Finance Update – Covid 2.0 Sinks Equities

Asia – Indices Ignore Bloodbath

Chinese indices this morning seem relatively immune to yesterday’s bloodbath, still just in the green – the Shanghai Composite eking out a 1/3% gain.

The Nikkei is down a percent and the Hang Seng – a half. Japan’s all industry activity index doubled its fall in April at -6.4% MoM, while New Zealand’s trade deficitA trade balance that is negative as a result of cost (imports, on the national level) being greater ... halved to $1.33 bn YoY.

Europe – UK Economy Shrinking Badly

European equities had a bad day yesterday, the Belgian BEL20 losing 3.85%, followed by the DAX at -3,43%, as EC Pres. Von Der Leyen presents her first budget draft for 2021 – €166.7 bn in addition to €344 bn in aids and loans.

Atop Germany’s better-than-expected increase in the business climate to 86.2 points in June, the French marker only managed to climb to 77 – 3 points less than expected. ZEW’s expectations for Switzerland added 17 points in June, bringing it to 48.7.

In Brussels, Brexit negotiator Michel Barnier said the UK had refrained from addressing the fisheries and state aid components of a proposed exit deal.

Meanwhile, in London, a Reuters poll shows that the nation’s “economy is shrinking at its fastest pace in centuries,” 17.3% expected in Q2.

Americas – US Justice Tags Chinese Companies & Apple

With COVID cases surging throughout the US, US indices lost between 2.8% (Russel) and 2.19% (Nasdaq) yesterday, with futures indicating more red to come.

The Department of Justice is stepping up anti-China steps, compiling yesterday a list of 20 Chinese companies allegedly aiding the Chinese military. Department is also examining possible antitrust breaches by Apple (-1.77%), which allegedly encumbers companies selling its apps on the App Store.

Chicago fed head Evans yesterday said the 2nd wave of Coronavirus infections could hold back economic recovery and warned additional fiscal and monetary steps would be necessary.

Commodities – Italian Banks OK Cryptos

WTI lost another 27 cents on the barrel overnight after the EIA confirmed yesterday’s API build with a 1.44 mB addition to inventories.

Brent is down 35 cents after Russia announced it would provide local oil companies with loans to complete the drilling of 3,000 unfinished wells.

And as Bitcoin seems to be plunging towards its 9K supportThe price level that traders believe represents the lowest value an asset can reach. At this point, ... level, the Italian Banking Association yesterday approved a set of guidelines for launching a digital Euro. Leaprate informs us that Italian banks have “been operating under a distributed ledger technology” for some time.

Corporate – D&B Plan IPO

Qantas (-2%) yesterday said it was firing a fifth of its staff and seeking to raise $1.3 bn in equity at a 13% discount while resuming 70% of domestic flights by year’s end.

Daimler (-0.02%) and Nvidia (-2.27%) yesterday announced a joint effort to develop the next Merc generation of Tesla (-4.09%) challengers.

Famed business bible publisher Dun & Bradstreet has announced an IPO aimed at raising $1.38 bn with an additional $400 mn to be sold in private shares. No date yet has been announced.

And finally, McDonald’s (-1.25%) and Qualcomm (-0.24%) pay dividends today, while Nike (-1.81%) announces 4th quarter results.

Events