Wall Street Surges At Open On Jobless Surprise

U.S. stock markets surged at the opening on Friday after an expected and large rise in employment in May strengthened hopes that the worst of the coronavirus pandemic was over, and bolstered confidence in a speedy, ‘V-shaped’ recovery.


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By 9:37 AM ET (1337 GMT), the Dow Jones Industrial Average was up 672 points, or 2.6%, at a three-month high of 26,954 points. The S&P 500 rose 2.1% and the Nasdaq Composite was up 1.4%.

The Labor Department had earlier reported that the economy created 2.509 million net jobs in the month to mid-May, causing the jobless rate to fall from its postwar high of 14.7% to 13.3%. Analysts had expected nonfarm payrolls to shrink by 8 million.



“There will naturally be some doubt lingering about these figures given they are telling such a different story to all other data on the labor market, but these are the official ones and on the face of it are fantastic,” ING’s chief international economist James Knightley said in a research note. “It suggests the American economy can bounce back very vigorously and we all need to massively revise up our economic projections.”

The biggest individual gainers were, again, those that had lost the most on the way down, including Hertz Global and Luckin Coffee (NASDAQ:LK), both of which have already filed for bankruptcy protection. Among more viable businesses, American Airlines (NASDAQ:AAL) stock and Occidental Petroleum (NYSE:OXY) stock both rose 23%, the latter helped further by reports that OPEC and its allies will meet on Saturday to confirm a one-month extension to the current deal keeping a total of 9.7 million barrels a day of oil off world markets.



U.S. Crude futures hit their highest in three months on the news, rising as high as $39.55 a barrel before retracing a little to trade at $39.05, up 4.4% on the day.




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Financial Markets – Investors Jittery About Potential Actions From The U.S. Or China

International stocks wavered, as investors braced for President Trump’s response to China’s push for tighter security controls on Hong Kong.


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By early Friday afternoon in Hong Kong, the benchmark Hang Seng Index had declined 0.6%. Japan’s Nikkei 225 closed 0.2% lower, while Australia’s S&P/ASX 200 retreated 0.8%.

Indexes in South Korea and Shanghai recouped earlier losses to turn slightly positive, rising 0.3% or less. S&P 500 futures were down 0.2%.

Colin Low, senior macro analyst at FSMOne.com in Singapore, said optimism over the reopening of economies could be overriding concerns over heightened U.S.-China tensions, helping markets pare earlier losses.

“Markets will be watching what Trump will do or say in his press conference later today,” he said, as investors are concerned about potential concrete actions by either the U.S. or China.



Any U.S. measures on trade or against Chinese companies, and any Chinese retaliation, could have a greater impact than previous actions taken before the new coronavirus battered both economies, he added.

U.S. stock indexes closed lower Thursday after President Trump said he would hold a press conference about China on Friday. The three major gauges fell between 0.2% and 0.6%.

On Thursday, China’s legislature approved a resolution to impose national-security laws on Hong Kong. That sets the country on a collision course with the U.S., which has accused Beijing of reneging on its pledge to respect the city’s self-governance.

Weakness in the Chinese yuan has reflected heightened tensions between the world’s two largest economies. A weaker yuan could help China’s economy by making its exports more competitive, but risks provoking U.S. criticism that Beijing is manipulating its currency.

The People’s Bank of China set a daily midpoint for trading of the onshore yuan at 7.1316 to the dollar, fixing this level at a fresh 12-year low for the third time this week.


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By early afternoon in Hong Kong, the less tightly controlled offshore yuan strengthened slightly to 7.1659 to the dollar, while the onshore yuan stood at 7.1478. Earlier this week, the offshore yuan, which started trading in 2010, came close to the all-time weak levels that it hit in September.

The yield on the benchmark 10-year U.S. Treasury note fell to 0.664%, from 0.703%. Bond yields fall as prices rise.

Brent crude, the global gauge of crude-oil prices, fell 0.8% to $35.73 a barrel.



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Oil Price – Traders Are No Longer In Panic Mode To Find Buyers For Unwanted Oil As Demand Ticks Up



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Oil markets are returning to relative normality, the once yawning gap between the price of an actual physical barrel of oil and futures prices has narrowed sharply.

At its worst in April, a barrel of oil in the North Sea cost $10 less than the price on a Brent oil futures contract, a decade-high gap for the world’s benchmark oil price, according to S&P Global Platts. Now, the gap has shrunk to less than $2 a barrel as the oil market rebalances and traders are no longer in panic mode to find buyers for unwanted crude.

“A few weeks ago, we had armageddon pricing when nobody wanted physical barrels apart from for storage,” said Richard Fullarton, chief investment officer at hedge fund Matilda Capital Management Ltd.

The price of physical oil slipped far below futures prices last month when oil storage ran short and the cost to store crude jumped. The two prices tend to collide ahead of the expiration of futures contracts.

The return to health in the physical oil markets reflects several factors. Oil producers have made large, coordinated cuts in production. China’s economy has restarted and lockdowns in Europe and the U.S. eased, creating an uptick in demand. And a shortage of oil storage, which at one point drove U.S. oil futures prices into negative territory, appears to have peaked.

Oil prices, both physical and futures, have almost doubled since their April nadir, though they slipped Friday after China abandoned its yearly gross domestic product growth target.

Front-month futures for Brent crude, the global benchmark, fell 2.6% to $35.13 a barrel Friday, having rebounded from their $19.33-a-barrel low on April 21. Its physical counterpart was priced at $34.13 a barrel late Thursday.



Physical oil tends to be traded by major commodities trading houses, oil companies and refiners who have the financial heft and logistical capacity to store large amounts of oil in case they need to wait for a better pricing environment.

One of the largest independent traders, Trafigura Group Pte., has been on a buying spree. The Swiss company snapped up at least 15 cargoes of North Sea crude—amounting to 9 million barrels of oil—between May 13 and 21, according to S&P Global Platts. Trafigura declined to comment on its bet on North Sea crude, which was reported by Reuters.

Smaller traders also buy physical barrels of oil or refined products, for instance by filling fleets of tanker trucks with gasoline, selling it on to gas stations when prices move higher.

Overall, the gap between physical oil and futures was more pronounced in international markets than the U.S. As a largely seaborne crude, Brent producers could rush to store oil on massive tanker ships. Sellers of the largely landlocked U.S. benchmark, West Texas Intermediate, had to pay buyers to take it off their hands when futures prices turned negative on April 20.

Unlike Brent oil futures, which are all cash settled, some WTI futures contracts require their owners to take delivery of physical oil when the contracts settle. Even so, physical WTI at the end of March was $6 less a barrel than the futures market.



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That gap is now close to gone. The storage conditions were feared to be most acute in Cushing, Okla., where WTI contracts are settled.

“We didn’t see tank tops at Cushing. Instead we’ve seen phenomenal levels of shut-ins,” said Edward Marshall, a commodities trader at Global Risk Management, referring to the act of oil producers turning off wells to choke supply.

A pickup in refiner demand to supply Americans getting back on the road has helped WTI’s recovery. Pipeline flows from Cushing to Midwestern refiners are 400,000 barrels a day higher than they were in early April, according to commodity-market information provider Genscape.



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Hertz Files For Bankruptcy



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Hertz Global Holdings Inc., filed for bankruptcy protection Friday, saddled with about $19 billion in debt and nearly 700,000 vehicles that have been largely idled because of the coronavirus.

The Estero, Fla.-based company entered chapter 11 proceedings in the U.S. Bankruptcy Court in Wilmington, Del., hoping to survive a drop-off in ground traffic from the pandemic and avoid a forced liquidation of its vehicle fleet.

The Wall Street Journal reported earlier Friday that Hertz had failed to reach a standstill agreement with its top lenders and was preparing to file for bankruptcy as soon as that evening.

The company’s collapse marks one of the highest-profile corporate defaults stemming from the pandemic’s impact on air and ground travel, though Hertz also had challenges before the current economic crisis. Even before the Covid-19 outbreak, Hertz had been struggling with competition from peers including Enterprise Holdings Inc. and Avis Budget Group Inc., as well as from ride-hailing services such as Uber Technologies Inc. and Lyft Inc. The company lost some $58 million last year, its fourth consecutive annual net loss.

But Hertz’s business was hammered by the onset of the coronavirus, as people world-wide bunkered in at home and global travel shriveled up. Going forward, as businesses adapt by conducting meetings remotely, business travel may not return to prepandemic levels, according to bankers and analysts who follow Hertz.

Hertz didn’t reach a deal with creditors before entering chapter 11, heightening the risk of a full liquidation of the fleet, although the company and investors have several weeks to work out an agreement avoiding that outcome, people familiar with the matter said.

Hertz has spent years trying to restructure its business, and has blown through four chief executives in less than a decade. Most recently, former Chief Executive Kathryn Marinello was replaced Monday by Paul Stone, who previously served as the company’s executive vice president and chief retail operations officer for North America.

Hertz has also had a debt problem that can be traced back to a 2005 leveraged buyout by private-equity firms.





Founded in Chicago in 1918 and originally known as Rent-a-Car Inc., Hertz opened its first airport car-rental facility at Midway Airport in 1932. The company’s owners have included RCA Corp. and later Ford Motor Co., which sold Hertz to a buyout group led by Clayton Dubilier & Rice in 2005 for $5.6 billion.

The company went public in 2006, and activist investor Carl Icahn, who started acquiring Hertz shares in 2014, now owns more than one-third of the company and has placed three of his representatives on the board.

The pandemic has diminished automotive traffic in the U.S., squelched car sales and cut into rental reservations at Hertz. The Wall Street Journal reported in early May that Hertz, the nation’s second-largest rental-car company by fleet size behind Enterprise, was preparing for a bankruptcy filing.

The bankruptcy is expected to be complex given the company’s vast debt and corporate structure, which includes $14.4 billion of vehicle-backed bonds at subsidiaries that aren’t part of the chapter 11 filing.

Like Avis and some other rental car companies, Hertz doesn’t own its vehicles. The company leases its rental-car fleet, nearly 700,000 vehicles in total, from separate financing subsidiaries. The lease payments are earmarked for investors that own bonds backed by the fleet.

Now that Hertz has filed for bankruptcy, investors with rights to the vehicle fleet have to wait for 60 days before they can foreclose on and sell the cars. Hertz and its creditors will likely aim to prevent a complete liquidation and strike a deal to downsize the fleet while keeping some vehicles in operation, said people familiar with the matter.

With the $14.4 billion in vehicle-finance bonds so widely held—by pension funds, mutual funds and structured-credit funds—the company has faced difficulty coordinating with bondholders, people familiar with the matter said.


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Rental-car companies play an important role in supplying newer models to the used-vehicle market. Hertz also is a major customer for U.S. auto makers, purchasing about half of its fleet from General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV in 2019, according to a financial filing.

Analysts were concerned that Hertz could be forced to sell part or all of its fleet into an unusually weak market. But the possible liquidation would come at a time when demand for used vehicles is rising slightly, and pricing in the market is showing signs of recovery after hitting historic lows in April.

“Any ripple effect will be less than it was six weeks ago,” said Zo Rahim, an analyst for Cox Automotive, which owns vehicle-auction operator Manheim Inc.



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U.S. To Invest $1.2 Billion To Secure Potential Coronavirus Vaccine From AstraZeneca

The U.S. government has agreed to hand AstraZeneca PLC up to $1.2 billion to secure the supply of a potential coronavirus vaccine that could be ready as early as October.

Under the deal, the government will bankroll a 30,000-person vaccine trial in the U.S. starting in the summer, plus the ramp-up of manufacturing capacity to make at least 300 million doses. The first doses will be ready in the fall should the vaccine prove effective, it said.



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Alex Azar, the Health and Human Services Secretary, called the deal a “major milestone” in the administration’s effort—code-named “Operation Warp Speed”—to make a safe, effective vaccine widely available to Americans by 2021.

The vaccine in question was developed by the University of Oxford’s Jenner Institute and is one of a small group of candidates already being tested in humans. Others include vaccines from Pfizer Inc. and Moderna Inc. AstraZeneca, under a licensing deal with Oxford, has responsibility for manufacturing the university’s vaccine, and has promised to sell the vaccine without making a profit during the pandemic.

Governments around the world are counting on an effective vaccine against Covid-19 to defeat a virus that has killed hundreds of thousands of people and devastated the global economy. But to guarantee that doses are ready as soon as possible, companies must ramp up manufacturing capacity significantly before clinical trials provide solid proof that the vaccines work—a costly exercise more viable with financial support from governments and other funders.


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The U.S. government has moved fast to secure supply deals with vaccine makers. It has also awarded Moderna $483 million to ramp up production of its candidate and is supporting research into potential vaccines from Johnson & Johnson and France’s Sanofi SA . It is doing those deals through its Biomedical Advanced Research and Development Authority division, or Barda, which was set up in 2006 to prepare for biologic threats such as pandemics and bioterrorism.

Earlier this week, the U.K. government agreed to pay AstraZeneca £65.5 million ($79 million) to secure 100 million doses for its population, with 30 million of those ready as early as September. That deal relates purely to manufacturing, and doesn’t include any clinical trial funding.

AstraZeneca says it is in talks with several other governments, as well as nonprofits like the international vaccine alliance, Gavi, and the Coalition for Epidemic Preparedness Innovations on deals that would further boost production.

Oxford started a 1,100-person study in April and expects to roll the trial out to a further 5,000 participants later this month, should the first phase go well.





Its vaccine has progressed quickly, in part because it uses a technology that has been deployed in earlier vaccines developed by the university. It uses an inactivated chimpanzee virus containing the genetic sequence for the “spike protein” found on the new coronavirus.

In a small animal study, not yet peer-reviewed, it appeared to stop the virus from spreading to the lungs, protecting the inoculated monkeys from developing pneumonia. It was unclear whether the vaccine stopped infection entirely, however, as the vaccinated monkeys tested positive for virus in their noses.



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Economic Indicators – Japan Exports Fall Most Since 2009 As Pandemic Wipes Out Global Demand

Japan’s exports fell the most since the 2009 global financial crisis in April as the coronavirus pandemic slammed world demand for cars, industrial materials and other goods, likely pushing the world’s third-largest economy deeper into recession.

The ugly trade numbers come as policymakers seek to balance virus containment measures against the need to revive battered parts of the economy, with the risk of a second wave of infections only complicating this challenge.



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The central bank will hold an emergency meeting on Friday to work out a scheme that would encourage financial institutions to lend to smaller, struggling firms. Policymakers are also considering cash injections for companies of all sizes.

Ministry of Finance (MOF) data on Thursday showed Japan’s exports fell 21.9% in April year-on-year as U.S.-bound shipments slumped 37.8%, the fastest decline since 2009, with car exports there plunging 65.8%.

The fall was the biggest since October 2009 during the global financial crisis, but slightly less than a 22.7% decrease seen by economists in a Reuters poll. Exports fell 11.7% in March.

“Reopening of trade with China led China-bound exports of electronics parts and imports of masks and PC, but trade with Europe, America and Southeast Asia remain shrunk,” said Takeshi Minami, chief economist at Norinchukin Research Institute.


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“It’s still far from fully-fledged resumption of economic activity. As exports and imports remain stagnant for a prolonged period of time, global trade will remain contractionary for the time being.”

Exports to China, Japan’s largest trading partner, fell 4.1% in the year to April, due to slumping demand for chemical materials, car parts and medicines.

Shipments to Asia, which account for more than half of Japanese exports, declined 11.4%, and exports to the European Union fell 28.0%.

Other trade-reliant economies in Asia have also been hit with data on Thursday showing South Korea’s exports slumping by a fifth in the first 20 days of May, year-on-year.

Industry data released last week showed Japan’s machine tool orders in April fell to their lowest level in more than a decade, a sign of deteriorating business spending.

Japan’s economy slipped into recession for the first time in 4-1/2 years, putting the nation on course for its deepest postwar slump as the pandemic ravages businesses and consumers.





Monday’s first-quarter GDP data underlined the broadening impact of the outbreak, with first quarter exports plunging the most since the devastating March 2011 earthquake and tsunami.

A private sector manufacturing survey showed on Thursday the decline in Japan’s factory activity accelerated in May as output and orders slumped.

Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close.



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Behind Bond Market’s Stall, Investors See Hard Times Ahead

For much of the past month and a half, the yield on the benchmark 10-year U.S. Treasury note has hovered around two-thirds of a percentage point—a shade above its all-time low of around 0.5% set in March.



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Taken together, the low level of the 10-year yield and its stability suggest that bond investors not only hold a dreary economic outlook but also are unusually confident in that perspective, a contrast with the optimism that has carried stocks to their highest levels since early March.

An important benchmark for interest rates across the economy, the ultralow 10-year Treasury yield has facilitated an explosion of corporate-bond issuance from the likes of Costco Wholesale Corp., Apple Inc. and Clorox Co. Monday’s news that an experimental coronavirus vaccine from the drugmaker Moderna Inc. had shown promise in an early trial helped push the 10-year yield to the top of its recent range. But the yield, which falls when bond prices rise, edged lower again Tuesday and remained at roughly half of its low from before this year.

Two factors typically determine longer-term Treasury yields. One is investors’ estimates of the average federal-funds rate set by the Federal Reserve over the life of a bond. The other is what is sometimes referred to as a risk premium, or an extra amount of yield investors demand to be compensated for the chance that short-term interest rates could rise higher than anticipated as a result of scenarios such as accelerating economic growth and inflation.

Tuesday’s closing 10-year yield of 0.711% suggests many investors believe that the Fed could basically repeat its postcrisis playbook: leaving the federal-fund rate near zero for about seven years before raising it to around 2%. Yields are lower than they were a decade ago in large part because investors feel more assured about that outcome, having seen the central bank implement such policies before without spurring a significant pickup in inflation.



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The risk premiums embedded in Treasurys “are basically zero or nonexistent,” said Thanos Bardas, global co-head of investment grade at Neuberger Berman. Expecting yields to remain rangebound over the next few quarters, Mr. Bardas said he likes Treasurys in the seven to 10-year range and has high hopes for the new 20-year bonds that are set to be reintroduced by the Treasury Department on Wednesday.

