News / Analysis
Finance Update – UK Caught Between a Bull & a Hard PandaMay 19, 2020
Australia’s central bank-meet minutes overnight reveal concern that fiscal and monetary aid will hardly blunt an expected 6% drop in GDP over the year and other repercussions of the Corona crisis.
Elsewhere, following Moderna’s successful trial of an anti-COVID drug, Global equities pulled Asia up overnight, Australia’s S&P adding 2.02% followed by Japan & Hong Kong.
Chinese equities added just over a half percent after Nasdaq inc. announced new restrictions on IPOs. Disputably targeting small to medium-sized Chinese firms whose transparency leaves much to be desired.
In response, China is reportedly urging local firms to list in the UK, says Reuters. The Shanghai-London Stock Connect scheme enables Chinese-listed companies to list also in the UK, also enabling Chinese investors to access UK companies.
On the other hand, UK trade officials said that FTA talks with the US had ended on a positive note Friday and are scheduled to restart in mid-June.
Adding to the vibe, March unemployment came in this morning at 3.9% – a 1-tick drop, with average earnings excluding bonuses down to 2.7% – a tenth percent better than expected.
Meanwhile, voices are getting louder in the Bank of England to adopt negative interest rates, now that Mark Carney can no longer prevent this. European indices soared yesterday led by the DAX’s 5.67% rise.
A host of Fed officials took to the waves yesterday, Chairman Powell telling the Senate that the central bank intends to keep interest levels low.
Atlanta’s Raphael Bostic said Q2 would be tougher for the economy “in macro terms.”
Meanwhile, National Economic Council Director Kudlow told reporters to look for “glimmers of hope” in housing and petrol.
The DOW added a promising 3.85% yesterday.
Walmart is set to announce quarterly earnings before the NY opening bell. Expect $1.12 earnings per share (-$1.38 QoQ), on expected revenues of about $130bn (-$10 billion QoQ).
Chinese internet giant Baidu reported revenues down 7% YoY in Q1 yesterday, as active users increased by 28% and providing upwind to shares that rose 9.7%.
Other Chinese listed companies like Alibaba and Xiaomi with a secondary listing in Hong Kong will no be able to be represented in the Hang Seng index. Which could drive a total of up to $3.7bn into their market cap, according to Morgan Stanley.
GE shares yesterday soared 13.9% as airline travel returns to public consciousness. And, to return to the top of this issue, US pharma firm Moderna, fresh on the heels of its COVID vaccine trial success, announced this morning a public offering of 17½ million shares worth. An estimated $1.2bn, giving underwriters a 30-day option to purchase existing common stock.
|09:00 AM GMT||EU & Germany||Economic Sentiment & construction output (EU only)|
|12:30 PM GMT||US||Building permits & housing starts. Powell continues testimony at 2.|
|08:30 PM GMT||OIL||API Weekly Crude Inventories|
|01:30 AM GMT (+1)||China||PBoC Interest Rates|
|06:00 AM GMT (+1)||UK||CPIs, PPIs, and Retail prices|