mixed on Monday, with stocks rising in the US and Europe but falling in Asia.

The S&P 500 surged 3.4 percent after President Donald Trump said on Sunday that he had extended social-distancing guidelines through 30 April and that the US would be “well on our way to recovery” by early June.

However, analysts at Goldman Sachs suggested that for the stock market to hit a bottom, among other things, the spread of COVID-19 must begin to slow.

Instead, the toll from COVID-19 in the US has continued to rise dramatically, hitting 3,008 deaths and more than 160,000 confirmed infections on Monday evening.

“Tactically, however, we believe it is likely that the market will turn lower in the coming weeks, and caution investors against chasing this rally,” the Goldman analysts said.

Meanwhile, in Italy, the COVID-19 death toll rose by 812 on Monday to 11,591, the most in the world, but the number of new cases rose by 4,050, the lowest since 17 March.