Thursday, 30 April 2020

Stocks jump on hopes for COVID-19 treatment and Fed support

The S&P 500 jumped 2.7 percent on Wednesday on hopes for a treatment for COVID-19.

Market sentiment was buoyed by a report from Gilead Sciences on Wednesday that its drug, remdesivir, met the primary endpoint of a clinical trial evaluating the drug as a treatment for the disease.

Also on Wednesday, the Federal Reserve announced that it would maintain its current interest rate target between 0 and 0.25 percent.

“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Federal Open Market Committee said in a statement after its monetary policy meeting.

The report on remdesivir and the Fed's supportive stance helped the market shrug off news that US GDP shrank at a 4.8 percent annualised rate in the first quarter.

Wednesday, 29 April 2020

Markets mixed, economic downturn may be “very protracted”

Markets were mixed on Tuesday.

The S&P 500 fell 0.5 percent and the Shanghai Composite fell 0.2 percent but the STOXX Europe 600 jumped 1.7 percent.

While markets have been cheered by recent suggestions of economies reopening, some analysts are advising caution.

Chris Gaffney, president of world markets at TIAA Bank, said that there are “a lot of folks out there saying the downturn is going to be much deeper and probably last longer than many had originally predicted”.

“We’re not gonna see, suddenly, a sudden stop in the economy become a sudden start,” Kerry Craig, a global market strategist at JPMorgan Asset Management, told CNBC on Tuesday. “It’s gonna be very protracted, it’s gonna come through very slowly and I don’t think that’s very much appreciated by what we’re seeing in the markets.”

Meanwhile, the news on the COVID-19 pandemic remained grim, with the US death toll hitting 58,233 on Tuesday, more than the toll from the Vietnam War.

While the US has the highest death toll from the virus in the world, Italy has the second highest death toll, with another 382 deaths on Tuesday, the highest since Saturday, to bring the total to 27,359.

Tuesday, 28 April 2020

Stocks shrug off oil plunge, retest of low still plausible

Stocks rose on Monday.

The S&P 500 rose 1.5 percent, the STOXX Europe 600 rose 1.8 percent and the Nikkei 225 surged 2.7 percent.

However, oil prices plunged. West Texas Intermediate crude fell 24.6 percent and Brent fell 6.8 percent.

Stock markets were able to shrug off the oil price declines as investors focused on plans to reopen economies.

“Country reopenings could anchor short-term sentiment provided the COVID-19 curve remains on a flattening tangent,” said Stephen Innes Chief Global Markets Strategist at AxiCorp.

However, some analysts think the markets may be getting ahead of themselves.

“We've got this epic battle between monetary and fiscal policy on one side, and weak economic earnings, earnings data on the other,” Tony Dwyer, managing director and chief market strategist at Canaccord Genuity.

“Having a very, very flat yield curve is telling you that the economy is going to be very slow coming out of the recession and that you want to maybe just kind of wait for some of the overbought condition that was created on this relief rally to work itself out,” he said

Indeed, Jeffrey Gundlach, CEO of DoubleLine, told CNBC on Monday that a retest of the March low is “very plausible”.

“I think we’d take out the low,” he added.

Monday, 27 April 2020

Stocks fall as global economy faces steepest contraction on record

The S&P 500 fell 1.3 percent last week, ending a two-week winning streak.

Stocks saw big declines early last week amid plunging oil prices but recovered partially in the second half of the week on hopes that the US and other economies will be reopening in the near future as tests for COVID-19 become more widely available and drugs are developed to treat the disease.

“Any sentiment around a therapy is really moving markets because it shapes expectations for a return to normalcy which would be needed to get an economic recovery started,” said Shawn Cruz, manager of trader strategy at TD Ameritrade.

However, that sentiment suffered a setback on Thursday after Gilead Science’s remdesivir reportedly failed a trial.

Meanwhile, others are warning that a vaccine could take some time to become available.

“We haven’t got a hugely good track record with vaccines for this particular virus, coronavirus, the family of viruses,” said Professor Gina Radford, former deputy chief medical officer for England. “I think those who are very used to the process of developing vaccines are saying they are not anticipating it being available until well into next year.”