The stability of Treasury yields is particularly notable because it comes even as an unprecedented deluge of new debt floods the market. Not only has the Treasury Department ramped up the size of bond auctions to fund trillions of dollars in economic-relief measures but higher-rated companies also have been bombarding investors with new bond sales as they try to replace revenue that is being lost as a result of the coronavirus pandemic.

he Fed, meanwhile—after saying in March it would buy an unlimited amount of Treasurys—has slowed the pace of its purchases to $6 billion a day from $75 billion a day. Still, yields have barely budged, indicating that “globally, there’s tremendous demand for that high-quality debt,” said Colin Robertson, head of fixed income at Northern Trust Asset Management.

Treasury yields that are reliably this low have wide-ranging implications for markets and the economy. For investors, paltry yields might signal a gloomy future. But they can also propel them into riskier assets in search of returns, a likely factor in the surprisingly strong rebound in stocks since their sharp decline earlier in the year.

Low yields have also encouraged borrowing. For a brief period in March, corporate borrowing costs shot upward as fear gripped markets and investors sold bonds from even the safest companies. Since then, though, the average extra yield investors demand to hold investment-grade corporate bonds over Treasurys has shrunk, enabling businesses to benefit from the low benchmark rates.

Last month, Costco sold 10-year notes with a 1.619% yield, the lowest on record for that maturity, according to LCD, a unit of S&P Global Market Intelligence. Other companies that have recently issued 10-year bonds with sub-2% yields include Apple, Clorox and International Business Machines Corp. Overall, through Monday, nonfinancial companies had issued $148 billion of investment-grade bonds this month after selling a record $231 billion in April, according to Dealogic.

Treasury yields could turn even less volatile if the Fed adopts a policy known as yield-curve control, several analysts said. A cousin of quantitative easing, yield-curve control entails purchasing an unlimited amount of bonds at a particular maturity to peg rates at a target.







Yield-curve control has been used for years by the Bank of Japan to keep the yield on 10-year Japanese government bonds at around 0%. In March, the Reserve Bank of Australia said it would set a target of 0.25% for the country’s three-year government bond.

In the U.S., Fed Chairman Jerome Powell said last fall that “short-term yield-curve control is something that is worth looking at” as a tool to fight the next recession. It is far from certain that the Fed will enact such a policy. Still, the mere discussion has likely contributed to the bond market’s calm, analysts said.

Something similar happened to corporate bonds after the Fed said in March it would start buying the securities, said Thomas Simons, senior vice president and money-market economist in the Fixed Income Group at Jefferies LLC. Though it was nearly two months before the Fed started implementing the program, the announcement alone sparked a rush into the asset class as investors anticipated the Fed’s backing.

“Just knowing that the Fed could do something is almost the same as the Fed actually doing it,” Mr. Simons said.

Not all investors are unconcerned about a pickup in inflation that could push longer-term yields higher. A welcome surprise—such as an early vaccine available for emergency use this fall—could provide a major boost to the economy. Some also see risk in the tremendous amounts of money that the federal government is spending to help the economy, coupled with the promise of unlimited bond-buying from the Fed, which essentially helps finance that spending.

“The Fed wants to push inflation higher, and is willing to keep monetary policy accommodative even as the economy recovers from the Covid-19 shutdown to get inflation expectations up,” said Donald Ellenberger, senior portfolio manager at Federated Investors. Mr. Ellenberger said he therefore sees value in Treasury-inflation-protected securities, or TIPS.

Still, he said, his team’s strategy is to “trade the range”—betting on higher yields when the 10-year falls below 0.6% and lower yields if it approaches 1% in large part because of the Fed’s continued bond-buying and desire to support the economy.



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Global Stock Markets Mixed – Investors Continue To Weigh The Prospects For Economic Recovery From The Pandemic

U.S. stock futures rose, while international markets were mixed, as investors continued to weigh the prospects for global economic recovery in the wake of the coronavirus pandemic.

S&P 500 futures were up 0.6%, suggesting U.S. stocks could open higher Wednesday. The pan-continental Stoxx Europe 600 dropped 0.4%. Markets in France, Germany and Switzerland were closed for a public holiday.



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In Asia, Japan’s Nikkei 225 and Korea’s Kospi Composite rose 0.8% and 0.5% respectively. That put both on course for their fourth straight day of gains. Hong Kong’s Hang Seng was little changed, sliding less than 0.1%, while Australia’s S&P/ASX 200 rose 0.2%, reversing earlier losses. The Shanghai Composite declined 0.5%.

Foreign and institutional funds—detecting more signs that some economies are slowly returning to normal—have started reallocating investments back into Asia, and particularly China, said David Chao, global market strategist for Asia Pacific ex-Japan at Invesco.




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Mr. Chao said valuations of Asia shares were lower than those of developed-market peers, adding to investor incentives to buy the region’s stocks.

“Equities are expensive in developed markets like the U.S., and they’re not yet out of the woods with the coronavirus,” he said.

However, he warned that escalating trade tensions between the U.S. and China, coupled with economic weakness in developed countries, could weigh on stock performances globally.

Mr. Chao said U.S. stocks could be volatile in the months ahead, as investors become less optimistic about a V-shaped recovery.

“It feels like the calm before the summer storm,” he added.

A couple of near-term catalysts could lift regional markets, said Ben Powell, BlackRock Investment Institute’s chief investment strategist for Asia Pacific. One would be data—such as exports from South Korea, Taiwan and other trade-reliant economies—that started to show a recovery in global economic activity.







New stimulus measures by governments and central banks could be another trigger. China could detail new government spending plans during national legislative meetings that start Friday, while in Japan, the central bank will meet Friday to discuss further aid to financial institutions.

In the energy markets, West Texas Intermediate futures, the main gauge for U.S. crude oil prices, declined less than 0.1% to $31.93 a barrel. Global benchmark Brent crude rose 0.3% to $34.76 a barrel.

The yield on the 10-year U.S. Treasury note fell to 0.699% from 0.711% Tuesday. Bond prices rise as yields fall.



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The Treasury Department Ready to Increase Investments In Fed Lending Programs

Treasury Secretary Steven Mnuchin said Tuesday he was prepared to provide more money and take more risks to facilitate lending programs being established by the Federal Reserve.



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Congress made $500 billion available to the Treasury Department through the $2 trillion economic-relief package that President Trump signed into law in March. The legislation provided the Treasury with $46 billion to provide direct assistance to airlines and other distressed industries, plus another $454 billion to cover losses in Fed lending programs.

The Fed has launched nine lending programs with Mr. Mnuchin’s approval to support financial markets, businesses, cities and states, and the Treasury Department has provided $195 billion from the economic-relief bill to cover losses in some of those programs.

“I am prepared to allocate the rest of that,” Mr. Mnuchin told lawmakers during a hearing conducted by the Senate Banking Committee via a videoconference Tuesday. “The only reason I have not allocated it fully is we are just starting to get these facilities up and running.”

Lawmakers have pressed Mr. Mnuchin on how much risk the government is willing to take on its investment in the Fed’s lending facilities, and whether he is prepared to lose the money Congress provided to ensure credit is widely available to companies that need it most.

“The answer is absolutely yes,” Mr. Mnuchin said. “We are fully prepared to take losses in certain scenarios on that capital.”

Mr. Mnuchin appeared at the hearing alongside Federal Reserve Chairman Jerome Powell. Lawmakers pressed both men on the need for additional spending to limit the economic damage from the current downturn. Democrats in the House of Representatives narrowly approved a $3 trillion relief package last week with only one Republican voting in favor.







Mr. Mnuchin has said the administration expects economic growth to pick up in the second half of the year, and administration officials are taking a wait-and-see stance regarding additional relief. Mr. Powell in recent weeks has urged Congress and the White House to spend more money to ensure the government’s response to the economic downturn isn’t squandered, and he has said the recovery faces a longer and more uncertain path.

“This is really a question for Congress to weigh,” Mr. Powell said Tuesday.

“There is a growing sense that the recovery may come more slowly than we would like…and that may mean that it’s necessary for us to do more,” Mr. Powell said last week during a moderated discussion online.

Mr. Powell faced questions on when the central bank’s lending programs will be up and running. The Fed has launched several operations to calm short-term funding markets, recycling programs it had used in the 2008 crisis to stabilize financial markets.

But it has unveiled other programs to backstop corporate and municipal bond markets and to lend directly to small and midsize businesses that are taking more time to put into operation.

The Fed began purchasing exchange-traded funds of corporate debt last week through one of these new programs, and it rolled out application materials Monday for state and local-government borrowers that plan to issue debt of up to three years through the central bank’s Municipal Liquidity Facility.

By simply announcing its intention to backstop corporate-debt markets, the Fed has made it possible for companies to borrow more money from private investors without the Fed’s buying a single security.

Still, the Fed’s ability to follow through on those programs will be closely watched by markets and lawmakers alike.



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In one particularly novel operation, called the Main Street Lending Program, the central bank will lend directly to middle-market firms that are too large for aid from the Small Business Administration and too small to borrow in Wall Street debt markets.

The Fed has already adjusted the terms of its loan programs several times, and Mr. Powell said the central bank would continue to adjust the terms for those operations “as we learn more.”

Mr. Powell said he expected that program would be ready to start lending by the end of the month or in the first week of June.

While some lawmakers have pushed the Fed to ease terms on certain lending operations, others have warned against the central bank’s expanding eligibility criteria to benefit sectors of the economy they think shouldn’t be helped by the Fed, such as oil-and-gas exploration and drilling.

Mr. Mnuchin faced questions on the Treasury Department’s role in administering the Paycheck Protection Program, which has provided $530 billion in emergency small-business loans. The program got off to a bumpy start and has faced criticism over loans that went to large public companies, and rules limiting how small firms may spend the money to qualify for loan forgiveness.



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Stocks Surge As Oil Prices Rally

Stocks have their biggest gain in weeks as Wall Street is encouraged by a vaccine prospectvaccine prospect. Many of the world’s economies have begun to loosen restrictions on commerce, the Federal Reserve chair on Sunday signaled that the central bank has more firepower to lend to recovery efforts, and a drugmaker reported positive developments in an early trial of a coronavirus vaccine.



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Taken together, the developments set off a surge in global stock prices and Wall Street had its best day in about six weeks.

The S&P 500 rose more than 3 percent Monday, while stock benchmarks in Europe were 4 percent to 6 percent higher.

Before trading began in the United States, the drugmaker Moderna said its coronavirus vaccine showed promising early results in tests on humans. The early-stage tests were on just eight people, but the hope that a vaccine might be quickly developed was enough to give stock prices a lift.

Also bolstering markets was a pledge from Jerome H. Powell, the Fed chair, that there was “really no limit” to what the central bank could do with its emergency lending facilities.

“The one thing I can absolutely guarantee is that the Federal Reserve will be doing everything we can to support the people we serve,” Mr. Powell said during a television interview broadcast on Sunday.

The Fed chair also suggested that the worst economic readings were yet to come, even as states begin to gradually reopen. He said that he expected “a couple more months” of job losses and acknowledged that the unemployment rate, which hit 14.7 percent in April, could peak at 20 percent or even 25 percent.







Still, investors were looking for silver linings as the world grapples with lockdowns and other restrictions. Japan released economic figures on Monday that showed its economy formally fell into recession, but Tokyo has begun easing some of its containment efforts. Some restrictions have also been lifted in parts of Europe and the United States.

And trading on Monday had all the characteristics of a rally focused on the prospects for a return to normal. Shares of companies that stand to gain the most, like United Airlines, Expedia Group and Marriott International, were among the best performers in the S&P 500.

Businesses that have benefited as Americans stockpiled food and cleaning supplies, like Campbell Soup and Clorox, were among a small number of decliners.

Oil prices also reflected optimism about the economy, with West Texas Intermediate, the U.S. benchmark, rising above $30 a barrel for the first time since March. Shares of energy companies like Chevron and Exxon were also sharply higher.



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Oil Outlook Vastly Different Than When It Plunged Into Negative Territory A Month Ago

The fortunes of the oil market have turned around dramatically in the past month. This time last month, investors were watching the futures market in disbelief. The May contract for West Texas Intermediate oil was set to expire, and prices did the unthinkable — they plunged 300% in one day, deep into negative territory. In the spot market all across North America, prices also turned negative, meaning people literally couldn’t even give oil away.



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There were dire forecasts of much more pain ahead, and a recurrence of the wild trading was feared for the June contract. But now the outlook is much improved, as the June contract is set to expire Tuesday. The world has changed, and the ugly crisis created by both oversupply and a sudden lack of demand is beginning to reverse.

“We think fundamental right steps have been taken to get us on sounder footing,” said Helima Croft, head of global commodities strategy at RBC. Croft said the “green shoots of recovery in place,” as Chinese and U.S. demand are improving, and OPEC plus ended its feuding and agreed to sharply cut output.

China has been buying more oil, and its demand is clearly strengthening. U.S. drivers are getting back into their cars as coronavirus shutdown restrictions lift. On the supply side, Saudi Arabia last week added another 1 million barrels a day cut of its own to the OPEC plus deal for a 9.7 million barrel reduction, and America’s oil industry has cut its production quickly and sharply.

Oil prices jumped sharply Monday, rising on the positive developments and a rally in risk markets sparked by Fed Chairman Jerome Powell’s comments that the Fed will can do more to support markets and the economy. WTI futures for June were up 7.4% at $31.62 per barrel in afternoon trading.

Now, the demand side of the market and the supply side are improving in tandem, to reduce the oil glut that was close to filling all available storage facilities, including ships at sea. The fact that the world was running out of places to store oil in April was behind the sharp drop in the futures contract. Investors were unable or unwilling to take delivery of oil, and there were also investors who became trapped in the trade as the selling spiraled. Interactive Brokers took a $109.3 million hit to cover its customers’ losses.

Oil is now trading above $30 for the first time since March 17, and RBOB gasoline futures have risen above $1 per gallon for the first time since March 13. The strong move higher in the June contract is also forcing some investors to cover short positions, adding to the rise.







The United States Oil Fund ETF, based on futures contracts, was up more than 8% Monday. Some investors initially blamed USO for causing the market disruption last month, but the fund had already rolled out of the May contract before the market began to crater. A popular oil play for retail investors, USO has since restructured its holdings to distribute them more evenly across later dated contracts, rather than holding them in the front month.

As the June contract gets set to expire, the landscape has changed dramatically for the U.S. oil industry. U.S. production was at a record high in March, and has cut back by 1.5 million barrels a day in just about six weeks, to 11.6 million barrels a day, according to the Energy Information Administration’s latest weekly data. Analysts expect production could be down by another 500,000 to 1 million barrels soon.

“It’s just a massive response by the U.S. industry,” said John Kilduff, partner with Again Capital. “This is a remarkable plunge in activity. … It’s pretty clear the U.S. is now the swing producer.”

Baker Hughes reported that another 34 oil rigs went out of service last week, leaving just 258 active oil rigs, about a third of the rig count last year.

“Storage at Cushing actually fell last week. That was the whole mechanism last month that drove the negative pricing,” said Kilduff. “There were barrels to take in and no place to put them.” Cushing, Oklahoma is the storage hub for WTI, so the market watches storage levels there closely.

“The pace was such that it would have been topped out by the end of June,” Kilduff said, but that seems to have reversed. Traders said oil prices were also lifted Monday by a report from Genscape that showed another big drop in Cushing storage levels. Government data on the latest storage levels will be released Wednesday.

The weekly U.S. government data shows implied demand for gasoline was also up sharply, with demand at 7.4 million barrels a day, from the early April trough of 5.1 million barrels a day. Normal demand for this time of year is about 9.5 million barrels a day, and it peaks ahead of the July 4 holiday. Analysts said the government data overstates retail demand, which is more like 6.5 million barrels a day in mid-May.

Analysts say demand has improved and as of last week, it was off by about 30% from normal levels, much better than the approximately 50% drop in demand in early April. U.S. gasoline demand is key because it is typically equal to about 10% of global oil demand.

Francisco Blanch, head of global commodities and derivatives at Bank of America, said he expects the rally to continue for now, but prices will not go that much higher. “This is a recovery that has a pretty low ceiling. My sense is that if prices approach $40 a barrel, then production will come back pretty quickly,” he said.

Oil prices were also helped Thursday by a news report that Chinese demand has returned to levels near where it was before the lockdown there.

RBC has been tracking Chinese data, including on airline flights, and it expects demand will recover an average 9% this quarter, 17% in the third quarter and 25% in the fourth quarter from the lows seen during the first quarter. Croft expects the recovery in China to be the quickest, relative to other global regions.



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Which Trading Platform Is Best For Beginners UK?

Which Trading Platform Is Best In UK?



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The best stock trading platform in UK for 2020? ….  How To Choose The Best Online Broker in UK { 2020 } …


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


cropped-trade-job.png


◊ Best Stock Trading Platform In UK {2020} : Plus500 Review ◊


Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commodities, cryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Plus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


TRUST … The company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.

Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.

There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Commodity-Trading-today




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Japan’s Economy Fell Into Recession In First Quarter Of 2020

The world’s third-largest economy after the U.S. and China shrank an annualized 3.4% in the January-March period, pushed down by the initial effects of the coronavirus pandemic. That followed a revised 7.3% contraction in the previous quarter that was triggered by an increase in the national sales tax. Two straight quarters of contraction is one definition of a recession.




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“The situation has become even more severe in April and May after a state of emergency was issued,” Economy Minister Yasutoshi Nishimura said Monday. “The economy is expected to shrink substantially for the time being.”

Prime Minister Shinzo Abe declared a national state of emergency in April to contain the spread of the coronavirus. Last week, he lifted it in 39 of 47 prefectures. It still applies in Tokyo and Osaka, but is expected to end nationwide in the next week or two.

Many stores and restaurants have closed during the pandemic, while tourism has virtually halted because most foreign visitors are barred from entering the country and Japanese people have been encouraged to avoid travel.

Economists are forecasting a contraction at an annualized pace of 20% or more in the current quarter.

Exports fell at an annual rate of 21.8% in the first quarter, reflecting supply-chain disruptions and lockdowns in China, one of Japan’s biggest markets. Private consumption and capital spending by companies also fell, but not as much.





Daiwa Securities economist Mari Iwashita said exports were likely to fall further with lockdowns continuing in some countries. She said imports might improve as China’s economy moves closer to normal operations and provides Japan with personal computers for people working at home and masks.

