News / Analysis
Finance Update – Sunrise?March 31, 2020
Mainland China is seeing an increase in imported Corona cases, bringing the number up to 771. Still, this morning we find China’s PMIs surprising dramatically to the upside – non-manufacturing doubling to 52.3 from its hysterically contractionary 29.6 in February, and manufacturing also in expansion at 52, from 35.7 the previous month.
However, a locked-down foreign market is expected to lower the final figure to about 45. As a result, the Yuan this morning is back to a pre-stimulus 0.14106 as markets around the world march back into positive territory.
At 0.84%, the Shenzhen is leading, as the Nikkei drops to the same tune. Japan last night presented excellent data – a 0.2% increase in retail sales (MoM) and double that for industrial production (MoM). This is less than last month, and the yearly figure is still in a 0.4% contraction.
PM Shinzo Abe is expected to announce a large stimulus package aimed at wiping out all benefits from last year’s supportive policies. Housing starts this morning fell by 12.3%, better than the 15 expected. New Zealand’s confidence measures took a plunge in March, and yet the NZD has managed to tag on a third percent over the session.
Reuters reports that Australia is facing a ratings downgrade as the government increases spending to help support a recession-facing economy. PM Morrison has pledged $320 bn, most of which will have to be borrowed.
European data, though dismal yesterday, showed some bright sings – EU service, industrial and economic sentiments surprising greenways and a 2.2K increase in UK mortgage approvals. That nation’s consumer credit tally fell to £0.9 bn in February as consumer confidence fell to -9, this morning’s data shows a 1.8% increase in investments for last year’s Q4; and Germany’s harmonized CPI fell to 1.3%. Indexes throughout the region were generally up, led by France’s AEX, at 2.38%
US equities continue to bound up, the Nasdaq yesterday closing with a 3.62% increase.
The DOW added 690 points on healthcare and hi-tech – primarily Johnson & Johnson, which announced a possible Corona remedy, and Microsoft, which has seen a 70% increase in Skype usage.
The US government is preparing a $25bn rescue package for the US airline industry but has set stern requirements forbidding layoffs and guarantee compensation. The president has recommended that gun stress be defined as “critical businesses” as Americans clamour to prepare for the Armageddon.
Data-wise, economists at the St. Louis Fed expect a nationwide loss of 47 million jobs as the Corona crisis plays out. And pending home sales in February increased by 9.4% YoY. Upcoming this week – nationwide PMIs, which are expected to drop into contractionary territory.
Oil yesterday broke its upper range border to peak at 21.70 overnight after US President Trump and Russian President Putin agreed to meet in order to resolve the oil-price problem. As Saudi Arabia locks down its pilgrimage sites, the Tadawul index lost 24%, oil-price-stricken Aramco weighing it down with a 15% loss.
J&J and Moderna are amongst companies being contracted by the US government to produce large quantities of anti-Corona vaccines, even though none have yet been developed. The billion-dollar deal pushed shares up 8% yesterday.
Concurrently, Ford and GE have announced that they would be manufacturing 30,000 ventilators per month. And Boeing has been awarded a $1.5bn dollar contract to manufacture aircraft for the US Navy, this despite major deficiencies found in the Pegasus fuel system by the Air Force.
Meanwhile, at 19 Amazon warehouses, the virus has been spreading as Staten Island employees walk out while others around the world protest. And Visa yesterday reported a sharp decline in domestic spending in March – 19% in cross-border volume.
|07:00 AM GMT||France||CPIs|
|07:55 AM GMT||Germany||Unemployment|
|09:00 AM GMT||EU CPIs|
|12:30 PM GMT||Canada||GDP|
|01:00 PM GMT||US||Case Shiller Home Price Index. Consumer Confidence at 2|
|08:30 PM GMT||OIL||API Crude Oil Stocks|
|11:00 PM GMT||Australia||CB Manufacturing PMI. Building permits at 0:30 (+1)|
|11:50 PM GMT||Japan||Mfg & Non-mfg outlook & indexes|
|01:45 AM GMT (+1)||China||Caixin Manufacturing PMI|