Finance Update – The End of Optimism

Americas

US data, as last week ended, provided a capsulated moment of optimism, as February income, Spending, inventories, and even GDP came in green for February.

Stocks, also last week buoyed by the US administration’s $2 trillion injection ended – however – down, the DOW losing 4% with the Nasdaq & S&P close behind.

This morning’s Dow futures, on the other hand, are forming a bullish pendant towards 21500, despite Trump’s delay of what he considers to be the deadline for an end to the Coronavirus lockdown.

Meanwhile, according to Reuters, the Department of Justice has begun examining a series of stock transactions made by US lawmakers as the pandemic began. The Bank of Canada cut its interestThe cost of accessing money not owned. rates by a half percent on Friday, pushing the loonie down against the dollar.

Europe

European data for March shows a less-than-tragic drop in consumer and business confidence in France and Italy, respectively.

Preliminary retail sales and consumer inflationThe rise in prices for goods and services, resulting in the deterioration of a currency’s purchasi... in Spain for March are understandably in the red, while most sentiment markers for the EU came in better than expected for March, but still its lowest in 5 years.

Still, indexes are trading lower, led by Spain and France’s -1.5% drop, and Germany’s inflation in March is down to 1.4%. Meanwhile, the UK reports an increase in housing buys, putting at 2014 record levels.

Asia

China overnight cut reverse repo rates by 20 points – the largest cut in 5 years – to help relieve economic pressure from Corona shutdowns, briefly pushing up the government’s 10-yr bond by a quarter percent.

A reverse repurchasing agreement allows the central bank to inject money into the economy by purchasing securities from the government with the obligation to sell them back at a higher rate. And still, Reuters this morning reports that Shanghai has topped the global IPO table, despite the Coronavirus epidemic, with 33 companies raising nearly $7 ½ billion since the year began.

Commodities

Gold last week finally saw its safe-haven status rekindled, shooting up from its sub-1500 low to 1700 on Tuesday. It has since been trading sideways in the 1550-1660 region, while Bitcoin continues flaccidly below 7K. Oil briefly crossed the $20 mark yesterday evening before returning to trend around the 20.50 mark.

Corporate

Microsoft yesterday announced a 775% surge in cloud services demand over the past week, telling Seeking Alpha, it was prioritizing 1st responders and emergency services.

As Airbus halts production in Spain, which has overtaken China in its number of Corona victims, Fiat Chrysler announced it may restart some production in Northern Italy.

Johnson & Johnson are set to commence testing of a Coronavirus vaccine by September – the announcement pushing up shares by 4% in premarket trading.

Later today, AIG, Harley Davidson, and Goldman Sachs will be paying dividends, and Broadcom will hold a general shareholders meeting.

Amazon workers at JFK airport are expected to go on strike today amidst complaints of insufficient anti-virus protection, and Facebook is facing allegations it is was stealing user data from Zoom.

Events