Société Générale economist Takuji Aida said that even after Japan’s state of emergency lifts, the pace of economic recovery may be slow because many people may see their income reduced or lose their jobs. “Households and companies are reaching their limits of their strength,” he said.

Mr. Nishimura, the economy minister, said the government planned to put together an additional spending package by about May 27, including further support for corporate financing and aid for students. In April, Parliament passed a measure with some $240 billion in spending, including cash payments of about $935 to every person in Japan.



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Stocks Rally As Hopes For New Virus Vaccine Build

Shares of Moderna, a company that has been working on a vaccine for the coronavirus, jumped 21%. The company said it had positive results from early human tests of its vaccine.



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U.S. stocks rallied Monday on hopeful news around a potential coronavirus vaccine, recovering ground following their biggest weekly percentage drop in nearly two months. The Dow Jones Industrial Average jumped 732 points, or 3.1%, to 24419, the S&P 500 rose 2.7% and the Nasdaq Composite added 2%.

The gains wiped out last week’s losses. The S&P 500 shed 2.3% last week after a range of data highlighted the sharp contraction in economic activity across the nation. European indexes also climbed, with the pan-continental Stoxx Europe 600 gauge rising 3.1%. Most major Asian benchmarks ended the day higher.

Shares of Moderna, a company that has been working on a vaccine for the coronavirus, jumped 21%. The company said it had positive results from early human tests of its vaccine.

“The idea that there has been progress in Moderna’s trials but also the more positive news that it looks like coronavirus could be tackled with a vaccine, has helped boost sentiment,” said Edward Park, deputy chief investment officer at Brooks Macdonald.

In bond markets, the yield on the benchmark 10-year Treasury edged up to 0.679% from 0.640% Friday. Yields move inversely to bond prices.

The S&P 500’s energy, real estate, industrials, materials and financials sectors all rose at least 3%. Energy was up 5.8%, driven by an 8.9% gain in crude-oil futures.

As economies emerge from monthslong lockdowns, markets will tend to creep higher, according to Paul Chew, head of research at Phillip Securities in Singapore. But a stronger rally would have to wait until investors believed there is little risk of a big second wave of infections, he said.

Virus-related news has been a bigger driver of stocks than economic data, which are lagging indicators, Mr. Chew said. “Even with better economic numbers, the market won’t rejoice,” he added.

Travel companies and airlines led gains among European stocks. Holiday provider TUI rose 13.5%, Ryanair Holdings climbed 13% and British Airways owner IAG Group rose 10%.

There were several factors behind the rise, said Russ Mould, investment director at AJBell. Major tourist destinations Italy and Greece signaled they would accept tourists from countries where international travel was permitted.

European flight operator Ryanair reported its full-year results Monday and reiterated that it planned to resume 40% of its flights from July. After grounding 99% of its aircraft in April, investors were concerned about missing out on buying the dip, Mr. Mould said.

“There’s an element of get in now; it can’t get worse and it might get sharply better,” he said.



Federal Reserve Chairman Jerome Powell cautioned Sunday that the U.S. economic recovery could take more than a year. The unemployment rate is likely to keep rising through June and then begin to decrease as businesses reopen, and both the Fed and lawmakers may need to do more to bolster the economy, he said in a broadcast interview.

“If lockdowns might be eased over a longer period of time, that would lead to recovery not really taking place until 2021,” Mr. Park said. “The size of the recession in the first half of 2020 is almost being viewed by markets as a curiosity, as investors believe the growth will be at least partially recouped.”

“The worse the news gets the more support there will be from central banks, and therefore more liquidity, as far as some investors are concerned, which is why they are buying,” Mr. Mould said. “That’s not the Main Street view, but it seems like the Wall Street view.”

Most equity benchmarks in the Asia-Pacific region were up less than 1%. Japan’s Nikkei 225 gained 0.5%, while the Shanghai Composite Index edged 0.2% higher. Australia’s benchmark S&P/ASX 200 traded 1% higher.

Fresh data Monday showed Japan’s economy, the world’s third-largest after the U.S. and China, fell into a recession in the first quarter. The economy shrank an annualized 3.4% in the three months ended March 31 after a 7.3% contraction in the previous quarter. Economists expect Japan’s economy to shrink by an annualized 20% or more this quarter as the pandemic keeps tourists away and depresses spending by households and companies.



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Financial Markets – Top 5 Things To Watch This Week

This Tuesday will see Federal Reserve Chairman Jerome Powell testify to Congress on the economic stimulus measures put in place so far. A day later the minutes of the Fed’s April meeting are scheduled to be released.


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Investors will be looking at the weekly jobless claims data as the reopening of the economy gathers pace. Retail earnings will shine a light on consumer spending amid the coronavirus pandemic, while Tuesday brings the monthly expiration of U.S. West Texas Intermediate crude futures contract. Meanwhile, central banks in South Africa and Turkey are expected to cut interest rates again.

Here’s what you need to know to start your week.


Powell testimony, FOMC minutes
The Fed chairman is to testify on Tuesday before the Senate Banking Committee alongside Treasury Secretary Steven Mnuchin to update government officials on the economic stimulus programs approved so far.

In a speech last week Powell gave a sober assessment of the long-term risks to the U.S. economic outlook and the possible need for elected officials to approve more spending programs to keep the economy afloat.

On Wednesday, the Fed is to publish the minutes of it is April meeting. In its rate statement last month, the Fed said it will keep interest rates at near-zero until officials are “confident that the economy has weathered recent events.”


Economic data
In the U.S., the main datapoint continues to be the weekly report on initial jobless claims. With the reopening of the economy gaining momentum economists are hoping for a reading of below 2.5 million, which would indicate that the rate of layoffs is slowing somewhat.

There is a packed economic calendar in the U.K. this week, with updates on March employment, retail sales and inflation. Given that the lockdown in the U.K. didn’t start until late March it may be too early to see the impact of the pandemic on the employment figures.

The retail sales data for April could show at least a 15% decline in spending, while plunging oil prices are expected to have sent inflation tumbling last month.


Retail earnings
While the U.S. first-quarter earnings season is almost over the retail sector is just getting started. This week will see results from big U.S. retailers including Walmart (NYSE:WMT), Home Depot (NYSE:HD), Lowe’s (NYSE:LOW), Target (NYSE:TGT), Kohl’s (NYSE:KSS) and Best Buy (NYSE:BBY). Their figures will show whether U.S. consumers are still spending money despite the widespread coronavirus lockdowns.

The retailers are reporting in the shadow of online shopping giant Amazon (NASDAQ:AMZN), which is among the “stay-at-home” stocks benefiting from the lockdown. Its shares have soared some 28% this year.


Repeat performance of oil plunge?
The monthly expiration of U.S. West Texas Intermediate crude futures contract is coming up on Tuesday and many energy traders are worried about a repeat performance of the oil price slump last month which saw prices drop into negative territory for the first time ever.

Normally uneventful, the expiry turned dramatic in April as brimming storage tanks discouraged traders from taking delivery of oil.

The U.S. Commodities Futures Trading Commission has warned market participants they should be prepared for volatility and negative pricing again, with oil storage still tight and the demand outlook still severely depressed.

But oil prices have recently rebounded on hopes that the easing of lockdown restrictions will boost the energy demand outlook. In another hopeful sign, U.S. crude inventories fell in the most recent week for the first time since January.

Yet some traders seem to be heeding the CFTC’s warning. Volumes in the July futures contract, which expires in a month’s time, are outpacing the June contract by nearly 50%.


Emerging market rate cuts
Central banks in Turkey and South Africa are both to hold policy meetings on Thursday and both are expected to cut rates again despite heavy losses their currencies’ have recently endured.

Analyst polls predict South Africa will cut its 4.25% main rate by another 50 basis points. Economists stress any policy easing must be sizeable if it is to offer any help to the suffering economy.

Turkey’s meeting will be even more interesting. The lira has plunged to record lows, hard currency reserves are dwindling and inflation is in the double digits, yet all that probably won’t deter the central bank from chopping another 50-100 basis points off its 8.75% repo rate



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Which Is The Best Broker In Singapore?

Which trading platform is best in Singapore?


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What is the best stock trading platform in Singapore for 2020? ….  How To Choose The Best Online Broker in Singapore { 2020 } …


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


To evaluate brokers, you should look at the following factors:

>>> Commissions
>>> Account Minimum
>>> Account Fees
>>> Your Trading Style and Tech Needs
>>> Promotions

Look at commissions on the investments you’ll use most… Brokers generally offer a similar menu of investment options: individual stocks, options, mutual funds, exchange-traded funds, and bonds. Some will also offer access to futures trading and forex (currency) trading.

The investments offered by the broker will dictate two things: whether your investment needs will be satisfied, and how much you’ll pay in commissions. Pay careful attention to the commissions associated with your preferred investments:

Individual stocks: You’ll typically pay a per-trade commission of $4 to $7. Some brokerages also offer per-share pricing.

Options: Options trades often incur the stock trade commission plus a per-contract fee, which usually runs $0.15 to $1.50. Some brokers charge only a commission or only a contract fee.

Mutual funds: Some brokers charge a fee to purchase mutual funds. You can limit mutual fund transaction costs or avoid them completely by selecting a broker that offers no-transaction-fee mutual funds. (Mutual funds also carry internal fees called expense ratios. These are charged not by the broker, but by the fund itself.)

ETFs: ETFs trade like a stock and are purchased for a share price, so they are often subject to the broker’s stock trade commission. But many brokers also offer a list of commission-free ETFs. If you plan to invest in ETFs, you should look for one of these brokers.

Bonds: You can purchase bond mutual funds and ETFs at no charge by using no-transaction-fee mutual funds and commission-free ETFs. Brokers may charge a fee to purchase individual bonds, with a minimum and maximum charge.

Pay attention to account minimums… You can find highly ranked brokers with no account minimum. But some brokers do require a minimum initial investment, and it can skew toward $500 or more. Many mutual funds also require similar minimum investments, which means even if you’re able to open a brokerage account with a small amount of money, it could be a struggle to actually invest it.

Watch out for account fees… You may not be able to avoid account fees completely, but you can certainly minimize them. Most brokers will charge a fee for transferring out funds or closing your account. If you’re transferring to another broker, that new company may offer to reimburse your transfer fees, at least up to a limit.

Most other fees can be sidestepped by simply choosing a broker that doesn’t charge them, or by opting out of services that cost extra. Common fees to watch out for include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.

Consider your trading style and tech needs… If you’re a beginner investor, you probably won’t need extras, like an advanced trading platform. But you may want an education and a little hand-holding. This could include videos and tutorials on the broker’s website, or in-person seminars at branches. Many brokers offer these services free to account holders.

Active traders, on the other hand, will want to look for a brokerage that supports that kind of frequency. That includes weighing a broker’s trading platforms, analysis tools, research and data offerings in addition to commissions — including discounts for high-volume traders — and fees.

Plenty of high-quality online brokers offer free demo access to trading platforms.

Take advantage of promotions… Online brokers, like many companies, frequently entice new customers with deals, offering a number of commission-free trades or a cash bonus on certain deposit amounts.

It isn’t wise to choose a broker solely on its promotional offer — a high commission over the long term could easily wipe out any initial bonus or savings — but if you’re stuck between two options, a promotion may sway you one way or the other.


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


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◊ Best Stock Trading Platform In Singapore {2020} : Plus500 Review ◊


Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commodities, cryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Plus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Trust … The company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.

Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.

There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Commodity-Trading-today




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Big Investors Aren’t Betting It All On A Coronavirus Cure


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Successful efforts that could help billions of people might not result in big profits for shareholders.


Shares are up for companies searching for coronavirus drugs and vaccines.


As drug companies race to discover treatments for the new coronavirus, big investment firms are placing cautious bets on likely winners.

Hedge funds and venture-capital firms, which are in the business of predicting the future for companies and economies, are growing more confident researchers will develop effective drugs to fight the pandemic.

Yet, successful efforts that could help millions—or even billions—of people, might not result in big profits for shareholders, the investors argue. Some are even placing bearish wagers on pharmaceutical companies they believe are attracting excessive excitement over their progress on Covid-19 treatments.

“Most of the stock prices don’t bear semblance to reality,” says Joseph Edelman, who runs Perceptive Advisors, a $4.2 billion New York hedge health-care fund, which is focused on what it sees as the disconnect between the price of stocks like drug company Gilead Sciences Inc. and their potential profits from any treatment or vaccine.

Shares are up for companies searching for coronavirus drugs and vaccines.

Gilead is up 18.9% this year, thanks to remdesivir, an antiviral drug administered intravenously that shortens the recovery time of hospitalized Covid-19 patients, according to recent data.

It is always hard anticipating successful drugs, but those wagering on coronavirus treatments face unique challenges. Some of the most innovative and promising approaches are wholly unproven. Companies are competing with foreign nations and not-for-profit organizations determined to achieve their own breakthroughs. Successful drugs or vaccines may run into pricing, manufacturing and distribution difficulties.

Among the issues investors are struggling with: Can Covid-19 treatments help those sick while also protecting individuals against the virus, or will that require different drugs? Will vaccines render treatments less necessary? Will governments allow companies to charge high enough prices to generate sizable profits?

Larry Robbins, who runs health-care hedge fund Glenview Capital Management, is avoiding bets on possible coronavirus treatments, partly because he expects researchers to find a vaccine, limiting the need for even the most effective treatments.

“We are all cheering for a treatment on a humanitarian level, but as an investor, you have to believe a treatment works, and that sales last long enough for it to have a material impact on a company,” he says.

Gilead is among the stocks that has investors thinking twice. The company expects to manufacture more than one million treatment courses of remdesivir by the end of this year, and the drug could have billions of dollars in new annual sales, investors say. If Gilead can develop an inhaled version of the drug or other alternatives to receiving it intravenously, its popularity could increase, bullish investors argue.


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But Gilead has promised to donate 1.5 million doses of Covid-19 treatments to hospitals free of charge, and the price it would charge thereafter is unclear, raising questions about eventual profits. In the past, Gilead has been criticized for placing high prices on its HIV and hepatitis treatments. It may feel pressure to keep a lid on remdesivir’s cost—especially given President Donald Trump’s past public criticism of drug prices.

If Gilead charges about $4,000 per course, as some investors predict, that would result in $4 billion of revenue for a million patients. That figure would be well below Gilead’s $14.6 billion of added market value this year—without taking into consideration the drug’s development costs, estimated to be about $1 billion, a figure that would reduce any profits.

Some bearish investors aren’t yet convinced of remdesivir’s efficacy.

“Even if the drug has only a modest effect, people will still prescribe it, but Gilead won’t make a lot of money,” says Dr. Joseph Lawler, who runs hedge fund JFL Capital Management, which is shorting, or betting against, Gilead.

Gilead’s company spokesman said the drug company hasn’t yet set a price for remdesivir.

“At this time, we are focused on ensuring access to remdesivir through our donation,” he said. “Post-donation, we are committed to making remdesivir both accessible and affordable to governments and patients around the world.”

Dr. Luciana Borio, who was director for medical and biodefense preparedness at the National Security Council, argues that smaller, private companies may emerge with the most effective treatments, not publicly traded companies, another challenge for investors.

“For technology that’s truly innovative and disruptive there’s opportunity for funding and interest in partnerships,” she says.

Some investors are focusing on treatments that may help those who are sick but also can prevent people from getting the virus, a larger potential market. These investors are betting on therapies that use antibody proteins generated by the body’s immune system. These antibodies may be able to block the action of the coronavirus’s “spike” protein, preventing the virus from infecting healthy cells.

Mr. Edelman, of Perceptive, owns shares of Regeneron Pharmaceuticals Inc., a leader in antibody therapies. The company is using a “monoclonal” antibody approach, where scientists select the most powerful antibodies from recovered coronavirus patients—or, in the case of Regeneron, from mice that have been given human immune systems—clone them, and turn them into drugs.



Regeneron plans clinical trials in early summer and is preparing to manufacture hundreds of thousands of doses each month beginning in late summer.

Robert Nelsen, who helps run venture-capital firm Arch Venture Partners, which made early and successful bets on cancer immunotherapy, is backing VIR Biotechnology Inc., which plans trials for its own monoclonal antibody therapy this summer.

“I’m pushing them every day,” Mr. Nelsen says. “We don’t know if the virus will be weaker or stronger or the same in the fall, but in 1918 it came back stronger, so we have to be prepared.”

Regeneron shares are up 52% this year, adding $23 billion in market value, while VIR is 148% higher and has added $2.3 billion in value. Some investors say if a vaccine is discovered it could limit these shares’ potential. Mr. Nelsen counters that it could take longer than expected for researchers to find vaccines, creating a huge market for antibody treatments.

“Vaccines are never 100% effective,” he argues, “so antibody therapeutics may be key to preventing a re-emergence.”

One high-risk, high-reward strategy: Buying shares of tiny companies with potential upside. Messrs. Edelman and Nelsen hold big chunks of ownership in VBI Vaccines Inc., an unproven biotech company claiming an experimental vaccine approach. The stock closed at $2.07 on Thursday.

Forecasting a winning vaccine is perhaps even harder than predicting coronavirus treatments. By some measures, Chinese companies and a group at Oxford University are in the lead. Some companies say they will distribute a vaccine they develop at cost, potentially reducing profits for others. Still, the potential market is huge—some investors believe a combination of vaccines may be necessary to meet global demand, perhaps a low-cost option for younger, healthier individuals and a more potent one for those who are immune-compromised.

Moderna Inc. has attracted the most excitement among vaccine makers, sending its stock soaring 230% this year, as it moves through human trials. Moderna’s strategy is to produce a vaccine using the virus’s genetic sequence, rather than its actual genetic material. It uses programmed material, called messenger RNA, or mRNA, with the goal of directing a patient’s immune system to produce antibodies to the coronavirus.

The approach, which may be able to produce a vaccine quickly, was described as “impressive” by Dr. Anthony Fauci, director of National Institute of Allergy and Infectious Disease. Pfizer and Germany’s BioNTech are working on their own mRNA vaccine.

