News / Analysis
Finance Update – Oil glut threat adjourned, for now…May 21, 2020
Asian markets were mixed this morning, the Nikkei up by 0.02%, while the Hang Seng lost 0.06%.
Japan’s merchandise trade deficit expanded in April to ¥-996.3 bn., exports falling the most since 2009 as Chinese demand for chemicals and car parts flatlined.
Australia’s Manufacturing PMI in May is expected to have contracted to 42.8 while both services and composite PMIs improved by several points, though still leaving them in the contractionary 20s.
European markets ended in the green yesterday, while the Euro added 50 pips on the German/French agreement on a ½ trillion Euro aid fund, before losing half those gains overnight.
Consumer inflation throughout the Eurozone in April fell to 0.3%, but consumer confidence improved somewhat to -18.8 in May, providing the common currency with additional backwind.
European-British verbal sparing continued yesterday with Euro-negotiator Barnier warning his British counterpart that his “tone” could harm negotiations.
US-Sino tensions ratcheted up a notch when Trump yesterday accused the Chinese government of being behind a COVID-based smear campaign against the US and Europe.
US markets closed up yesterday, the Nasdaq adding 2%.
Mortgage applications in May contracted by 2.6%.
The dollar remained unperturbed as the FOMC minutes last night revealed a gloomy Q2 of plummeting GDP and soaring unemployment.
Dallas’ Fed head Kaplan warned that employment would not recover unless testing improved. Deflation struck Canada in April, the YoY CPI declining by 0.2%.
WTI continues to recover, adding nearly a full dollar overnight after the EIA confirmed a 4.98-million-barrel drawdown.
Gold managed to recover half of its Monday losses over the week before losing most of those gains yesterday.
Amazon shares yesterday hit an all-time high of $2499 after French warehouses opened and the announced purchase of AMC movie theatre houses. The company is currently exploring the online gaming environment, having recently released its high-budget Crucible video game yesterday.
Nvidia shares are up 1.9% ahead of today’s earnings report, earnings expected to drop 20 cents QoQ to $1.69; expect a $0.1bn fall in revenues to an even 3.
Alibaba reports tomorrow, with expectations for a dramatic drop in earnings – from 2.61 last quarter to 88 cents in Q1 on revenues expected to drop by $8 bn to 15.
Further hurting the company is the US senate’s recent legislation that requires US-listed companies to certify they are not owned by a foreign company.
Lufthansa shares were unimpressed by a promise by the German government yesterday to sign a €9 billion rescue bill.
|7:15-8:30 AM GMT||EU, France, Germany & UK||Manufacturing, Service & Composite PMIs|
|12:30 PM GMT||US||Jobless claims. PMIs at 1:45 & home sales at 2. Powell speaks at 6:30|
|11:30 PM GMT||Japan||CPIs. Interest rates & policy overnight|
|06:00 AM GMT (+1)||UK||Retail sales|