That would be problematic for a global economy that is widely expected to suffer its steepest contraction on record this year.

“We are likely to see a deeper contraction in 2020 than during the global financial crisis,” said Janet Henry, global chief economist at HSBC.

“The global economy is collapsing at a pace not seen since World War Two,” said Michael Hanson, senior global economist at JPMorgan. “Staggered re-openings of economies until a vaccine is widely available imply more of a U- rather than a V-shaped recovery for the global economy.”

Still, others think that the positive response of policy-makers to the COVID-19 pandemic may be enough to turn markets around.

“On March 23, we made a low exactly on the same day that the Federal Reserve introduced what I call ‘QE4ever.’ The Fed announced that they were going to purchase bonds for the foreseeable future,” Yardeni Research president Edward Yardeni told CNBC on Friday.

Having lowered his year-end target for the S&P 500 to 2,900 early last month, Yardeni is now looking forward to a rebound.

“Sometime next year, maybe by the end of next year, we’ll be moving toward 3,500,” he said.

Saturday, 25 April 2020

US stocks rise even as economy faces large pullback in capital spending

Markets were mixed on Friday.

The S&P 500 rose 1.4 percent but the STOXX Europe 600 fell 1.1 percent and the Nikkei 225 fell 0.9 percent.

US stocks rose despite a report on Friday showing that US orders for durable goods tumbled 14.4 percent in March.

Lydia Boussour, senior US economist at Oxford Economics, wrote that the impact of the COVID-19 pandemic “will translate into some of the largest pullbacks in capital spending of all time”.

In Europe, BofA said that it expected stocks to gain a further 20 percent as “the root cause of the economic slump - the spread of Covid-19 - is fading”.

However, Hannah Anderson, global market strategist at JPMorgan Asset Management, warned that progress in combating the virus is “not the same as returning the economy to the place it was last fall” and said “investors should expect more volatility across all asset classes”.

Similarly, Hugh Young, managing director for the Asia Pacific region at Aberdeen Standard Investments, warned that markets “have not accurately priced in the risks” and that “the economic consequences are actually huge of what’s going on”.

Friday, 24 April 2020

Markets rise, economies shrink

Markets were mostly higher on Thursday.

The S&P 500 rose less than 0.1 percent while the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 jumped 1.5 percent.

Oil prices surged. West Texas Intermediate crude rose 19.7 percent and Brent rose 4.7 percent.

However, economic data released on Thursday were gloomy.

IHS Markit’s flash US composite output index plunged to 27.4 in April, the lowest since the series began in late 2009, from 40.9 in March.

IHS Markit’s flash eurozone composite PMI sank to 13.5 in April, its lowest reading since the survey began in mid-1998, from 29.7 in March. IHS Markit said the PMI was consistent with the bloc’s economy contracting 7.5 percent this quarter.

“The rather muted reaction relative to the amplitude of the misses proves the lack of surprise for markets, which are almost immune to data at the moment,” said Olivier Konzeoue at Saxo Markets.

However, as economies contract, Andrea Cicione, head of strategy at TS Lombard, said that the level of bad loans at banks is “worrying”.

“What the market is failing to appreciate is the size of the macroeconomic shock,” said Cicione.

Thursday, 23 April 2020

Markets rise but negative forces “remain very much intact”

Markets mostly rose on Wednesday.

The S&P 500 jumped 2.3 percent, the STOXX Europe 600 rose 1.8 percent and the Shanghai Composite rose 0.6 percent.

Oil rebounded. Brent crude rose 5.4 percent and West Texas Intermediate surged 19.1 percent.

“By no means does this suggest that a price bottom has been placed since the supply/demand forces that drove negative crude pricing this week remain very much intact,” said Jim Ritterbusch, president of Ritterbusch and Associates.

That could mean further pressure on stocks as well.

“The oil reality check has triggered a reassessment across risk assets,” wrote Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, in a note.

Indeed, Citi’s global equity strategy team says the bear market in stocks is not done.