But analysts note that mRNA technology is expensive and has never produced an approved medicine or vaccine. Moderna is already worth $24 billion, up from $6.5 billion at the beginning of 2020. As for Pfizer, the company already is worth $211 billion, so it isn’t clear how much a vaccine would increase the company’s value.

Some investors are skeptical of some of the highest-flying coronavirus stocks. Mr. Lawler of JFL Capital is shorting Inovio Pharmaceuticals Inc., a small Pennsylvania company that’s up 314% this year despite limited past success.

A spokesman for Inovio says it is in phase one trials for a Covid-19 vaccine and expects results in June, while working on other medicines.

“The general public is throwing money at headlines,” says health-care investor Brad Loncar at Loncar Investments.



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Day Trading: Top 3 Things To Watch For May 15

It was quite a comeback for the Dow today as investors finally decided to dip back into financial stocks. Bulls will hope that the same sentiment that was able to shrug off a rise of 3 million in jobless claims today will be on hand tomorrow, with more devasting data expected.
Here are three things that could move the stock market.


1. Consumer in Focus
Retailers without a big online presence will be hoping measures to reopen across the country will start paying dividends quickly. The market will get see what is expected to be another historically band month for sales. The Commerce Department will report the April retail sales figures at 8:30 AM ET (12:30 GMT).

Economists expect that retail sales plunged 12% last month, according to forecasts compiled by Investing.com. That would be the biggest drop ever, taking the top spot from March’s dive of 8.4%. Core retail sales, which exclude autos, are forecast to have dropped 8.6%, compared with a 4.2% drop in March. There will be more shopping data when the University of Michigan issues its preliminary measure of May consumer confidence at 10:00 AM ET.

The consumer sentiment index is seen dropping to 68 from 71.8 in April. That would still be well off the lows seen during the Financial Crisis and the early 1980s. And the Michigan consumer expectations index is forecast to tick up to 71.8 from 70.1 last month.


2. JOLTS, Empire Manufacturing on the Cards
Along with indicators on retail there will be numbers on the labor market and manufacturing. At 10:00 AM ET (14:00 GMT), the Labor Department will release its March Job Openings and Labor Turnover Survey (JOLTS). Job openings, voluntary quits and hires will likely have dropped sharply.


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At 8:30 AM ET, the New York Fed will release its measure of manufacturing in the region. The May Empire State Manufacturing Index is seen coming in at -63.50, up slightly from -78.20 in April. And at 9:15 AM ET, April numbers on industrial production and capacity utilization arrive.


3. Oil Rig Count Likely to Dip Again
Oil prices settled higher thanks to some optimism on demand from the Paris-based International Energy Agency (IEA). The specter of negative prices has receded as a drop in total U.S. crude stockpiles and inventories as the Cushing, Okla. hub eased the pressure of storage constraints.

Investors will get another glimpse of how production is faring tomorrow when Baker Hughes issues its measure of rig activity. Last week the oil rig count dropped to 292, the first time it had fallen below 300 since the Great recession.





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COVID-19 to Cause 17% Unemployment in June

U.S. unemployment is expected to hit 17% in June as the economy contracts due to efforts to contain the coronavirus pandemic, economists predicted, and the economy is expected to start rebounding in the second half of the year.

A monthly Wall Street Journal survey found economists expect gross domestic product to shrink 6.6% this year, measured from the fourth quarter of 2019, a downgrade from the 4.9% contraction economists predicted in last month’s survey. While economists expect a deeper contraction in the second quarter, a majority—85%—continue to expect the recovery will start in the second half of the year. They predict an annualized growth rate of 9% in the third quarter, up from 6.2% in the prior survey. Growth is expected to clock in at 6.9% in the fourth quarter, up slightly from last month.


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“The trough will occur in May or June, with activity starting to pick up,” said Chad Moutray, chief economist for the National Association of Manufacturers. “With that said, growth will remain well below pre-recessionary levels likely until at least 2022.”

Business and academic economists in this month’s survey expect, on average, that gross domestic product will contract at an annual rate of 32% in the second quarter. That represents a worsening from the April survey of economists, when they expected GDP to shrink 25% from April to June. The annualized rate, however, overstates the severity of any drop in output because it assumes that one quarter’s pace continues for a year.

In the May survey, 68.3% of economists said they expect the recovery to be shaped like a “swoosh.” Named after the Nike logo, it predicts a large drop followed by a gradual recovery. The survey results echo recent comments by corporate executives.

As states start to loosen stay-at-home orders, economists were split on whether this is the right moment to do so. Some 29.8% said the reopening measures are happening at the right time. 14% said such measures were overdue, while 31.6% described it as too soon. Just under a quarter, 24.6%, were unsure whether the timing is right.

“In the absence of a vaccine or some therapeutic drug, opening the economy now would certainly trigger a spike in new infections and will be followed by economic shutdown 2.0,” said Bernard Baumohl, chief global economist at The Economic Outlook Group, who currently views the reopening as premature.

Federal Reserve Chairman Jerome Powell received good grades for his performance as Fed chair during the coronavirus pandemic, with 71.9% of economists assigning him an A grade, while 24.6% gave him a B. Just 1.8% gave him a C and F respectively.



“Like a good engineer, [Mr. Powell] opened the floodgates to drain the reservoir in advance of an impending flood of demand for liquidity,” said Georgia State University economist Rajeev Dhawan.

The grades marked an improvement from December, when 63.8% of economists gave Mr. Powell a B. Seventeen percent assigned him an A grade and 14.9% gave him a C.

To fight the coronavirus pandemic, U.S. central-bank officials cut rates to near zero, purchased huge quantities of government debt and began lending to American businesses.

Those purchases of debt are expected to get bigger. Economists project the central bank’s portfolio of bonds, loans and new programs will swell to $7.74 trillion in June from less than $4 trillion last year. The portfolio stood at $6.72 trillion on May 4.

Economists see the Fed’s balance sheet swelling to $9.29 trillion by December, $9.63 trillion by December 2021 and $11.27 trillion by December 2022. In that range, the portfolio would be more than twice the size reached after the 2007-09 financial crisis.



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Stock Markets Fell on Thursday as Worries Grew About a Second Wave of Coronavirus Infections

Stock markets fell and bonds were in demand on Thursday as worries grew about a second wave of coronavirus infections and a dour assessment from the head of the U.S. Federal Reserve dashed hopes for a quick economic recovery.

“The path ahead is both highly uncertain and subject to significant downside risks,” Fed Chair Jerome Powell said in a webcast speech.

He warned of a recession worse than any since World War Two, and called for additional fiscal spending to stem the fallout from the pandemic – a pointed comment from a central banker who has avoided giving advice to elected officials.



New outbreaks in South Korea and China were cause for concern, even as more countries begin to re-open their economies after lengthy lockdowns.

European stock futures were down, and every market in Asia fell. Bonds and the dollar held ground won overnight.

FTSE futures (FFIc1) and EuroSTOXX 50 futures (STXEc1) dropped about 0.5%, while futures for the S&P 500 (ESc1) struggled to lift much above flat.

MSCI (NYSE:MSCI)’s broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 1%.

“We don’t think the market is going to re-test the lows, but it’s probably seen its best also, so I’m expecting a correction,” said Tony Huntley, chief investment officer at Melbourne-based fund manager Adansonia Capital.

“The issue is whether we get a second wave (of infections) … that would be my greatest fear.”

China has re-imposed movement restrictions near its borders with North Korea and Russia after a new outbreak was detected there and South Korea is working to contain an outbreak centred around bars and nightclubs in Seoul.

“It is important to put this on the table: this virus may become just another endemic virus in our communities, and this virus may never go away,” WHO emergencies expert Mike Ryan told an online briefing on Wednesday.

Bonds and the dollar rallied after Powell talked down the prospect of negative interest rates in the United States, and extended gains on Thursday. Yields on benchmark U.S. 10-year Treasuries (US10YT=RR) fell slightly to 0.6395%.

A surprise drawdown of U.S. inventories helped oil prices make meagre gains, but the bleak outlook capped rises.

Gold pulled back from a one-week high hit early in the Asian session, but held comfortably above $1,700 an ounce at $1,711.20.

Markets are looking ahead to the release of the European Central Bank’s latest economic bulletin at 0800 GMT and the latest U.S. jobless claims data at 1230 GMT.

SLOW GOING…

Equity markets have wavered since April’s rally as investors and authorities try to weigh the risks of re-starting economies quickly against the financial ruin that lockdowns have wrought, while worrying about a flare-up infections.

Australian jobless data bought the latest sign of doom, with a record plunge in employment dragging the currency to a one-week low of $0.6420.

Already bleak expectations and strong demand for Aussie bonds kept it from steeper falls. In the United States, the Trump Administration is pressing on with re-opening plans despite urgings of caution from medical experts.

“We’re going to slowly open the economy,” U.S. Treasury Secretary Steven Mnuchin told Fox News on Wednesday.

“But there is also a risk that we wait too long, there is a risk of destroying the U.S. economy and the health impact that that creates.”

Caution is also prevailing in Europe and the Antipodes, where restrictions are beginning to relax. “Global markets are still licking their wounds, and while equities remain robust, gains are slowing,” said Societe General FX strategist Olivier Korber.

“A second pandemic wave is unfortunately not a tail risk, so the full extent of the economic damage may be underestimated,” he said, recommending a long position in euro/kiwi (EURNZD=) which has gained nearly 9% this year as market volatility has increased.


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Elsewhere a strong greenback pushed the kiwi to a three-week low of $0.5968 and had the euro and pound under pressure. Brent crude (LCOc1) firmed slightly to $29.36 per barrel and U.S. crude (CLc1) was up 1% at $25.58 per barrel.



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Federal Reserve Warns Of A Possible Sustained Recession From Pandemic

Federal Reserve Chair Jerome Powell is warning of the threat of a prolonged recession resulting from the viral outbreak and is urging Congress and the White House to act further to prevent long-lasting economic damage.

The Fed and Congress have taken far-reaching steps to try to counter what is likely to be a severe downturn resulting from the widespread shutdown of the U.S. economy. But Powell warns that there still could be widespread bankruptcies among small business and extended unemployment for many people.


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“Deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy,” the chairman says in prepared remarks before an online discussion with the Peterson Institute for International Economics. “Avoidable household and business insolvencies can weigh on growth for years to come.”

The U.S. government “ought to do what we can to avoid these outcomes, and that may require additional policy measures,” Powell says.



He says the Fed will “continue to use our tools to their fullest” until the viral outbreak subsides but gives no hint of what the Fed’s next steps might be.

Powell repeats his previous warnings that the Fed can lend money to solvent companies to help carry them through the crisis. But a longer downturn could threaten to bankrupt previously healthy companies without more help from the government.


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Greater support from government spending or tax policies “could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” he says.



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Economic Indicators – Coronavirus Lockdowns Trigger Big Drop in Consumer Prices


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The coronavirus pandemic pushed down April consumer prices by the most since the last recession as efforts to contain the virus disrupted demand for energy, travel, clothing and other goods and services.

The Labor Department said the consumer-price index fell by 0.8% last month, the second month in a row prices have eased since the pandemic reached the U.S. and the biggest drop since 2008. Business closures and stay-home orders aimed at containing the virus have created cheap oil, and falling prices for air travel, clothing, car insurance and other goods and services.

Excluding the volatile food and energy categories, so-called core prices decreased 0.4%, the largest monthly drop in records dating to 1957. While the month-to-month drops in inflation notched records, annual prices only reached the lows of the last expansion. Overall prices were up 0.3% from a year earlier, the lowest since 2015, and core prices were 1.4% higher from a year ago, the lowest since 2011.

Economists expect the decline in prices to be short-lived, with costs firming up as the U.S. reopens its economy and demand increases. Most don’t think the U.S. is likely to see price softness turn into a worst-case scenario as an extended period of deflation—when there are so many idle economic resources that businesses and workers are forced to lower prices and wages to generate demand for their goods and services.



“With economic activity beginning to open up, even if in a halting manner, while prices may slip further, they are unlikely to do so to nearly the extent seen in April,” said Richard Moody, chief economist at Regions Financial Corp.

A weak economy and softening inflation has had some investors betting the Federal Reserve will turn to negative interest rates to help boost growth. But some central bank research shows negative rates, adopted in other countries, have pushed inflation expectations lower, and Fed officials have concluded the tool’s costs outweigh uncertain benefits.

The Fed’s preferred inflation gauge is the personal-consumption expenditures price index, which has tended to run a little cooler than the CPI. The two generally move in the same direction, though measurement differences might produce a larger difference than usual now.

Lately, energy prices are the biggest drag on both. The Labor Department’s index for gasoline prices tumbled 20.6% in April from the prior month.

As recently as January, a barrel of U.S. oil cost more than $60. On April 20, U.S. crude futures for delivery the following month fell below $0 a barrel for the first time in oil market history. The coronavirus killed demand for fuel. A price war between Saudi Arabia and Russia alongside broad overproduction added to the oil glut.

One area where the pandemic is pushing prices higher: food.

The price index for food at home posted its largest monthly increase since February 1974. Americans stocked up at the pandemic’s outset. Since then, outbreaks have forced meat-processing plants to close and otherwise snarled supply chains. The April price index for meats, poultry, fish and eggs increased 4.3% from a month earlier.

Fed officials will look past oil markets and food costs to focus more on core prices. At least for now, coronavirus-related developments are pushing those lower. Indexes for apparel, auto insurance and airfares all posted their largest monthly declines on record.

“The fallout from the coronavirus has a large disinflationary effect on prices due to the large demand shock, plunge in oil prices, and strong dollar,” said Kathy Bostjancic, an economist at Oxford Economics. “A surge in inflation is the least of our worries.”

One reason deflation may not become an issue is government action to limit the impact of the virus’s disruption. The Fed and U.S. Treasury are pumping trillions of dollars into the economy, and many economists expect a sharp, short recession followed by a slow recovery.

A New York Fed survey out Monday found consumer inflation expectations for the next year and three years increased slightly—both now stand at 2.6%. “Respondents, however, increasingly disagree about the future path of inflation,” the survey said.

The market outlook appears less anchored. Yield movements in the Treasury inflation-protected securities, or TIPS, market show that compensation for inflation expected in five years, after the temporary impact of lower oil prices has faded, fell sharply in March before rebounding slightly, albeit at historically low levels.

Fed officials believe that consumer and market expectations for inflation affect behavior, becoming almost a self-fulfilling prophecy.

Another, longer-term concern is that large amounts of government borrowing and rising costs of doing business could push inflation uncomfortably high. Low rates and government deficits spurred consumer-price inflation after World War II and during the 1970s.

But with the loss of 20.5 million jobs and unemployment hitting a post-World War II high in April, the focus is more immediately on building a fiscal and monetary bridge until the coronavirus is contained.


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“In the near term it’s more likely, we think here at the Dallas Fed, we’ll have disinflation,” Dallas Fed President Robert Kaplan said earlier this month. “That’ll be in the shorter run, the next year or two. I do worry about, as we get back over the next few years to full capacity, with some of this stimulus and the size of the Fed’s balance sheet, do we start creating inflationary pressures? But that’s not going to be for two or three years.”





Oil Prices Boosted By Saudi Arabia Pledge To Deepen Output Cut

Oil futures rose on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June in a bid to help drain the glut in the global market that has built up as the coronavirus pandemic crushed fuel demand.

Brent crude (LCOc1) futures advanced 0.5%, or 15 cents, to $29.78 at 0500 GMT, after hitting an intraday high of $30.11 a barrel.

U.S. West Texas Intermediate (WTI) crude (CLc1) futures were up 1%, or 26 cents, at $24.40 after touching an intraday high of $24.77.


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Saudi Arabia said overnight it would cut production by a further 1 million barrels per day (bpd) in June, slashing its total production to 7.5 million bpd, down nearly 40% from April.

“This reduction in production provided excellent optics encouraging other OPEC+ members to comply and even offer additional voluntary cuts, which should quicken the global oil markets’ rebalancing act,” Stephen Innes, chief global market strategist at AxiCorp, said in a note. OPEC+ is a group comprised of members of the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia.

The United Arab Emirates and Kuwait committed to cut production by another 180,000 bpd in total. Kazakhstan has also ordered producers in large and mid-sized oil fields including Tengiz and Kashagan to cut oil output by around 22% in the May to June period.

Still, the moves to deepen cuts raised questions for some about why the further cuts were needed.

“It was so sudden and so significant, it was just seen as: ‘Is this a proactive policy or just a reaction to weak demand?'” said Vivek Dhar, Commonwealth Bank’s mining and energy economist.



The cuts, combined with the world’s biggest economies relaxing coronavirus restrictions and stoking a gradual recovery in fuel demand, are expected to ease pressure on crude storage capacity.

However, in the wake of new outbreaks of the coronavirus, including in China and South Korea, the market is wary of a second wave of COVID-19 cases spurring renewed lockdowns.

Data showing China’s April factory prices fell at the sharpest rate in four years also added to investor jitters as it revealed weak industrial demand.

“On the demand side there’s probably a view that the worst may be behind us, in terms of the peak damage point. If we do see a second wave, that would hurt demand and hurt pricing,” said Commonwealth Bank’s Dhar.

Inventory data this week will be key to extending the recent rally in oil prices, analysts said.


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U.S. crude inventories likely rose by about 4.3 million barrels in the week to May 8, a preliminary Reuters poll showed, ahead of reports from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday.



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International Energy Agency Forecasts The Biggest Decline In Electricity Consumption Since The Great Depression

Pandemic Sparks Slump in Electricity Prices.



Wall Street trading floors have emptied. Spring has arrived north of the equator. Oil and gas markets have cratered. The result is a precipitous decline in electricity prices in the U.S., Europe and parts of Asia.

Closures of office blocks, shops and factories have throttled power demand, dwarfing the amount of electricity required to work from home. Globally, the International Energy Agency expects the biggest decline in electricity consumption since the Great Depression. It is as if Germany and France were both turned off for the year.

In the U.S., the drop has been most severe in New York City, center of the nation’s epidemic and home to a services sector that usually devours electricity. Wholesale power prices averaged $16.57 a megawatt-hour in the first six days of May, according to S&P Global Platts, down by more than a quarter from the start of the 2020.

