News / Analysis
Finance Update – US Green Energy Gets Government Rent TabMay 18, 2020
Asian markets this morning are in the green across the board, led by Tel Aviv’s 3.34% rise on Friday’s close followed by Saudi Arabia’s Tadawul, with a 1.6% increase, Sunday.
The Hang Seng brings up the rear with 0.3% after house prices in China added another 5.1% in April.
The optimism is based on the world’s gradual emergence from lockdown and a recovery in US markets. China’s commerce minister this morning said the government would boost consumption to help contend with the global slowdown – this as the nation’s export figures rose for the 1st time this year.
The minister also announced he was in talks with his Australian counterpart in an attempt to relieve tensions.
The yen continues sideways after a better-than-expected preliminary 3.4% annualized contraction for Q1 GDP. Unfortunately, this signals the nation’s slump into a recession and what Reuters calls its worst since the end of WW-2.
European indexes closed last week marginally better, the FTSE gaining a full percent and the CAC – a tenth.
ECB Chief Economist Philip Lane told reporters yesterday that the EU’s economy would not recover until sometime next year.
The Euro on Friday peaked briefly after German preliminary GDP for Q1 came in at -1.9% YoY – worse than the expected 1.6% contraction.
The EU’s total figure shows a better-than-expected 3.8 % contraction – slightly better than the previous reading, but still its worst performance in 25 years.
Italy’s total trade surplus decreased to 0.6 bn Euros in March with Industrial sales contracting by 26% MoM.
The pound lost 150 pips on Friday after the UK refused to extend the Brexit negotiations deadline, and BoE Chief economist Andrew Haldane said the bank was considering negative interest rates.
US indexes added 0.8% (NASDAQ) to 0.25% (DOW) upon closing Friday, after continuing jobless claims added only a half million claims in the last week of April, compared to 2.98 mn initial claims for the same week.
Import and export prices in April contracted by about 7% YoY, retail sales contracted by 16.4% MoM and industrial production by 11.2% – a tad better than expected.
Commenting on the worst economic performance since the Great Depression, Fed head Jerome Powell on Sunday said the economy would need about 3-6 additional months of government aid to recover. He told CBS that he expected unemployment to peak at 25% next month and GDP to contract by 30% in Q2.
Meanwhile, major companies are pulling orders out of China, such as TSMC’s cancelling of Huawei orders for integrated circuits.
Washington officials are preparing tax breaks and subsidies to companies moving operations out of China.
Alternative energy initiatives in the US, however, are being served inordinate retroactive rental bills for solar and wind plants built on federal land, a bill that oil companies are not receiving.
As Bitcoin prepares to once again tackle the 10K mark, Gold continues north, Monday finding it at 1769 per troy ounce, while crude oil continues to recover above the $30 mark after the Baker Hughes corporation displayed yet another 35-rig contraction to 258 active drills in the US. A full $1 increase overnight was ascribed to output cuts and a gradual recovery in demand.
Uber was down a percent Friday after Grubhub rejected its merger offer. Apple this morning announced 25 stores reopening in the US and 100 worldwide.
Disney announced it was reopening one of its shopping centres in Florida. And, after retiring as Alibaba exec. Chairman, Jack Ma is now leaving SoftBank, which is in the midst of a $5 bn buyback.
|02:00 PM GMT||US||Housing Market Index|
|10:45 PM GMT||NZD||PPIs|
|01:30 AM GMT (+1)||Australia||RBA meeting minutes|
|04:30 AM GMT (+1)||Japan||Industrial Production|
|06:00 AM GMT (+1)||UK||Unemployment, average earnings & claimant count change|