“All bear markets include false rallies, often associated with supportive monetary policy. But markets only find a sustainable base when there are signs that cheap money is feeding through into the real economy, rather than temporarily supporting asset prices,” said the team led by Robert Buckland.

Wednesday, 22 April 2020

Markets fall from impact of COVID-19, winter could prove “even more difficult”

Markets fell sharply on Tuesday.

The S&P 500 tumbled 3.1 percent, the STOXX Europe 600 plunged 3.4 percent and the Nikkei 225 fell 2.0 percent.

Oil prices plunged. West Texas Intermediate crude for June delivery fell 43.4 percent while Brent fell 24.4 percent.

Ben Powell, chief investment strategist for Asia Pacific at BlackRock Investment Institute, said that “oil will continue to be very challenged” because of “the simple inability for a global energy sector to respond in real time to such an unbelievable collapse in demand in such short order” resulting from economic shutdowns in response to the COVID-19 pandemic.

Meanwhile, deaths in the US from COVID-19 topped 45,000 on Tuesday but hopes for a slowdown in the spread has moved states like Georgia and South Carolina to ease restrictions.

Unfortunately, the slowdown may be temporary. “There’s a possibility that the assault of the virus on our nation next winter will actually be even more difficult than the one we just went through,” warned CDC Director Robert Redfield.

Tuesday, 21 April 2020

Oil plunges, stocks look like “incredible bargains”

Markets were mixed on Monday.

The S&P 500 fell 1.8 percent and the Nikkei 225 fell 1.2 percent but the STOXX Europe 600 rose 0.7 percent.

Oil prices plunged. West Texas Intermediate crude for May delivery fell to negative US$37.63 a barrel.

Louise Dickson, oil markets analyst at Rystad Energy, explained that “midstream players are now paying ‘buyers’ to take oil volumes away as the physical storage limit will be reached”.

Brent crude fell 8.9 percent.

Meanwhile, US stock market investors are bracing for the worst quarter for earnings since the 2008 financial crisis. Results for the first quarter are on track to decline 14.5 percent from a year ago, according to John Butters, senior earnings analyst at FactSet, and analysts expect a 28.7 percent decline in the second quarter.

Still, some analysts think stocks are becoming bargains.

John Cunnison, chief investment officer at Baker Boyer, said “if we look back at this moment in three years, it probably will look like a fairly attractive place to buy”.

Similarly, Mark Mobius, co-founder of Mobius Capital Partners, said that he is “very optimistic” markets will bounce back after creating “incredible bargains”, although he also warned that stocks could retest the March lows.

Howard Marks, co-founder of Oaktree Capital Management, also warned of further declines in the market. “We're only down 15% from the all-time high of Feb. 19,” he said Monday on CNBC. But “it seems to me the world is more than 15% screwed up”.

Monday, 20 April 2020

Stocks rally on hopes for economy to re-open

The S&P 500 rose 3 percent last week amid suggestions by US President Donald Trump and others that the country has “passed the peak” of the outbreak and the economy could start to re-open soon.

Still, the US COVID-19 death toll hit 40,461 on Sunday as confirmed cases reached 755,533.

Researchers at Harvard said that testing for COVID-19 in the US, currently at 150,00 per day, must go up to at least 500,000 people per day if the country wants the economy to open back up.

"If we can't be doing at least 500,000 tests a day by May 1, it is hard to see any way we can remain open," the researchers said.

Meanwhile, Italy, the country with the second highest death toll in the world after the US, reported another 433 deaths on Sunday, the lowest in a week, and the number of new cases slowed to 3,047 from a previous 3,491. The total death toll is now 23,660 while the total number of confirmed cases is 178,972.

Saturday, 18 April 2020

Markets rise on hope of COVID-19 treatment

Markets rose on Friday.

The S&P 500 jumped 2.7 percent, the STOXX Europe 600 rose 2.6 percent and the Nikkei 225 surged 3.1 percent.

Investors were cheered by promising results for the drug remdesivir in treating COVID-19.

Jasper Lawler, head of research at London Capital Group, said though that the trial on the drug was small and there was no control group “so there’s plenty of room for error”.

Investors shrugged off a report showing that China's GDP shrank 6.8 percent in the first quarter from a year ago.