Electricity trades in much the same way as raw materials like oil. In much of the U.S., power-plant owners sell electricity to utilities in a competitive wholesale market overseen by regional operators. Utilities then distribute power to customers. Both power companies and utilities protect themselves against price swings with futures, which investors use to bet whether the market is going up or down.

A key difference between electricity and oil is that power is hard to store. When there is too much to go around, particularly on windy days in places like Northern Europe, producers sometimes pay to give power away. U.S. crude futures behaved like electricity when storage space for oil dwindled in April, dropping below $0 a barrel for the first time.

In Europe, negative electricity prices have become commonplace. In auctions for the joint Germany-Luxembourg market on the European Power Exchange, prices turned negative five times in the year through April, more than all of 2019.

The crunch is shifting the math of electricity production in favor of renewable energy sources. Coal plants, among the costliest to run in the U.S., typically deliver bursts of power to the grid when demand increases. Much of that electricity isn’t needed right now. Forty percent of the world’s electricity could be generated from low-carbon sources—nuclear, wind and solar power, plus other renewables—this year, according to the IEA. That would be the highest level on record.



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Electricity prices were falling before the pandemic due to a surfeit of cheap natural gas, said Paul Cusenza, chief executive of Nodal Exchange, which runs a market for power futures. A 30% drop in U.S. gas prices over the past year—accelerated by the recent crash in energy markets—has pushed electricity prices down.

“Less demand, more low-cost generation and cheap gas,” said Dan Eager, principal analyst for European power at Wood Mackenzie. “You add that together and you have very, very low prices.”

Electricity takes an intricate route from the station where it is generated to the device it powers, hurtling down a 160,000-mile network of high-voltage cables that crisscross the U.S. before traveling to consumers along one of millions of low-voltage lines.

Wholesale prices are largely set a day ahead of time. Regional authorities forecast how much electricity will be needed at every hour the following day, based on factors like the weather. Producers bid to generate that power. Smaller trades take place on the day itself, fine-tuning supply to meet demand.

A bump in prices that takes place each weekday morning as New York City gets to work now comes an hour later, and is less pronounced, because offices aren’t opening at the same time. The city’s electricity prices were less than half their average for the time of year at the end of April, according to Nodal Exchange.

Electricity usage has started to creep higher in states that are relaxing restrictions. Still, mainland U.S. demand was 5% lower in early May than it would have been without quarantine measures, said Platts analyst Manan Ahuja.

The world will consume 5% less electricity this year than in 2019, the IEA forecasts. That is eight times the size of the decline that took place during the 2009 financial crisis. It equates to more than 1,000 terawatt-hours in lost demand, enough to power France and Germany combined.

Electricity prices normally fall in spring, before rising when air conditioners are turned on for the summer. The coronavirus shutdown has exacerbated that seasonal slump, slashing New York City’s electricity demand by 14%, according to the New York Independent Service Operator, which runs the state grid.


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“There’s still a very, very large number of [coronavirus] cases in New York City,” said Richard Dewey, president and chief executive of the NY-ISO. “I don’t anticipate the demand going up very much, at least not measurably, for probably a few weeks.”




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Global Economic Downturn – Today’s Downturn Is Comparable In Scale To That Of The 1930s

News stories often describe the coronavirus-induced global economic downturn as the worst since the Great Depression. This is likely to be literally true. Yet for many, the comparison does more to terrify than clarify. Economists say there is likely to be a big difference between a downturn that is the worst since the Depression and conditions as bad as the Depression.

“I don’t find comparing the current downturn with the Great Depression to be very helpful,” said former Federal Reserve Chairman Ben Bernanke, who has studied that 1930s era. “The expected duration is much less, and the causes are very different.”

The trajectory of the pandemic and economy remains uncertain. How quickly health officials can contain the crisis, how much the public will cooperate and whether policies will spark a swift recovery remains to be seen. Even so, many economists find a scenario rivaling the Great Depression in severity and duration hard to imagine.

“The breakdown of the financial system was a major reason for both the Great Depression and the 2007-09 recession,” Mr. Bernanke said. Today, however, “the banks are stronger and much better capitalized.”

By most estimates, the current downturn is likely to be comparable in scale and duration to that 2000s recession and the other major post-World War II recession, in the early 1980s.



Comparisons with the Depression are difficult because most of the data sets collected today didn’t exist in the 1930s. But some rough measures are available, including global trade tallies from the League of Nations, Federal Reserve data on factories and Works Progress Administration records on joblessness.

In the 1930s, industrial production fell by more than half. Production slowly made up ground for almost four years, only to decline sharply again in 1937-38. By contrast, production declined by about 15% in 2007-09 and 10% in the early 1980s.

When the coronavirus hit, industrial production had already been dipping as a result of the recent trade wars. While many factories closed as consumer demand shrunk, some are rapidly retooling. Auto makers General Motors Co. and Ford Motor Co., for example, have switched from making cars to ventilators. Medical-supply factories are struggling to keep pace with demand.

From 1929 to 1933, the economy shrank for 43 consecutive months, according to contemporaneous estimates. Unemployment climbed to nearly 25% before slowly beginning its descent, but it remained above 10% for an entire decade.

That compares with a 16-month decline in the early 1980s and an 18-month fall from 2007 to 2009. This time, many economists believe a rebound could begin this year or early next year if the virus is sufficiently contained.

While unemployment in the U.S. hit 14.7% in April and is likely to rise further, the blow today is softened by safety-net programs such as unemployment insurance.

“Many people are suffering now, and the economy won’t recover in only a quarter or two,” Mr. Bernanke said. “But if we’re able to get reasonable control of the virus, the economy will substantially recover, and this downturn should be much shorter than the Great Depression.”

The second quarter of 2020 is likely to be the worst ever for many economies. The median estimate of economists surveyed by The Wall Street Journal calls for a decline of 25% at an annual rate in the U.S. Some estimates are closer to 50%.

But annualized rates can be misleading. They assume that one quarter’s pace continues for a year. If 10% of the economy shuts down for one quarter, that would be considered a 40% decline at an annual rate.



“We’ve had this very abrupt, very sharp, immediate reduction in economic activity, driven by government policies to shut down economies. And because it’s very abrupt, the numbers are astronomical,” said Douglas Irwin, a professor at Dartmouth College who has studied U.S. trade policy during the Depression.

By contrast, he said, “The way the world evolved into the Great Depression was a slow and steady decline. It was a slow strangulation of the economy.”

As in the Depression, today’s collapse is global. But the scale is smaller, Gita Gopinath, chief economist at the International Monetary Fund, said in a briefing last month. The IMF estimates the world economy shrank about 10% during the Great Depression, versus an expectation of about 3% this year and an expected return to growth next year. Advanced economies shrank about 16% in the Depression, compared with about 6% forecast for this year.

A series of severe policy mistakes around the world exacerbated the length and severity of the Great Depression. Central banks tightened monetary policy to maintain the gold standard, which no longer exists. The result was severe deflation, which increased the value of debt and lowered incomes.

Governments also initially cut spending in reaction to declining revenue. And as economies deteriorated, countries raised trade barriers in an effort to protect their domestic industries. The result, though, was a global contraction in demand, which only deepened the depression.

This time, central banks around the world quickly slashed interest rates and deployed programs to prop up credit markets. Governments approved massive spending measures, including the roughly $2 trillion stimulus in the U.S., to help keep businesses afloat and protect jobs. And they haven’t raised trade barriers in response to the pandemic.

“I’m not going to say that everything in the policy is right, but we understand that delay worsens the economic outcomes,” said Catherine Mann, global chief economist at Citigroup.



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Financial Markets – Top 5 Things To Watch This Week

This week’s economic calendar is packed with data which will further demonstrate the extent to which the coronavirus pandemic has hit global growth. The U.S. is set to publish figures on retail sales and industrial production for April, while the UK and Germany are to release data on first quarter GDP.

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The data will fuel the debate on whether a rebound in the U.S. stock market is justified amid an unprecedented slowdown. Trade threats by U.S. President Donald Trump against China continue to be a source of worry for investors at a time when large swathes of the economy are at a near-standstill. Meanwhile, bitcoin is due to undergo the third halving in its 11-year history this week. Here’s what you need to know to start your week.


U.S. data to underline steep drop-off in economic activity
Data on U.S. retail sales and industrial production for April due on Friday will further highlight the effect of closures on sales and factory output. Economists are expecting retail sales to have tumbled 11.6%, surpassing the record drop of 8.4% in March. Industrial production, which slipped 5.4% in March, is forecast to fall 11.5%.

There will also be numbers related to consumer sentiment and inflation while Thursday’s weekly report on initial jobless claims will cover the eighth week since widespread lockdowns came into effect. Last Thursday’s report showed that claims topped 3 million for a seventh straight week, but were off the peaks of 6.8 million seen in the week ended March 28.

Investors will also be watching a speech on Wednesday by Federal Reserve Chairman Jerome Powell on current economic issues at a webinar organized by the Peterson Institute for International Economics.

Trump’s trade threats
U.S.- China trade tensions look set to continue to simmer after Trump told Fox News Channel on Friday that he was “very torn” about whether to end the Phase-1 trade deal with China.

Trump’s administration is weighing punitive actions against Beijing over its early handling of the coronavirus outbreak, including possible tariffs and shifting supply chains away from China.

Trump has said he would terminate the trade deal if China fails to meet its purchase commitments. He said on Wednesday that he would know within a week or two whether that was possible.

The deal, which calls for Beijing to boost its purchases of U.S. goods by $200 billion over two years, only took effect on Feb. 15 as the coronavirus pandemic was unfolding. Lockdowns aimed at stemming the spread of the virus dealt a sharp blow to the Chinese economy and it is just now starting to recover.



UK and German GDP to show initial virus impact
First quarter GDP numbers from the UK and Germany will give investors an initial sense of the economic fallout from the lockdowns which began in late March.

The UK economy is expected to contract 2.5%, but the full damage, taking in the second quarter, will be much worse. The Bank of England said last week it expects the UK economy to fall by 14% this year, its worst annual slump for more than 300 years, and the unemployment rate to reach 8% as the coronavirus crisis ravages the economy.

Meanwhile, the euro zone’s largest economy Germany is expected to shrink 2.1% in the three months to March and the government has said it expects an annual contraction of 6.3% this year, which would be the most since World War II.

Divide between U.S. stock market, economy to widen
Recent economic data pointing to historic drops in activity is concerning to investors who worry that unprecedented stimulus from the Federal Reserve and U.S. government have led markets to shrug off the economy’s massive slowdown.

The Labor Department reported Friday that the U.S. economy lost a staggering 20.5 million jobs that month, the steepest plunge since the Great Depression.

If economic data this week is worse than the already awful forecasts it could bolster the argument that the rally in stocks has gone too far. But it is too early to say whether it will derail a surge which saw stocks post their best monthly gain in three decades in April, despite weak economic data from the previous month.

Recent gains could fade if U.S. states need to unwind efforts to reopen their economies and unemployment fails to decline in coming months.

Bitcoin’s third ‘halving’
Investors are widely anticipating Tuesday’s bitcoin halving, the third in the digital currency’s 11-year history. The previous two bitcoin halvings propelled massive rallies in bitcoin’s market value, but there is a wildcard this time in the form of the coronavirus pandemic, some analysts said.



“From an efficient market perspective, any fundamental reaction to the halving should be heavily priced in at this point; after all, it’s hard to imagine a more predictable event than an unalterable supply reduction that has been scheduled for more than a decade in a liquid, heavily-traded … asset,” said Matt Weller, global head of market research at GAIN Capital.

Bitcoin’s technology was designed in such a way that it cuts the reward for miners in half every four years, a move meant to keep a lid on inflation.

In the run-up to this week’s halving, bitcoin had surged almost 40% since the beginning of the year and climbed more than 80% from its lows.



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The Mortgage Market Never Got Fixed After 2008. Now It’s Breaking

Many mortgage companies are nonbanks that don’t have deposits or other business lines to cushion them amid the coronavirus pandemic.

Ann Winn called her mortgage company to see about pausing payments in late March, soon after she had to shut down the salon she owns in a suburb of Austin, Texas.

What followed, she said, were hours of tense calls and emails with Freedom Mortgage Corp. The company agreed to let her skip a few payments—but only if she would repay them all in a lump sum this summer. Ms. Winn didn’t know when she would be back at work, so she declined.

“I’m just not going to pay my other bills,” she said, “because I don’t want to lose my home.”

The coronavirus pandemic has delivered a gut punch to the economy and the mortgage market is particularly exposed. The virus has forced millions of homeowners to suddenly stop making payments. At the same time, many mortgage companies aren’t built to handle an economic collapse or help their customers through it.



Many of them are nonbanks that don’t have deposits or other business lines to cushion them, and they have raised concerns that fronting payments for struggling borrowers such as Ms. Winn will quickly drain them of capital.

Years ago, the financial crisis revealed the folly of churning out “liar loans.” Regulators cracked down, and mortgages made today are generally more conservative. What regulators didn’t focus on was the strength of the mortgage companies themselves. Though the loans are sturdier, the infrastructure largely didn’t change.

Over the past decade, the business of originating and servicing mortgages has moved back toward nonbanks such as Freedom Mortgage. Nonbanks made 59% of U.S. mortgages last year, the highest level on record, according to industry-research group Inside Mortgage Finance. They also made a large proportion of U.S. mortgages before 2008 but many went bust when the crisis hit.

Many nonbanks, like United Wholesale Mortgage and loanDepot.com LLC, are barely known outside the industry but dominant inside it. Quicken Loans Inc., one of the few with wide name recognition, ranked as the largest mortgage lender by originations for the first time this year, elbowing out Wells Fargo and JPMorgan Chase.

As big banks have refocused their mortgage operations on wealthier borrowers, nonbanks have stepped into the void, often representing the only path to a mortgage for buyers of lesser means. Their retreat could lock many would-be borrowers out of homeownership and make it harder for the economy to bounce back.

Nonbanks also have expanded in the crucial business of servicing mortgages. They now service roughly half of them, five times their share from a decade ago, according to the Urban Institute.


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In good times, that task involves collecting payments from borrowers and handing them to investors that own the loans, plus handling odds and ends such as taxes. In exchange, the servicer gets a slice of the interest. In bad times, servicers are supposed to create new payment plans for struggling borrowers, which takes much more work and expense. When all else fails, servicers initiate foreclosures.

For years after the crisis, regulators, mortgage executives and consumer advocates discussed how to improve this market. They floated ideas about changing the way servicers are paid so they collect a bigger fee when a loan becomes delinquent. They also considered having the servicers fund a central utility to handle defaulted mortgages. But those ideas never gained much traction, according to people involved.

“There was a big focus on the consumer experience,” said Michael Bright, the former head of government mortgage corporation Ginnie Mae, which backs Federal Housing Administration loans. “But there wasn’t much focus on the quality of a servicer.”

The structure of the U.S. mortgage market is much the same as it was before the crisis. Pools of mortgages are packaged and sold to investors around the world. When a borrower stops paying, servicers are caught in the middle, forced to front payments to the investor, even though they aren’t receiving money from the borrower.

The servicer will eventually get reimbursed if the mortgage is one of the roughly two-thirds guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. But that is a slow process and in some cases can take years.



Lawmakers recently outlined how struggling borrowers can request so-called forbearance plans, by which they pause their monthly payments. If the mortgage is government-backed, then companies are generally supposed to grant the request.

That has thrust both banks and nonbanks into the position of cushioning the blow for their customers. Nonbanks, which depend on short-term bank loans to fund their daily operations, are struggling to do so.

“This is a systemic problem,” said Karan Kaul, a senior research associate at the Urban Institute.

About 7.5% of borrowers had obtained forbearances as of April 26, according to a survey by the Mortgage Bankers Association, or MBA. That means about 3.8 million homeowners are skipping their monthly payments with permission.

If forbearance rates reach the mid-to-high teens, few servicers are expected to have the cash to meet their advance obligations, according to Warren Kornfeld, who covers nonbank mortgage companies at Moody’s Investors Service. As a result, many are now trying to gain access to additional cash.

Mortgage servicers, both banks and nonbanks, were on the hook for about $4.5 billion a month in servicing advances on government-backed loans because of forbearances as of Thursday. That is roughly 25 times more than they were on the hook for at the end of February, according to Black Knight Inc., a mortgage-data and technology firm.

Ms. Winn and her husband bought their Leander, Texas, home in 2014 using the FHA loan program, which is meant for first-time and modest-income buyers. Later, they learned their lender had passed the servicing rights to Freedom.



Ms. Winn had little interaction with Freedom until calling in March. A representative told her she could skip payments for April, May and June, but would then have to pay four months all at once. Another representative told her that she could later ask to tack the missed payments onto the end of the loan, but that there was no guarantee she would be approved.

In late April, she received a letter saying she had been automatically opted into the first plan. She intends to keep making her monthly payments anyway, since she doesn’t want to pay for four months at once.

Chief Executive Stanley Middleman said in a statement that Freedom is “managing a great deal of unplanned activity” but plans to fix any issues that arise.

“We are doing the best we can and will continue to do so,” Mr. Middleman said.

The stimulus bill provided little detail on when borrowers would have to make up deferred payments. But the regulator that oversees Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that back conventional loans, clarified recently that its homeowners won’t have to make up their missed payments all at once. The FHA program has made similar comments.

Industry representatives say that forbearance plans were rolled out on a vast scale very quickly, which led to confusion among both servicers and borrowers. Bob Broeksmit, CEO of the MBA, acknowledged that there have been issues between servicers and borrowers but said that recent guidance is likely to bring more clarity.

The borrowers the nonbanks serve are often the ones that most need help. Last year, nonbanks made 86% of FHA mortgages. As of Thursday, roughly 13% of FHA loans had forbearances, according to Black Knight.


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Nonbanks say they have spent significant time bolstering their businesses for a downturn. Some said in recent earnings reports that they now expect the coronavirus fallout to be smaller than they initially feared. Still, Ginnie Mae has set up a lending facility to help companies that are out of options. Fannie Mae and Freddie Mac are only requiring servicers to advance four months’ worth of payments.

The health of nonbanks ultimately depends on keeping their funding. Worried about the surge in borrowers seeking relief, some banks have recently curtailed this lending.

Mortgage companies, both banks and nonbanks, are also pulling back on some lending to borrowers. Credit availability in April fell to its lowest since 2014, according to the MBA.

