News / Analysis
Finance Update – Earnings AheadApril 13, 2020
The only man in the street, Asian markets traded down Monday.
With Easter weekend interrupting the mayhem, last week closed with action mainly in Asian markets, Japan’s Producer Price Index for March contracting by a ½ percent on Thursday night and China’s by 1.5% the following morning.
Car-sales in March nearly quadrupled MoM, as the economy recovers from Corona-symptoms, but CPIs for China were down a percent to 4.3% YoY.
Both major indices closed the week with a loss – 1% in Shanghai and 1.6% in Shenzhen. Otherwise, both the Hang Seng and Nikkei managed to tag on 1.4 and 0.8%, respectively.
Australia’s S&P ended up 3.46% – possibly the second-best performer amongst the majors.
On Sunday, the World Bank announced that South Asian countries are expected to face their worst economic decline in over 4 decades – down to the 1-2% region from over 6, as projected before the COVID-Crisis.
At 3.93%, the first place goes to London’s FTSE, which ended the week on a very positive note, despite the human toll – 10,000 dead so far. The pound was up a half percent, possibly on Boris Johnson’s release from Corona-ER.
Industrial production for February in Britain managed to lose only 2.8% (MoM) – the same as the previous month, manufacturing actually increased from 0.2 to 0.5% (MoM), while GDP contracted by 0.1% and the nation’s trade deficit increased to £2.793 bn.
Germany’s exports increased by 1.3%, pushing February’s trade surplus to €21.6 B; and France managed to push out its February industrial output on Friday up 0.9%.
US index futures indices did not have a good Easter. Traded primarily in Asia, they received none of the lift from easy money in the US to prop them up and traded generally within a lower range – the Dow down about 400 points. Indices closed for the holiday with a 1.22% rise for the Dow, 1.45 for the Nasdaq.
Thursday saw better-than-expected results for PPIs and continuing jobless claims, which simply didn’t quite hit the 8-million mark as expected (up from the previous week’s 3.06).
The initial count was in the red with 6.6m new claimants, while the Michigan Consumer Sentiment Index for April shows a preliminary drop to 71.
In Congress, Republicans are blocking a half-trillion-dollar relief package aimed at small businesses, hospitals, and local governments, as the US death toll crosses the 20K mark (and Italy’s dire numbers).
Meanwhile, the New York Times reports a Federal estimate that, if restrictions are lifted too soon, an additional 200,000 deaths could result. Friday’s March CPIs were all in the red, and in Canada, the March unemployment rate was up 2% to 7.8%.
After completing a week-long head and shoulders pattern, Bitcoin is back in the upper 6-thousands as traders take profits ahead of Easter. And, perhaps in anticipation of Q1 earnings reports, set to start pouring in this week, gold on Friday added $60 on the ounce to once again perch above the 1740 mark.
Oil, with no more storage place available, has yet to react in a meaningful manner to the meagre just under 10-million daily barrel production cut finalized between OPEC+ members. WTI tagged on a meagre $1 and some on Sunday, then relaxed into a lethargic decline.
Mexico agreed to join the party with a 100kbdp, the US with 33Kbpd. Meanwhile, the Baker Hughes oil rig count indicates another 68 wells closing – the number of operative oil rigs in the US now at 504 – 40% down year-on-year.
And in the COVID-coping corporate world, JPMorgan Chase is firming up borrowing requirements to mitigate lending risk from job loss, wage decay, or property depreciation. The bank will be announcing its 1st Quarter earnings on Tuesday, along with Johnson & Johnson, Wells Fargo, and others. Bank of America, Citigroup, and Goldman Sachs report on Wednesday, and Rite Aid, BlackRock and Bank of New York on Thursday.
Meanwhile, Seeking Alpha reports that CEOs and CFOs in major corporations are buying their own stocks “in record numbers.” Disney on Saturday took a break from Easter to announce it would furlough another 43 thousand employees (out of 77,000). And, Biotechnology giant Gilead Sciences on Friday announced a successful trial for its antiviral coronavirus remedy – Remdesivir
|01:30 AM GMT||Australia||Business Conditions (March)|
|12:30 PM GMT||US||Imports & Exports, followed by the Redbook Index at 12:55|
|08:30 PM GMT||OIL||API Report|
|00:30 AM GMT (+1)||Australia||Consumer Confidence|