“We expect a significant sequential recovery in Q2 as economic life returns to normal,” economists at Oxford Economics wrote.

Friday, 17 April 2020

Western governments were “staggeringly slow to act” on COVID-19

Markets mostly rose on Thursday, the S&P 500 rising 0.4 percent and the STOXX Europe 600 rising 0.6 percent.

While investors were encouraged by talks of reopening economies, Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC on Thursday that he is “still worried about greater risk to the downside”.

“It’s been such a dramatic experience that it’s going to alter household and business behavior,” he said. “The end result is going to be a much slower pace of growth which means lower earnings.”

James Griffiths at CNN said that Western governments have themselves to blame for failing to take the necessary actions to stem the COVID-19 outbreak.

For all the blame laid at China's door for its failure to act early in the pandemic, officials there did not know what they were dealing with.

By comparison, officials in Europe and the US knew exactly what they were facing once the outbreak reached their borders, but were often slow to react, wasting time as the virus spread through Asia and ignoring lessons learned by other countries.

Much of what we know about the coronavirus -- that it is highly contagious and spreads from person to person, that it has a relatively high mortality rate, particularly for certain populations, and that one of the best ways to contain it is via enforced social distancing -- was established by early February.

Despite this, Western governments, particularly the US and UK, were staggeringly slow to act.

In the US, nationwide social distancing guidelines were not put in place until March 16 -- the country's first case was recorded on January 15, and the first signs of "community spread" detected in late February. The UK too dragged its feet on taking concerted action, only instituting lockdowns and stay-at-home orders in late March, two months after its first case was recorded.

Thursday, 16 April 2020

Markets fall as global economy faces “worst recession since the Great Depression”

Markets fell on Wednesday. The S&P 500 fell 2.2 percent and the STOXX Europe 600 tumbled 3.2 percent.

Earlier in Asia, the Nikkei 225 fell 0.5 percent and the Shanghai Composite fell 0.6 percent.

US economic data released on Wednesday indicated a sharp contraction in the economy. Retail sales fell 8.7 percent in March and industrial production fell 5.4 percent.

Lydia Boussour, senior US economist at Oxford Economics, said this is “just the beginning of the consumer pullback” while Jason Thomas, chief economist at AssetMark, said that “April is much worse”.

On Tuesday, the International Monetary Fund had said it is “very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago”.

The US COVID-19 death toll surpassed 30,000 on Wednesday but President Donald Trump said that the country has “passed the peak” of the outbreak.

“While we must remain vigilant, it is clear that our aggressive strategy is working,” Trump said at a White House news briefing on Wednesday.

Wednesday, 15 April 2020

Stocks jump but pandemic may depress GDP “for more than 3 years”

Markets rose on Tuesday.

The S&P 500 surged 3.1 percent, the STOXX Europe 600 rose 0.6 percent and the Nikkei 225 jumped 3.1 percent.

Investors were encouraged by signs that some countries were relaxing restrictions on activity. For example, Spain has allowed businesses like construction and manufacturing to resume while Austria is reopening small shops. In the US, ten states are coordinating plans to reopen businesses.

Oil prices fell though. West Texas Intermediate crude plunged 10.3 percent and Brent fell 6.7 percent.

Robbie Fraser, senior commodity analyst at Schneider Electric, said that “the math remains firmly in favor of the bears”, pointing out that “global demand is suffering 20-30% losses, virtually guaranteeing a flood of crude and products heading into storage in the short and medium-term”.

Indeed, some analysts are warning that the stock market rally is predicated on the wrong assumptions.

“Most of the analysts are asking — ‘When will the economies return back to work?’ — which we believe is the wrong question,” said Boris Schlossberg, managing director of BK Asset Management, in a Tuesday note. “The much more relevant question is — ‘When will aggregate demand recover to pre-virus levels?’ That is a much more difficult dilemma to assess given the massive damage done to consumer balance sheets.”

Carl Weinberg, chief economist at High Frequency Economics, suggested in a note on Monday that even after the economy starts to recover, “the level of GDP will still be lower than where it started for more than three years”.