Lenders are cutting back in particular for borrowers with lower credit scores, according to the Urban Institute. But the contraction in credit is spreading to all types of loans—from jumbo mortgages to cash-out refinances.

Beverly Harris was in the process of buying a home in the Palm Springs, Calif., area in March when the type of unconventional loan she had been pre-approved for suddenly became unavailable.

The retiree, who has a high credit score and was planning to put 20% down, was expecting to use a loan that qualifies the borrower based on assets rather than income. She estimates she checked with 15 different mortgage companies and banks. All of them had stopped making those types of loans.

For now, Ms. Harris is staying put in her rental.




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Global Stock Markets Mixed As Investors Weigh Economic Reopening


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World markets were mixed as investors gauged the possible effects of easing lockdowns to combat the coronavirus.

S&P 500 futures rose 0.8% ahead of the opening bell Wednesday, while the Stoxx Europe 600 benchmark was broadly flat. China’s Shanghai Composite gained 0.6% on its first trading day since Thursday, after a five-day holiday.



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South Korea’s Kospi Composite rose 1.8%. Australia’s S&P/ASX 200 was down 0.4%. Japanese stocks will resume trading Thursday.

Caroline Yu Maurer, head of greater China equities at BNP Paribas Asset Management, said consumption inside China was showing signs of improvement, but a bigger question for investors in the country’s shares would be the pace and extent of recoveries in the U.S. and Europe.

“If overseas consumption resumes to normality in the next couple of months, then the drag on China exports can be manageable,” Ms. Maurer said.

“The direction for China equities remains murky for the next couple of quarters. The concern is whether there will be global resurgence [of the virus] in autumn and winter,” she added.

Cliff Tan, East Asian head of global markets research at MUFG Bank, said infections could resurge as lockdowns ease, but this scenario hadn’t been factored into markets much.

He said while central-bank support meant stocks were unlikely to fall back to their March lows, they could possibly approach those levels. On the other hand, he said Asian currencies could rally in the third quarter if data showed the pandemic was under control.

The Trump administration is considering disbanding the White House’s coronavirus task force, officials said, despite the virus’s spread around the country.


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The onshore Chinese yuan, resuming trading after holidays, weakened nearly 0.4% against the dollar. The WSJ Dollar Index, which tracks the dollar against 16 currencies, was unchanged, while the Japanese yen firmed 0.2% against the greenback.

Oil futures retreated slightly, after jumping Tuesday. Prices for June delivery of West Texas Intermediate, the U.S. benchmark, fell 0.65% to $24.42 a barrel. The global equivalent, Brent crude, declined 0.6% to $30.78.

The yield on the 10-year U.S. Treasury note rose to 0.662%, from 0.656% on Tuesday.




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3 Stocks To Watch In The Coming Week: Disney – General Motors – Tesla

After finishing its best month of gains in about three decades, the stock market started May on a sour note as sentiment turned negative on the worsening unemployment situation and increasing tension between the U.S. and China over the spread of coronavirus.

Millions more Americans filed for unemployment benefits last week, sending the six-week total above 30 million since the coronavirus pandemic began to shutter businesses across the country. With that huge economic cost, President Donald Trump threatened to slap tariffs on Chinese imports, blaming the Asian nation for misleading the world about the pandemic.

If Trump acts on his threat, that could again start a trade war between the world’s two largest economies, diminishing prospects for a quick economic recovery. All major U.S. benchmarks, including the S&P 500, Dow and NASDAQ, slumped about 3% on Friday.

In the coming week, we’ll still see a few big names from different sectors of the economy reporting their first-quarter numbers. Here’s what we’re watching:


1. Disney

The Walt Disney Company (NYSE:DIS) reports earnings for the fiscal 2020 second quarter after the closing bell on Tuesday, May 5. Analysts are expecting $18.05 billion in sales and $0.93 a share profit per share.

Disney Stock Price Today

With the entertainment giant’s theme parks closed all over the world due to COVID-19, Disney is expected to report earnings from resorts and consumer products fell by $500 million or more in the period.

The Burbank, CA-based company is also suffering on other fronts: there are no live sporting events for its ESPN network to cover and no theaters currently open where its movies can be shown. Film and TV production has shut down, and its cruise ships are docked.

Faced with these challenges in the coming quarters, Disney probably won’t have much positive news to provide and could avoid delivering future guidance. One bright spot could be the subscriber numbers on its newly-launched streaming service, Disney+ which is benefiting from the stay-at-home environment.

Shares have fallen 27% this year, closing at $105.50 on Friday, after a 2.5% decline for the day.


2. General Motors

General Motors (NYSE:GM) will report results for the first quarter before the market opens on Wednesday, May 6. The carmaker is expected to show $0.47 a share profit on sales of $32.09 billion.

Auto manufacturers are among the worst hit companies in this pandemic. Global lockdowns have forced them to close their plants, while at the same time sales have collapsed.

General Motors Stock Price Today

Last week, GM suspended its dividend and share buyback program as the largest U.S. automaker seeks to preserve cash. The moves announced Monday follow other cash-saving measures taken at the beginning of April, when the company deferred 20% of salaried workers’ pay, cut top executive compensation and put 6,500 employees on leave.

GM shares have plunged more than 45% this year, massively underperforming the benchmark S&P 500 which is down about 13% since the beginning of 2020. The stock fell more than 6% on Friday to close at $20.90.


3. Tesla

Investors in Tesla (NASDAQ:TSLA) are likely to face another volatile week. The electric carmaker’s shares plunged on Friday after its CEO, Elon Musk, said in a tweet that Tesla stock is too high.

Musk posted more than a dozen times in a span of less than a 75 minutes on Friday, claiming he’s selling “almost all” of his physical possessions and won’t own a house. He also renewed his call for reopening the U.S. economy.

Tesla Stock Price Today

It’s not the first time Musk has warned investors about the high price of his own stock. In the three most recent events, Tesla shares remained in the red one year out, while in the 2013 episode, Tesla plunged 30% in the following month. It eventually recovered over the one-year period, According to Baird Equity Research cited by CNBC.

Investors became more confident about Tesla this year, after the carmaker released a better-than-expected earnings reports, raising expectations that the company was in a stronger position to withstand the coronavirus-triggered slowdown. Shares of the Palo Alto-CA company fell more than 10% on Friday, closing at $701.32.





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Natural Gas Is Flaring Up

Rising Natural Gas Prices Are a Hot Bet…

Investors, who just weeks ago shunned the fuel and the companies that sell it, are unwinding wagers that prices will fall, bidding up producers’ beaten-down shares and even buying their new bonds.

The reason for optimism: The historic collapse in crude prices thanks to the new coronavirus has energy producers racing to close oil wells.

Shutting in productive wells in crude-drilling regions like North Dakota and West Texas not only keeps oil in the ground and off the flooded market, it also chokes off a lot of gas that is extracted as a byproduct. When crude prices last month dipped below $0, natural gas prices had their best day in more than a year, popping 9.75% on the prospect that many money-losing wells will be capped.


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Meanwhile, coal, not gas, has suffered the worst of the reduced demand for electricity during the pandemic. Coal’s share of U.S. electricity generation is down by about a third from last year, according to Energy Information Administration data.

The result is renewed interest from investors in natural gas and its producers.

Hedge funds and other speculators on April 21 became net long—with more wagers on rising gas prices than bets counting on decline—for the first time since last May, according to Commodity Futures Trading Commission data.

They added bullish positions this week. Though the difference between long and short bets is relatively small, it represents a dramatic shift in sentiment. Gas speculators were piled into their largest net short position on record in mid-February.



Since February, shares of Appalachian gas producers EQT Corp. and Range Resources Corp. have more than doubled while CNX Resources Corp. stock has gained 91%. The broader stock market has been down 4.2% over that same time, and the sector’s benchmark SPDR S&P Oil & Gas Exploration & Production exchange-traded fund has lost 19%. Over the past three months, Cabot Oil & Gas Corp., a top producer in Pennsylvania, has risen 45%, second best in the S&P 500 after Regeneron Pharmaceuticals Inc., which investors have banked on developing a Covid-19 treatment.

SunTrust Robinson Humphrey analysts raised price targets for shares of seven gas producers by an average of 69%. Tudor, Pickering, Holt & Co. recommended shares of EQT, Cabot Oil & Gas Corp. and Tourmaline Oil Corp. in Canada to capture near-term gains related to what the Houston firm estimates will be 6 billion to 7 billion cubic feet of gas a day leaving the market as oil wells are shut.

Debt investors are warming too. EQT’s bonds traded down to 61 cents on the dollar in March but are back up to near par. Last week, the Pittsburgh company launched a $350 million convertible bond offering that generated so much interest that it ended up issuing $440 million of debt, according to CreditSights, which upgraded its rating of EQT. CNX followed with its own offering this week of $300 million of debt that can be swapped for shares.

Natural gas futures for June delivery lost 3% on Friday to close at $1.89 per million British thermal units after climbing to $2.016 in early trading. That’s still too low for many gas wells to be profitable, yet the price is up 22% from the 25-year-low of $1.552 on April 2 and the trend is higher heading into summer, when there’s demand to power air conditioners, and more so in winter, when a lot of gas is burned for heat.

Futures for July delivery reached $2.25 Friday before giving up gains. December gas nosed briefly above $3.

“We think the dry gas producers are attractive,” said Mark Unferth, a portfolio manager at Alpine Capital Research, referring to companies that don’t produce much poorly priced oil and natural gas liquids. “We’ve been adding to our exposure the past six weeks and overall it’s about 5% of our portfolio.”

Companies like EQT and CNX, which make their money selling gas, had to rapidly lower operating costs to keep up with oil-drilling competitors that didn’t particularly care about the price of gas and flooded the market with it when crude prices were higher. As U.S. oil production surged to records, so did gas output. Appalachian gas producers had to adapt to prices first below $3 and then this past winter to less than $2.


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Those efficiency gains should translate to profits on even small improvements in gas prices, Mr. Unferth said.

“When gas prices were at $3.50 you could afford to be sloppy but low prices have forced people to be a lot more efficient in the field,” he said.




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#CancelRent Is New Rallying Cry for Tenants. Landlords Are Alarmed.

As unemployment soars across the country, tenants rights groups and community nonprofits have rallied around an audacious goal: to persuade the government to halt rent and mortgage payments — without back payments accruing — for as long as the economy is battered by the coronavirus.

The effort has been brewing on social media, with the hashtag #CancelRent and online video rallies, as well as a smattering of in-person protests, frequently held in cars to maintain social distancing.

Representative Alexandria Ocasio-Cortez, a New York Democrat, offered a fervent endorsement of the campaign, encouraging her progressive base to embrace a movement to upend the housing market.


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“It’s not that it’s impossible to do and it’s not that we can’t do it,” Ms. Ocasio-Cortez said in a live video on her Facebook page on Monday. “We lack enough politicians with political will to actually help people who are tenants and actually help people who are mom-and-pop landlords.”

But in New York and other cities, landlords say they too are struggling to pay their bills since many tenants have already been unable to pay rent. They call the advocates’ efforts reckless and say that withholding rent would create cascading consequences, including leaving property owners without the means to pay mortgages and property taxes or to maintain buildings.

Still, from New York to Kansas City to Los Angeles, groups are encouraging tenants to withhold payments on Friday, the due date for May rent, aiming to create pressure for an expansion of affordable housing and tenant-friendly legislation.

To cancel rent and mortgage payments, the federal government would have to take sweeping and possibly unconstitutional intervention in the housing and financial markets, interceding in private contracts and ordering banks and landlords not to collect money.

While the prospect of this happening is low, the campaigns are less about pushing a particular piece of legislation and more about kindling a mass movement akin to the Occupy Wall Street protests that followed the 2008 financial crisis.

“Rent is not being paid, and the organizing strategy is figuring out how we rally around that and politicize it for our benefit,” said Tara Raghuveer, director of the Homes Guarantee campaign of People’s Action, a national network of local advocacy organizations.

Groups from California to New York have amassed a sizable following of renters who say they will skip May rent. They have also received a boost from progressive members of Congress, who introduced a cancel rent bill.

“It’s a moment that people are literally rising up for real transformation in the housing market,” said Cea Weaver, the campaign coordinator at Housing Justice for All, a New York group.

Though nascent, the movement has alarmed landlords, especially smaller property owners who say that they, like many of their tenants, also survive month to month.

“When government officials say, ‘Cancel rent,’” said Jay Martin, the executive director of Community Housing Improvement Program, which represents 4,000 New York City landlords, “they are essentially saying that we are canceling the ability for you to pay the bills we are putting on you.”





Mr. Martin said that if tenants’ rights organizers wanted to target a main driver of high housing costs, they should encourage elected officials to cut property taxes. A recent report by the New York City’s Rent Guidelines Board said that about 30 percent of a landlord’s expenses for rent-regulated apartments go toward property taxes.

New York, which has more housing units than any place in the United States, is a city of renters: There are nearly 2.2 million rental units in the city. Mr. Martin said that no landlord he knows would want to evict a tenant in this economy.

“Landlords are being made the scapegoat for all the problems,” he said.

Joseph Strasburg, the president of the Rent Stabilization Association, which represents 25,000 landlords in New York City, warned that a rent strike would “create an economic and housing pandemic.”

“The city and its residential housing landscape will crumble into an economic abyss worse than the 1970s, when New York was the national poster child for urban blight,” Mr. Strasburg said.

As bad as the economy is, rental payments in April were better than many landlords expected.

As businesses laid off employees, property owners reported a steep drop in rent collections, with close to a third of tenants behind as of the first week of April, according to a survey by the National Multifamily Housing Council, a trade group for big apartment owners.

But by month’s end, after stimulus payments and unemployment checks started flowing, the nationwide nonpayment rate was only three percentage points below where it was a year ago.

Still, those numbers probably understate the stress, as various surveys show that landlords have deferred rent, offered concessions or used security deposits to cover missed payments. And tenants have increasingly used credit cards to cover their bills.

Vinicia Barber, 39, who lost her nanny job for a family in New York City that decided to move to California during the pandemic, said that she has decided to join the rent strike.

She pays $1,877 for a rent-stabilized apartment in Crown Heights, Brooklyn, that she shares with her 14-year-old daughter. There is mold growing on the bathroom walls, and they cannot open windows because of the stench of garbage behind the building, she said.

“Something needs to change,” Ms. Barber said. “If it’s not now during the Covid-19 epidemic, then I don’t know what it’s going to take for the governor and mayor to do something.”

Rent strike or not, tens of millions of people will be under severe rent stress in May.

Looking to rally people digitally, on Thursday, the Action Center on Race & the Economy, which acts as a campaign hub for advocacy organizations, unveiled WeStrikeTogether.org, a website that will accumulate the various May rent strikes into a nationwide heat map.

People who sign up will be directed to a list of resources and be routed to local housing organizations to try and build more support for the #CancelRent campaign.

“The traditional definition of a rent strike is someone who is choosing not to pay for whatever reason, and we’re defining it more broadly here to help people see that it’s a political choice not to help folks who can’t pay rent,” said Maurice BP-Weeks, co-executive director of the action center.

It’s not as if tenants have lacked support: The $2 trillion CARES Act distributed expanded unemployment insurance and the stimulus payments, along with aid to public-housing providers and grants that states can use for rental assistance.

Still, tenant organizers and landlords are pushing for direct housing assistance.

Representative Ilhan Omar, Democrat of Minnesota, introduced the Rent and Mortgage Cancellation Act, which would relieve tenants of their obligation to pay rent, transfer mortgages to the federal government and allow landlords to recoup their rent costs — but only if they agree to a vast new regulatory program that includes a rent freeze and the inability to collect back payments.




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Global Markets – Sentiment Improves After Promising News On A Coronavirus Treatment And Fed Assurances On Lasting Economic Support

Stocks rose Thursday, following a rally in U.S. markets on Federal Reserve assurances it will continue with its stimulus programs and on promising news on a coronavirus treatment.

S&P 500 futures inched up 0.5%, suggesting U.S. markets could open higher. In Europe, the pan-continental Stoxx Europe 600 added 0.6%.

Stock benchmarks in China and Japan rose. The Shanghai Composite Index closed up 1.3% and Japan’s Nikkei 225 ended 2.1% higher. Markets in Hong Kong and South Korea were shut for a holiday.

Sentiment was boosted Wednesday by news from Gilead Sciences that a clinical trial evaluating its drug remdesivir in coronavirus patients had concluded with a positive result.

The Federal Reserve left interest rates unchanged, near zero, and didn’t announce any new measures at the close of a two-day policy meeting. However, it pledged to use “its full range of tools to support the U.S. economy in this challenging time.”

“There’s a good chance that the Fed will put in place more quantitative easing programs in the future and stay committed to keeping interest rates low for some time longer,” said Eli Lee, head of investment strategy at Bank of Singapore. He expects the near-zero interest rate to continue for the next two to three years.

Since mid-March, the Fed has bought nearly $2 trillion in Treasury and mortgage securities, eclipsing any of its similar programs between 2008 and 2014. The major U.S. stock indexes have rallied between about 12% and 15% in April on the back of the supportive Fed actions.

“The rally is a bit too far and too fast,” said Mr. Lee. The poor economic data as indicated by a sharp 4.8% contraction in the U.S. economy for the first quarter of this year suggests things will get far worse before they get better, he added.

Ong Zi Yang, senior macro analyst at FSMOne.com in Singapore, said the V-shaped recovery of the markets has led to a disconnect between the financial markets and the economic realities.

“They will continue to diverge with the Fed pumping in so much money,” he said. But he cautioned such supportive measures could be damaging in the long run as a lot of companies that aren’t operating efficiently might be getting help they don’t deserve.

The U.S. has reported nearly 1.04 million infections and more than 60,900 deaths from the new coronavirus, according to Johns Hopkins University. Globally, more than 3.19 million people have been infected, and the death toll stands at more than 227,000.

China, the first to reopen its economy after emerging from the coronavirus crisis, reported a slower expansion in factory activity in April, after a strong rebound in March, due to weak external demand.

Brent crude, the global gauge of oil prices, jumped 5.5% to $25.57 a barrel while U.S. crude surged 10.4% to $16.63 a barrel. Fears have eased about the U.S. running out of storage space, after inventories didn’t climb as quickly as expected.

