Finance Update – Bullying the Little Guy

Asia

Asian equities this morning straddled the zero line as the Nikkei added a percent and the Hang Seng, 1.6%. Tailwind is being supplied by a returnThe benefit one receives on an investment. to pre-COVID conditions, quashed by concerns over a 2nd wave of the virus.

In a sign of the times, Disney’s Shanghai park reopened overnight after a 3-month shutdown. Direct Chinese investments in the US dropped to decade-long lows, reports Reuters, as bilateral tensions mount.

On the other hand, US companies claim $2.3bn in new investments in China, the report says.

Also, in rising tensions following Australia’s demand for an independent inquiry as to the Coronavirus’ origins, China is accusing that nation of dumping cereal exports and threatening 80% tariffs on the grain sector – worth about a billion Australian dollars.

Trade Minister Simon Birmingham told Sky News this morning that the government does not subsidize the sector and that the accusations are groundless.

Europe

The pound this morning continues to trend in its month-long 1.23-1.26 range, while the FTSE led European gains last week at 1.4%. UK consumer confidence, which was expected to improve to -15, fell instead to 33 in April’s preliminary reading; and the Halifax house price index fell by 0.6%.

Germany’s March trade surplusA trade balance that is positive as a result of income (exports on the national level) being greater... fell beyond expectations to €12.8 bn, while France’s deficitA trade balance that is negative as a result of cost (imports, on the national level) being greater ... narrowed to €3.34 bn.

Yesterday, EC President Ursula von der Leyen said the EU could sue Germany for its constitutional court’s decision against the ECB’s bond-buying programme.

Americas

Indexes closed up last week, the Russel 2000 gaining nearly 4% with the DOW far behind at 1.91%.

Friday’s Non-Farm Payrolls for April managed to exceed expectations, contracting by a mere 20 million jobs on the expected 22 – putting unemployment at 14.7%. Participation fell by 60% but earnings soared by 4.7%. Treasury secThe US Securities & Exchange Commission is the US regulator of financial markets..

Mnuchin told reporters yesterday that he expects the employment situation to be exacerbated before beginning to recover in Q3.

Canada faired much better with unemployment at 13% but participation falling to 59.8%.

Reuters also reports sees US pork exports to China quadrupling after President Trump ordered meat factories to stay open, to the cost of 5,000 additional Covid infections and at least 20 deaths.

Commodities

Another concern for 2nd wave Covid contagion is pushing oil down – the commodityA tangible good that can be and which has been “commoditized”, i.e. standardized by quality and ... now trending at 24.23 after losing a dollar over the week. Low prices are forcing Saudi Arabia to triple its VAT to 15% as of July.

After breaching the 10k level last week, Bitcoin lost 15% of its value yesterday in 30 minutes when mega-exchange Coinbase experienced outages on acute price volatilityThe measure of fluctuation in an asset’s value from the mean. Volatility can be historical (over a.... The token is currently valued at around $8700.

Corporate

Apart from the Disney reopening in China, Tesla sales there were down 64% MoM in March.

And perhaps in signs of the winds of a renewed electionary trade war, Apple will be moving a fifth of its production from China to India over a 5-year period.

Meanwhile, Qantas has informed both Boeing and Airbus that it won’t be taking delivery of over 20 aircraft.

Today, Under Armour reports quarterly earnings and Office Depot will hold a shareholders meeting.

Events