Tuesday, 14 April 2020

Markets fall but downside risk reduced by “unprecedented policy support”

Markets fell on Monday.

The S&P 500 fell 1.0 percent, the Nikkei 225 plunged 2.3 percent and the Shanghai Composite fell 0.5 percent. European markets were closed for holidays.

Nigam Arora wrote on Monday that the recent stock market rally had been the result of a short-squeeze and is likely to end this week.

“There should be downward pressure on the stock market after the short-squeeze ends, unless there are new triggers to the upside such as medical developments against the coronavirus, pleasant surprises in what companies say about the future in their earnings reports and conference calls, more monetary stimulus from the Fed and more fiscal stimulus from the government,” he wrote.

Still, some analysts think the market has bottomed, a short-term pullback notwithstanding.

Morgan Stanley analysts led by chief US equity strategist Michael Wilson wrote on Monday that support by the Federal Reserve should help drive the stock market up, suggesting that “investors should have no doubt about the Fed’s resolve to do whatever it takes to make sure the recession does not turn into a depression”.

Similarly, Goldman Sachs strategists led by David Kostin wrote on Monday: “The combination of unprecedented policy support and a flattening viral curve have dramatically reduced downside risk for the U.S. economy and financial markets and lifted the S&P 500 out of bear market territory.”

And while Canaccord Genuity chief market strategist Tony Dwyer warned of an imminent pullback in stocks, he said: “Our plan is to go back on offense as the market pulls back toward the March 23 low.”

Monday, 13 April 2020

OPEC, Russia agree to cut oil output amid COVID-19 pandemic

OPEC and Russia agreed on Sunday to a cut in oil production.

The agreement was to reduce output by 9.7 million barrels per day for May and June following pressure from US President Donald Trump to arrest the oil price decline.

Global oil demand is estimated to have fallen by a third as measures to slow the spread of the COVID-19 pandemic drove down demand for fuel.

On the pandemic front, the number of COVID-19 cases in the US passed 554,000 on Sunday while the death toll hit 21,994, now the highest among all countries in the world after passing Italy's on Saturday.

As for Italy, the encouraging trend of recent days continued on Sunday. Deaths from COVID-19 rose by 431, down from 619 the day before and the lowest since 19 March. The number of new cases slowed to 4,092 from a previous 4,694.

Saturday, 11 April 2020

COVID-19 peak seen, global death toll hits 100,000

Markets in Asia were mixed on Friday, with the Shanghai Composite falling 1.0 percent but the Nikkei 225 rising 0.8 percent.

Most major markets in the rest of the world were closed for holidays.

The S&P 500 surged 12.1 percent earlier in the week, its biggest weekly gain since 1974.

The rally in stocks came amid signs that the COVID-19 outbreak in the US may be approaching a peak. From CNN:

The latest version of an influential model tracking the coronavirus pandemic estimates the US will see peak daily death numbers on Friday instead of Sunday.

The peak use of resources -- like hospital beds and ventilators -- will be on or around Saturday as suggested earlier this week, according to the Institute for Health Metrics and Evaluation at the University of Washington in Seattle.

Meanwhile, the number of deaths linked to COVID-19 reached 100,000 on Friday as the tally of cases passed 1.6 million, according to a Reuters tally.

Friday, 10 April 2020

Stocks rise on Fed move but March low could still be retested

Markets rose on Thursday.

The S&P 500 rose 1.5 percent, the STOXX Europe 600 jumped 1.6 percent and the Shanghai Composite rose 0.4 percent.

However, oil prices plunged. West Texas Intermediate crude tumbled 9.3 percent and Brent fell 4.1 percent.

Helping to prop up stocks prices on Thursday was an announcement by the Federal Reserve of its US$2.3 trillion programme to bolster local governments and businesses.

That comes as a report on Thursday showed that 6.6 million Americans filed for unemployment last week and another showed that the preliminary reading of the University of Michigan's consumer sentiment index fell to 71 in early April from 89.1 the previous month, the biggest ever one-month decline.

“The Fed will buy riskier debt and that should keep this V-shaped rebound going a little longer,” said Edward Moya, senior market analyst at OANDA New York.