The yield on the 10-year U.S. Treasury note fell to 0.601%, before drifting up to 0.614% in early morning trading. Yields fall as bond prices rise.







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Shell Slashes Dividend For The First Time Since World War II


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Shares of Shell dropped to the bottom of the European benchmark during early morning deals, down more than 7%.

Oil giant Royal Dutch Shell on Thursday cut its dividend to shareholders for the first time since World War II, following a dramatic slide in oil prices amid the coronavirus crisis.

The board at Shell said it had decided to reduce the oil major’s first-quarter dividend to $0.16 per share, down from $0.47 at the end of 2019. That’s a reduction of 66%.

“Shareholder returns are a fundamental part of Shell’s financial framework,” Chad Holliday, chair of the board of Royal Dutch Shell, said in a statement.



“However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent.”

Shell also reported that net income attributable to shareholders on a current cost of supplies (CCS) basis and excluding identified items, which is used as a proxy for net profit, came in at $2.9 billion for the first quarter of 2020. That compared with $5.3 billion in the first quarter of 2019, reflecting a year-on-year fall of 46%.

Analysts polled by Refinitiv had expected first-quarter net profit to come in at $2.5 billion for the quarter.

Shares of Shell dropped to the bottom of the European benchmark during early morning deals, down more than 7%.

Last week, Norway’s Equinor became the first oil major to cut its dividend this earnings season. It raised concern that other energy giants may follow suit, although BP, which reported Tuesday, maintained its dividend.

Investors will now be watching U.S. oil majors Chevron and Exxon Mobil, which are both due to release results Friday.

Tamas Varga, senior analyst at PVM Oil Associates, told CNBC via email that Shell had taken the “same approach” as Norway’s Equinor by cutting its quarterly dividend by roughly two-thirds.

“As demand destruction bites, cash is king.” Varga said, adding that suspending share buybacks, slashing capital expenditure and reducing dividends were “becoming the norm.” Shell CEO Ben van Beurden described energy market conditions through the first three months of the year as “extremely challenging.”

“Given the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty, we are taking further prudent steps to bolster our resilience, underpin the strength of our balance sheet and support the long-term value creation of Shell,” he added.


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Alongside the cut to its dividend, Shell announced it would not continue with the next tranche of its share buyback program. Since the launch of the program, the oil major said it had bought back almost $16 billion in shares for cancellation.

“On the face of it, the dividend cut and cancellation of share buybacks may be seen by some shareholders as a negative move in the short term,” David Barclay, senior investment manager at Brewin Dolphin, said in an email.

“However, looking further ahead it could well prove to be the right step as Shell looks to strengthen its financial position and cut costs during a very difficult time.”

The energy giant’s results come shortly after a historic plunge in oil prices.

The May contract of U.S. West Texas Intermediate plunged below zero to trade in negative territory for the first time in history last week. Trading volume was thin given it was the day before the contract’s expiration date, but, nonetheless, the move lower was extraordinary.

WTI futures had fetched more than $60 a barrel at the start of the year. A dramatic fall-off in demand as a result of the coronavirus outbreak has sent oil prices tumbling.

On Thursday, the June contract of WTI traded at $16.55 per barrel, almost 10% higher for the session, while international benchmark Brent crude stood at $23.81, up around 5%.

Earlier this week, BP reported first-quarter net profit had fallen 67% compared to the same period a year earlier.







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Stock Market Today: Global Stocks Rise Ahead Of Powell’s Comments

Futures tied to the S&P 500 rose, suggesting the blue-chip index could open higher. The Stoxx Europe 600 wavered between gains and losses, as gains for shares in oil-and-gas companies offset losses for utility stocks.

Federal Reserve Chairman Jerome Powell’s comments on the prospects for the economy, when he holds a press conference at 2:30 p.m. ET, will be closely monitored by investors. His views on the tools and options available to the Fed if the situation deteriorates further will be of particular interest as the coronavirus pandemic triggers a pronounced contraction in global output. U.S. officials have largely ruled out experimenting with negative interest rates.



“They’ve done everything they feel they need to do right now,” said Jonas Goltermann, senior markets economist at Capital Economics. “The communication challenge is going to be conveying that they will do more if needed, but that doesn’t mean they have to do more right now.”

After cutting interest rates to near zero in mid-March, the Fed began a torrent of bond-buying programs to stabilize markets, while offering support to other corners of the market to bolster the availability of credit. These measures have helped stocks stage a rapid recovery in the face of a deep recession.

Investors will seek to learn how long the Fed expects the economic downturn to last, said Eddy Loh, senior investment strategist at Maybank Group Wealth Management.

The U.S. is also scheduled to release preliminary data on gross domestic product, a broad measure of the goods and services produced in an economy, at 8:30 a.m. The figures are expected to show the economy contracted in the first quarter. Second-quarter data, which won’t be released until July, are forecast to show a steeper decline.

Also Wednesday, a series of blue-chip companies are due to publish earnings for the first three months of the year, starting at about 6 a.m. General Electric, Spotify Technology, Boeing, Mastercard and Hasbro are due to release their reports before the market opens. Facebook, Microsoft, Qualcomm and Tesla will report after the close of trading.

Among European stocks, International Consolidated Airlines Group, owner of British Airways, fell almost 4% after starting the process of laying off more than a quarter of the carrier’s staff.

Wirecard fell 6.4%, extending a rout that began Tuesday, after a prominent activist investor called for the German financial-technology company to fire its chief executive.

Oil markets remained volatile. Brent crude, the global gauge of oil prices, climbed 3.7% to $23.57a barrel. Futures contracts that will deliver West Texas Intermediate in July, the benchmark for U.S. crude markets, rose 4% to $18.30 a barrel. A contract that will deliver crude in June jumped 14% to $14.04 a barrel. Investors have sold the June contract in recent days to avoid taking hold of physical barrels of oil at a time when storage space is running out.


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Asian stock benchmarks broadly rose. Australia’s S&P/ASX 200 closed 1.5% higher, while the Shanghai Composite Index inched up 0.4%. Hong Kong’s Hang Seng Index ticked up almost 0.3%. Japan’s market was closed for a public holiday.




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Crude Oil Volatile – Dysfunction In The Oil Market Intensified, Sending The Most Popularly Traded U.S. Oil Contract To A Fresh Low

Oil prices recovered some losses Tuesday after traders scrambled to avoid the worst of the damage wrought by volatile markets. The world is awash with too much oil at a time when coronavirus lockdowns on driving, flying and industrial activity has all but eliminated the need for the stuff.


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June futures contracts for West Texas Intermediate—the main U.S. bellwether—dropped nearly 20% and touched $10.24 a barrel before regaining ground to around $13.56 a barrel, up 6% on the day. Brent crude was up 2.9% at $23.72 a barrel. WTI traded at a massive difference to its European counterpart because of severe bottlenecks in storing oil in Cushing, Okla., where WTI contracts are settled.

The earlier drop in WTI briefly put it on track for the lowest closing level for an actively traded contract since at least 1986, according to data provider FactSet. WTI has only ever settled the day below $11 on six occasions, according to FactSet records, which stretch back to 1986. The last time was in 1998. The all-time low was March 31, 1986, when oil traded for $10.42.

A lightly traded futures contract for WTI traded for negative prices last week, spooking markets, and prompting investors to race out of contracts that require them to take delivery of oil in the coming months. Most oil watchers consider the most actively traded contract at any given time as the price that best reflects market conditions.

The selloff picked up steam Tuesday as investors sold the June contract and into ones that are tied to oil delivered in months down the road, said Giovanni Staunovo, commodity analyst at UBS’s Chief Investment Office.

“Everyone’s running out of the contract and they don’t want to be the last ones on the train, so that’s not helping prices,” Mr. Staunovo said.

S&P Dow Jones Indices said in a statement after Monday’s market close that it would remove the June U.S. crude contract during Tuesday trading hours from its widely followed indexes that track the oil market and switch to the July contract.

The move, which S&P said would include the S&P Goldman Sachs Com modity Index, comes earlier in the trading month than usual, and was “based on the potential for the June 2020 WTI Crude Oil contract to price at or below zero,” the index announcement said. BlackRock’s iShares S&P GSCI Commodity-Indexed Trust exchange-traded fund tracks that index and had around $400 million of assets as of April 27, according to the fund website.

BlackRock didn’t immediately respond to a request for comment.

That followed a decision by the United States Oil Fund —the largest exchange-traded fund that attempts to track oil prices—to sell its positions in the June contract and purchase positions in contracts several months away.

The crash in prices, and the dip into negative territory for the May contract last week, highlighted the dangers associated with holding oil futures that expire soon. Some WTI contracts require owners to take delivery of oil when the contracts expire. With oil tanks and pipelines full, some oil investors were forced to unload the right to collect that oil and pay the buyer to do so.



Many fear that negative oil prices could happen again. Prices on WTI contracts for July delivery have also come down in recent days to $18.99 a barrel. Contracts for delivery at the end of the year are at about $27 a barrel.

Government-imposed lockdowns aimed at preventing the spread of the coronavirus have suffocated global oil demand. Oil majors, frackers and national oil companies around the world have raced to shut off wells. A deal among major oil-producing nations to cut due to take effect Friday that will hold back approximately 13% of global supply.

But investors worry these measures won’t relieve the supply glut fast enough.

A lack of space to store oil onshore in the largely landlocked U.S. market has pushed WTI prices lower, said Bjarne Schieldrop, chief commodities analyst at SEB Markets. The hit to Brent prices, which are tied to oil produced in the North Sea, has been less severe. The Brent market is largely seaborne and space to store oil offshore remains. But as long as production continues amid weakening demand, space will run out, Mr. Schieldrop added.

“The final crunch point in time is still ahead of us,” he said. “Supply and demand will be forced to align meaning that production will have to shut down. That will be the final low point, but we are not there yet.”

Investors will keep a close watch on U.S. inventory data due out this week, with American Petroleum Institute stock-level data expected later Tuesday.




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UBS Reports Net Income Up 40% As Market Volatility Leads To Higher Trading Volumes


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UBS reported Tuesday a 40% increase in profit for the first quarter of 2020 on the year before, helped by higher trading volumes as market participants reacted to the volatility of recent months.

Net profit attributable to shareholders came in at $1.6 billion in the three months to the end of March, up from $1.1 billion in the same quarter of 2019.

Here are some other key metrics from the results:

Operating income came in at $7.9 billion versus $7.2 billion a year ago
Common equity tier 1 ratio (CET1) — a metric of bank solvency — was 12.8% versus 13% a year ago. Return on tangible equity — a metric of profitability — hit 12.8%, compared with 9.8% a year ago



“We saw a huge pick up in client engagement, despite the logistical challenges. We see that clients are more and more looking for advice,” Sergio Ermotti, UBS’s chief executive officer, told CNBC’s Squawk Box Europe.

Turbulence in the markets helped UBS’s investment bank post the biggest jump in operating profit, across the all the business divisions, on the year before. Operating profit before tax rose to $709 million from $207 million at the end of the first quarter of 2019.

Within investment banking, UBS attributed a 44% rise in revenue in its global markets division to “significantly higher volumes and volatility, particularly in Foreign Exchange, Rates and Cash Equities revenues, reflecting the impact of the COVID-19 pandemic on client activity levels.”

Its global wealth management division also increased its operating profit before tax over the last year to $1.2 billion from $863 million. However, invested assets fell to $2.3 billion.

Outlook
The results come at a time of significant pressure for banks, as the coronavirus pandemic has brought the global economy to a standstill.

The Swiss bank said the coronavirus had “dramatically changed the global economic outlook,” adding that it foresees disruption to many businesses and higher unemployment as a result. Given this, UBS is expecting higher levels of credit loss expenses for the financial sector.

Speaking to CNBC Tuesday, Ermotti said it was “very difficult to make predictions about any quarters going forward.”

“January, February and March were all profitable months,” he said, adding that the bank will seek to be “flexible” in dealing with upcoming challenges.

UBS said earlier this month that it will suspend half of its 2019 dividend payout until later this year, after pressure from Swiss regulator FINMA. The bank’s chief executive officer, Sergio Ermotti, said earlier this month that it was too early to discuss 2020 dividend plans.

UBS’s share price has dropped around 30% over the last 12 months. In February, the bank announced that Ralph Hamers will be taking over as chief executive officer on November 1.




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Pandemic Triggers A Wave of Distress, Bankruptcy In Corporate America

What a time to be a restructuring specialist.

Practically overnight, bankers and lawyers who advise companies in distress have become some of the most in-demand workers on Wall Street, ending a long period in which rising markets and abundant capital consigned them to obscurity.

Stay-at-home orders and the shutdown of nonessential business have driven broad swaths of the economy into panic mode. In industries that were already in a precarious position before the crisis, including retail and energy, the coronavirus pandemic has tipped many companies over the edge. A host of oil companies have sought chapter 11 protection, while J.C. Penney Co. JCP 3.69% and Neiman Marcus Group Inc. are expected to file for bankruptcy soon.



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Companies in areas that were previously stable, such as the automotive, travel and leisure industries—and even health care—may soon face similar pressures.

U.S. corporate debt downgraded to selective default, meaning a borrower has failed to meet one or more of its obligations, totaled $64.1 billion for the 12 months ended April 17, according to S&P Global Ratings. That represents only a slight uptick over the pace at the end of January, but the numbers are about to get a lot more bleak.

In the coming months, that figure could top the roughly $340 billion reached at the height of the financial crisis, according to the worst-case scenario estimates from S&P. Even in a less grim scenario, the figure could approach levels reached after the dot-com bust in the early 2000s.

Companies of all stripes are scrambling to avoid a painful reorganization of their capital structures and operations, default or bankruptcy. Many have tapped lines of credit and slashed costs. Some, such as Carnival Corp., Expedia Group Inc. and Airbnb Inc., have issued new equity or debt to public investors or private-equity firms.

For some, those efforts could tide them over until conditions improve. But should the recession prove deeper than envisioned, there could be a second—potentially bigger—wave of corporate distress later this year as companies labor under the weight of additional debt taken on during the shutdown, advisers warn.

“We will definitely see an uptick in defaults and an uptick in restructurings,” said William “Tuck” Hardie of Houlihan Lokey Inc., one of the top banks in restructuring. “The question is: Is it a 2,000-foot mountain or is it Mt. Everest?”



U.S. companies drew down about $230 billion from revolving credit lines from the beginning of March through April 9, according to an analysis by Goldman Sachs Group Inc. The largest portion—around 17%—went to companies in the automotive industry, with about 15% going to retailers and 10% to travel and leisure purveyors.

Those figures don’t include new revolver borrowings by companies without publicly traded bonds or those financed by private lenders, many of which are private-equity-backed and were already highly indebted.

Hard-hit companies have taken on additional debt on top of using their credit lines—and some may have effectively boxed themselves in by doing so. Carnival earlier this month sold $4 billion worth of senior secured notes backed by assets like its cruise ships. Tying up those assets will make it difficult for the company to go back to the debt market if it needs to raise more cash, according to a person familiar with the company’s capital structure.

Another person close to Carnival said the cruise operator believes it still has a number of financing options available to it if cruising doesn’t return by early next year, and it expects to get access to government-backed loans in some of the markets where it operates.

For private-equity-backed companies, which are typically bought using a heavy helping of debt and a relatively small amount of equity, having little to no revenue can be even more painful. Loans to fund new buyouts had average debt of 5.93 times earnings before interest, taxes, depreciation and amortization in 2019—the highest since 2007, when the average was 6.23 times, according to S&P Global Market Intelligence’s LCD.

Working in their favor is the fact that 85% of so-called leveraged loans issued in 2019 were “covenant lite,” giving borrowers more breathing room. That figure has risen steadily over the past decade as investors clamored for yield. In 2010, only 10% of leveraged loans were covenant lite, according to data compiled by J.P. Morgan Asset Management.



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Also backstopping companies owned by buyout funds: Firms have around $2 trillion in unspent cash to invest in private markets, with most of that dedicated to private equity, according to alternative-investments manager Hamilton Lane Inc. Much of the dry powder is in the hands of the biggest firms, however, and companies’ fate will be determined by their owners’ willingness to inject more capital at a time when future prospects are highly precarious.



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And the universe of companies facing distress stretches well beyond the world of private equity, said Steve Zelin, head of restructuring at investment bank PJT Partners. “It doesn’t matter if you were five times levered or two times levered prior to the current crisis if you are now not generating any revenue.”

Investment firms that specialize in distressed investing have been gearing up for more action. Oaktree Capital Group LLC aims to raise $15 billion for what would be the biggest-ever distressed-debt fund, according to a person familiar with the matter.

Apollo Global Management Inc. has already invested more than $10 billion since the beginning of March in credit and private-equity.

James Zelter, the firm’s co-president who heads its $200 billion-plus credit business, says he sees three phases of distress playing out.

The first occurred during the early days of market turmoil in March, when even the debt of companies unaffected by the virus was trading at big discounts. The second is the industry-specific declines that led to the rescue financing companies like Expedia have been receiving.

“The third phase is just beginning,” Mr. Zelter said.




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Global Stocks Rise As Countries Begin To Reopen Economies

Global stocks rose Monday, with investors anticipating that stimulus measures and the easing of coronavirus-lockdown measures in the U.S. and Europe may help kick-start economic activity.

Futures tied to the Dow Jones Industrial Average advanced 0.9%. Last week, the benchmark for U.S. blue-chip stocks posted modest losses, dropping 1.9% after a massive rally from late March to mid-April.

Japan’s Nikkei 225 stock index ended the day up 2.7%. The Bank of Japan scrapped its target for government-bond purchases and said it would nearly triple its holdings of corporate debt to aid fundraising by companies affected by the coronavirus pandemic.

European markets climbed as countries including Italy and Spain signaled that they may loosen restrictions in the coming weeks. The pan-continental Stoxx Europe 600 gauge rose 1.7%.

Italy announced a timetable for reopening its economy and restoring daily life beginning on May 4, but warned that a resurgence in cases could lead to a return of restrictions. Spain allowed children to leave their homes after six weeks under one of the strictest lockdowns in the world.



In the U.S., some states allowed retailers, salons and other businesses to reopen over the weekend as new infections appeared to slow.