However, others remain cautious.

“There has to be a capitulation where everyone throws their hands in the air and sells it all, gets rid of the hopes and dreams they had for the stocks in their portfolio,” said Kim Forrest, founder and chief investment officer at Bokeh Capital Management.

Similarly, Mark Hulbert at MarketWatch noted that instead of the pessimism and despair usually seen at bear-market bottoms, the last couple of weeks have been marked by an “eagerness to declare that the worst is now behind us”.

“We should expect a retest of the market’s March low,” Hulbert concluded.

Thursday, 9 April 2020

Markets mixed as world economy faces “deepest recession of our lives”

Markets were mixed on Wednesday.

The S&P 500 surged 3.4 percent and the Nikkei 225 jumped 2.1 percent but the STOXX Europe 600 was flat and the Shanghai Composite fell 0.2 percent.

Oil prices surged, with West Texas Intermediate crude rising 6.2 percent.

“This week, we’re starting to see folks shift to being more hopeful that maybe the social distancing measures can be relieved sooner rather than later,” said Michael Arone, chief investment strategist at State Street Global Advisors.

Still, the news on COVID-19 remain grim, with daily deaths in New York and New Jersey from the disease hitting records on Wednesday.

Meanwhile, measures imposed to slow the spread of the pandemic are pushing the world economy into a recession.

“During the first two quarters of the year, the economies of Western countries are collapsing,” said Philippe Waechter, economist at Ostrum Asset Management.

WTO chief Roberto Azevedo warned the world is facing the “deepest economic recession or downturn of our lives”.

Wednesday, 8 April 2020

Stocks reverse gains as “one more down leg” seen

Markets were mixed on Tuesday.

The Nikkei 225 surged 2.0 percent and the STOXX Europe 600 jumped 1.9 percent but the S&P 500 gave up early gains to close 0.2 percent lower.

Oil prices fell after the US Energy Information Administration lowered its US and global benchmark price forecasts. West Texas Intermediate crude plunged 9.4 percent and Brent fell 3.6 percent.

Investors continued to take some comfort from a slowing trend in the rise of COVID-19 infections. Italy reported the lowest number of new coronavirus infections in nearly three weeks and China reported no new deaths, though deaths in Spain rose after declining for four consecutive days and New York reported its highest daily death toll yet.

Adam Phillips, director of portfolio strategy at EP Wealth Advisors, warned that “the virus is not under control yet” while Mizuho’s US Chief Economist Steven Ricchiuto suggested that “the Street appears to be betting on at least one more down leg to this correction before a sustained bounce begins”.

Tuesday, 7 April 2020

Stocks surge as COVID-19 shows signs of peak but economy at risk of “vicious spiral”

Markets rose sharply on Monday.

The S&P 500 soared 7.0 percent, the STOXX Europe 600 jumped 3.7 percent and the Nikkei 225 surged 4.2 percent.

Markets rose amid signs that the spread of COVID-19 may be slowing.

“Signs that coronavirus may be peaking in parts of mainland Europe have given some hope that the economic hit will be short-lived,” said Russ Mould, investment director at AJ Bell.

US Vice President Mike Pence said “we’re starting to see glimmers of progress”.

However, oil prices plunged amid rising tensions between the world’s biggest oil producers over the weekend. West Texas Intermediate crude fell 8 percent and Brent fell 3.1 percent.

Some analysts see a bullish case for stocks. Bob Doll, chief equity strategist and senior portfolio manager at Nuveen, suggested that 2,192 was the bottom for the S&P 500, while Mike Wilson, Morgan Stanley’s chief equity strategist, said he does not expect a full retest of that low.

However, Peter Boockvar, chief investment officer at Bleakley Advisory Group, said that improvement in the rate of COVID-19 infections “does not signal the all clear” and is not confident that the botton has been hit.

Indeed, Scott Minerd, global chief investment officer at Guggenheim Partners, said that the S&P 500 could plunge to 1,500, while Mislav Matejka, head of global equity strategy at JP Morgan, warned of a possible “vicious spiral” in the economy that could result in a 10 percent decline in US real GDP.

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.