“We don’t yet know the full scale and the pace of lockdowns being eased, but it’s important for confidence,” said Edward Park, deputy chief investment officer at Brooks Macdonald. “Suggestions that factories will restart sooner rather than later suggests that the pressure on economic output in the data we’ve seen will be a shorter-lived phenomenon.”

Concerns about sovereign debt from Europe’s most debt-laden countries also showed signs of easing. Italian, Spanish and Greek bonds rallied after S&P Global Ratings on Friday held off on downgrading Italy’s credit rating. The yield on Italy’s 10-year bond fell to 1.754% Monday, from 1.903% Friday.

Markets at the tail end of last week were fixated on European political risk, and a run on debt markets triggered by a downgrade for Italy,” said Mr. Park. “The lack of a downgrade offers some breathing space.”


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Oil prices dropped sharply as energy markets remain volatile at the start of a week that will test the world’s ability to house a glut of crude. West Texas Intermediate futures, considered the benchmark for U.S. crude prices, fell over 24% to $12.59 a barrel. Brent crude, the global benchmark, fell 5.3%.

The yield on the benchmark 10-year U.S. Treasury rose to 0.630%, from 0.594% Friday.

Investors will also be closely focused on the outcome from the U.S. Federal Reserve and the European Central Bank’s meetings this week. Recent economic data and forecasts from many countries have been weak, prompting policy makers to take unprecedented steps and allocate huge sums to support businesses and individuals whose finances have taken a hit.

“Normally when you have a recession, there are a number of factors that are reining in credit and stimulus and that’s not the case here,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Later in the week, a flood of U.S. companies—including Amazon.com, Apple and Facebook— are scheduled to report first quarter earnings. They are likely to provide insights on how leaders of the biggest American businesses view prospects for the rest of the year. But the pandemic has made earnings forecasts even less reliable than normal, analysts and investors said.

“Most investors are looking through the earnings reports as somewhat meaningless because we’ve never had this mix of fall-off in demand and central bank, government stimulus support before,” Mr. Haefele said.

Among major European equities, Deutsche Bank AG was the best performer. The stock rose over 10% after the German bank said late Sunday that it will beat analyst expectations and report a first-quarter profit. Higher revenue and lower expenses have helped it offset provisions for credit losses triggered by the coronavirus outbreak.
Across Asia, South Korea’s Kospi Composite advanced 1.8% while Hong Kong’s Hang Seng Index gained 1.9%. The stocks benchmark in Australia climbed around 1.5%.


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China’s statistics bureau Monday released data showing that industrial companies’ profits in March were down 34.9% from a year earlier, a slight improvement from the 38.3% pace of decline in January-February. The country last month began reopening some industrial hubs after closing most factories and companies to curb the coronavirus’s spread. The Shanghai Composite Index closed 0.3% higher.

Central banks’ stimulus policies and other government measures to subsidize wages are all helping to buoy markets and asset prices, said Iris Pang, chief economist for Greater China at ING Bank NV in Hong Kong. “They will take a while to reach the real economy,” she said, adding that the path to increasing consumption is unlikely to be smooth.




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The Coronavirus Shutdown Will Induce The Sharpest Economic Downturn And Push The U.S. Budget Deficit To The Highest Levels Since The 1940s

Some degree of social distancing is expected to continue through the first half of 2021, the CBO said.

The economy is likely to shrink 12% in the second quarter—a 40% drop if it were to persist for a year—and the jobless rate will average 14%, the nonpartisan research service said Friday. Job losses will come to 27 million in the second and third quarters.

The federal budget deficit is expected to reach $3.7 trillion by the end of the fiscal year on Sept. 30, the CBO said, up from about $1 trillion in the 12 months through March. Congress has authorized unprecedented deficit spending to offset the shutdown of vast swaths of the U.S. economy.


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As a proportion of gross domestic product, the deficit will end the fiscal year at almost 18%, its highest level since the year after World War II ended and up from 4.6% in 2019, the CBO said.

Federal debt held by the public is projected to hit 101% of gross domestic product by the end of the fiscal year, up from 79% at the end of fiscal 2019, the CBO said.

The silver lining is that interest rates are projected to fall so low that the government’s net borrowing costs will decline even with the dramatic increase in borrowing, the CBO said. It sees the yield on 10-year Treasury notes hovering at 0.7% in the second half of this year and through 2021.

The updated forecasts, published in a blog post by CBO Director Phillip Swagel, rest on assumptions that are “subject to enormous uncertainty.” These include the extent to which the coronavirus is brought under control in the coming months and the possibility of a subsequent re-emergence.

Some degree of social distancing is expected to continue through the first half of 2021, the CBO said. But those measures are projected to diminish by roughly 75% in the second half of this year relative to the April-June quarter and continue easing into 2021.



As a result, economic activity is projected to recover from its current nadir, but only gradually. GDP is expected to contract 5.6% in 2020 from last year and to grow 2.8% in 2021.

The unemployment rate is seen topping out at 16% in the third quarter and declining to 9.5% by the end of 2021. But the CBO cautioned that those numbers understate the extent of damage because they only count people who are actively looking for a job.




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Oil Glut Swells Off Asian Trading Hub On Global Storage Scramble

A narrow waterway off Singapore has become even more congested as oil-laden tankers wait out a slump in global fuel consumption that’s crimped demand and boosted the use of ships to store cargoes.

About 60 clean fuel tankers are currently anchored along the busy strait, up from the usual 30-40 ships, according to Rahul Kapoor, head of commodity analytics and research at IHS Markit. Some vessels are being used to hoard fuel at sea as onshore tanks fill up. Others are probably parked, waiting to be redirected to any willing buyer across Asia and the world as the coronavirus pummels economies worldwide.



Ships filled with gasoline to jet fuel are moving from major refinery hubs such as South Korea and China due to a crash in domestic demand and swelling stockpiles. These tankers are finding their way to the Singapore Strait, where the glut is being compounded by offloading delays at the city state. Vessels currently have to wait about two weeks to discharge cargoes in Singapore, compared to the typical 4-5 days, according to shipbrokers and traders, leaving ships stranded in local waters.

Storage options are dwindling globally as onshore tanks rapidly fill to capacity, prompting traders, refiners and infrastructure companies to seek alternatives such as pipelines and ships. Bloomberg earlier reported that those who managed to snag some highly-coveted tanks in Singapore were being charged much higher rates, even as the nation stopped leasing out space to new customers.

Major fuel-exporting countries are facing difficulties finding homes for their surplus barrels,” said Sri Paravaikkarasu, Asia oil head at industry consultant FGE. In Singapore, crude processing rates at refineries have probably dropped to around 60% of capacity, and may drop further to as low as 50% during the second quarter, she said.

The onshore storage squeeze is being seen across the region. In India, tanks were 95% full as of last week as refiners scrambled to find space to hold their excess fuel, even turning to pump stations and depots. In Singapore, fuel stockpiles rose to a four-year high in mid-April.


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Utilizing tankers has become the next best option, with analytics firm Vortexa estimating floating crude oil storage in Asia at a four-year high. Taking into account the waters off Singapore as well as Malaysia, data intelligence firm Kpler saw a 45% month-on-month increase in the volume of clean fuels — comprising naphtha, gasoline, jet fuel and diesel — stored on ships to 6.64 million barrels as of April 23.

Across the world, freight rates for both clean as well as dirty tankers have surged dramatically along with rising demand for floating storage. Also, shippers are using a strategy known as slow steaming, where they deliberately reduce the speed of tankers to increase the shipments’ transit time while awaiting the emergence of buying interest from customers, or save on fuel.




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Making Sense Of A Stock Market Just 16% Off Its High While A Pandemic Costs 26 Million Jobs

Why isn’t the stock market much lower?

This question is occurring to plenty of observers right now, given the apparent contrast between economic realities and equity performance.

A pandemic-driven economic catastrophe of unprecedented speed has cost more than 26 million jobs, which to many seems unreflected in an S&P 500 index that’s up 29% from its low a month ago, down a mere 16% from a record high and resting near levels from late summer 2019 – a time when we were at full employment and record corporate profitability.



Even some on Wall Street are remarking on this perceived Wall Street-Main Street disconnect.

Cantor Fitzgerald strategist Peter Cecchini last week argued, “The equity market just isn’t getting the joke. Three factors make this rally appear somewhat ridiculous because the likely extent of the slowdown will be severe relative to historical experience for three reasons: 1) a pandemic whose duration is unknowable, 2) an oil shock whose impacts on earnings will be deflationary, and 3) an already fragile economy as indicated by an inverted yield curve and already contracting loan volumes.”

Credit Suisse’s Jonathan Golub notes the S&P 500 has been at the current 2800 level a couple of times in recent years, comparing the fundamental context for each visit. When the S&P traded here in both January 2018 and March 2019, forecast earnings over the next year were appreciably higher (meaning stocks now look more expensive) and credit spreads are much wider now (suggesting a riskier environment).

Only when comparing valuations on the profit projections two years out does today’s market look roughly in line with the prior stops at 2800. And it’s probably fair to assume that today’s consensus forecast calling for 2021 earnings growth well above 2019 levels is unadjusted for the full realities of the economic shock underway.

Certainly, the trillions in Federal reserve asset buying has helped enable the rally in risk assets that has lifted equities off their lows and bolstered valuations.

Market internals tell the true story
Yet the way the S&P has returned to 2800 doesn’t truly suggest that the market has rushed to anticipate a roaring economic revival.

If stocks were handicapping such a quick resurgence in the economy, one would expect “early cycle” groups such as autos, banks, consumer durable goods and retail to lead the market. This is the opposite of what’s going on.

Binky Chadha of Deutsche Bank notes that the firm’s early-cycle long-short basket of stocks “after falling massively during the sell-off has continued to fall during the rally.”

Similarly, the Direxion MSCI Cyclicals Over Defensives ETF, a small fund that goes long economically sensitive stocks and short non-cyclical names, has had a fairly feeble bounce after a 38-percent collapse, badly trailing the S&P on the rebound.

Big, steady secular-growth stocks in technology, healthcare and consumer staples are holding things together at the big-cap index level against a steady undertow from shares of cyclical businesses with flagging demand and shakier balance sheets.

This is visible in the gulf between the performance of classic “recession-recovery” plays such as General Motors, flooring-products maker Mohawk Industries and consumer lender Capital One Financial and secular-growth or counter-cyclical names like Amazon, Abbot Laboratories and Campbell Soup.

Amazon exemplifies another dominant trend, the premium being placed by investors on the acclaimed winners of an even more winner-take-all economy that might follow this downturn. Amazon’s $1.2 trillion market value, in fact, now accounts for more than 40% of the entire value of the S&P 500 consumer-discretionary sector.

Of course, just because the market is leaning on sturdy growth businesses rather than outright positioning for a better economy doesn’t mean this theme can carry the market indefinitely higher from here.

Market stalling
The S&P, in fact, has stalled over the past two weeks, chopping sideways just below the rebound-rally highs, as some growth stocks take a breather and short-term overbought conditions are worked off.

It would not be surprising for the indexes to continue digesting the move, assimilating the rush of corporate earnings in coming weeks, with some observers looking for a potential pullback of a few percent from here simply as a matter of technical market positioning.



And at some point, the extreme reliance on the mega-cap growth leaders can go too far. The five largest stocks already make up more than 20% of the S&P, pushing record concentration at the top.

Flows into the ETFS that track the Nasdaq 100, technology, healthcare and utilities have reached extremes, a sign they are getting a bit overheated and are prone to backing off.

At the same time, the market will almost certainly start to anticipate the trough in economic activity well before it seems obvious on Main Street that things are getting better. That would be visible in a rotation out of the crowded stable-growth names and into those distressed, struggling cyclical consumer, financial and industrial groups.

Historically, the stock market has some of its best returns when conditions are shifting from awful to less bad. The recent rally in energy stocks in the face of record-low washout prices in crude oil is an illustration of that.

As Strategas Group technical strategist Chris Verrone notes, “It’s difficult to get worse than worst ever,” and many gauges are, like oil prices, indeed at or near their worst readings on record: unemployment claims, Europe manufacturing indexes, Citigroup Economic Surprise Index.


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Things might soon line up for investors to start making a more aggressive bet the worst will pass before long and the real economy can start the healing process. And perhaps that bet will prove premature for a while once its laid.

But that doesn’t mean that right now Wall Street has already given the economy credit for recovering from an ordeal whose pain and duration are not yet known.




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When Will Disneyland And Other Parks Reopen?

Swiss banking giant UBS told clients Monday that Walt Disney Co. is likely to wait until Jan. 1 to open its theme parks and predicted the Burbank media company will see only about 50% of 2019 attendance.

“Moreover, we now believe the lingering effects of the outbreak — including crowd avoidance, new health precautions, etc. — will dramatically reduce the profitability of these businesses even after they are reopened until a vaccine is widely available,” the report said about Disney’s parks.

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Stay-at-home orders by state and local governments will dictate when parks can consider reopening. Disney said its parks will remain closed until further notice. Universal Studios Hollywood and Universal Orlando Resort announced plans to stay closed until at least May 31.

Theme park operators have been tight-lipped about what the future holds for their parks, but they have clearly been discussing plans for opening day.

Annual passholders for Universal Orlando Resort said they received a survey last week asking how likely they are to return to the park under various restrictions, such as requiring guests to wear masks or limiting park attendance to 50% of normal.

In an interview with Barron’s, Disney Executive Chairman Bob Iger said his parks would require “more scrutiny, more restrictions” so customers would feel safe to return. He suggested the idea of taking the temperature of each visitor before allowing entrance.

“Just as we now do bag checks for everybody that goes into our parks, it could be that at some point we add a component of that that takes people’s temperatures, as a for-instance,” Iger said.

On several online Disney discussion forums, theme park fans say they have uncovered a plan, presumably leaked by a Disney employee, for allowing guests to return to the Walt Disney World Resort in Florida.

The plan, titled the Secure Circuit protocol, would reopen the park with limited capacity, no parades, no castle shows, no firework displays and health checks performed at every security checkpoint. In addition, the protocol would require guests to sign a form, clearing Disney of any liability for potential exposure to the novel coronavirus.

Disneyland representatives declined to discuss whether the Secure Circuit protocol is legitimate or any plans being developed to reopen the parks.

The process of taking temperatures of entering visitors (using non-contact thermometers) has already been adopted in theme parks in Asia that closed only briefly. At Janfunsun Fancy World in Taiwan, people who have a temperature of 99.5 degrees or higher are denied entry.

At Everland Resort in South Korea, workers take visitors’ temperatures and encourage them to wear masks.

The resort’s attraction queues include markings on the ground to show how far apart each person must stand to maintain social distancing. Rides and stores are disinfected hourly. Hand sanitizer dispensers are set up around the park.



Theme park insiders have been so focused on reopening after the crisis subsides that a webinar on strategies for reopening theme parks and other attractions drew nearly 500 industry workers this month.

The April 15 webinar was hosted by Gateway Ticketing Systems, a Pennsylvania company that develops ticketing systems and consults for theme parks, zoos, museums and other attractions. “Everyone is just spinning out large contingency plans,” said Randy Josselyn, a principal at Gateway Ticketing who hosted the webinar.

Among the speakers on the webinar was Eddie Jones, a support specialist at Atlanta Botanical Garden, who said the garden has already devised a plan for reopening by allowing only 50 people to enter the gardens every 15 minutes.

The plan would cut capacity in the gardens from the normal daily attendance of about 7,000 to about 2,500, he said. A back gate would be opened so that guests could leave without creating a bottleneck at the entrance.

Industry experts say putting limits on capacity would almost certainly be a requirement so that people do not crowd together at reopened parks.

Bill Coan, chief executive of Itec Entertainment, a developer of theme park attractions and shows, said he doesn’t think capacity limits will be difficult to enforce because park fans will not be rushing back once the theme parks reopen.

“I don’t think those numbers are going to occur for some time,” he said of previous attendance numbers.

Coan echoed other theme park experts who said parks will probably open in stages, with some attractions closed in the early stages and rules imposed on how tightly packed visitors can be in lines and in stores.

But limiting capacity and hiring additional workers to take temperatures, enforcing anti-crowding rules and sanitizing rides would be expensive and could make operating theme parks unprofitable, said Martin Lewison, a business administration professor and theme park expert at Farmingdale State College in New York.



Some parks might be able to get by with fewer workers if capacity is vastly reduced, and higher ticket prices might become a profit-bolstering option, but it’s difficult to know for sure because theme park operators aren’t talking.

“These are the kind of practical ideas that I imagine operators are working through, deciding what is practical,” he said.

Whatever procedures are adopted by theme parks, Lewison said some fans will stay away but many others will be ready to return quickly.

“There is a chunk of America who says, ‘Let’s take that risk.’” he said.

For Alexandria Grable, 19, who had an annual pass for the Disneyland Resort for the last three years, the closing of the resort in mid-March convinced her that the coronavirus outbreak was a serious health threat.

But the Santa Clarita teen said she would return if Disneyland reopens.

“I think I would go,” Grable said. “I trust Disneyland enough to know they would not put their guests in harm’s way.” Other theme park devotees are less likely to rush back even if health and social distancing restrictions are added.

“Will anyone want to spin their teacup or the Roger Rabbit taxicab or Buzz Lightyear blasters, knowing how many other hands have touched them?” asked Matthew Gottula, a longtime Disneyland fan from Altadena, who said he doesn’t go anywhere without a container of hand sanitizer attached to his belt.

Another Disneyland fan, Aaron Goldberg, who has written several books on Disney parks and the Disney family, said he wouldn’t return to the parks without wearing a mask and gloves. “Maybe I’m a bit more neurotic, but it’s impossible to avoid touching just about everything at Disneyland and all of the parks,” he said.



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Global Stocks Traded Lower, As Signs Of The Coronavirus Pandemic’s Impact On Jobs And Business Activity Weighed On Markets

Futures tied to the S&P 500 ticked down 0.3%, suggesting the blue-chip index may slip after a volatile day of trading on Thursday. European stocks fell, pushing the Stoxx Europe 600 down 1.3%.

In Asia, Japan’s Nikkei 225 closed 0.9% lower, while South Korea’s Kospi Composite eased 1.3%. China’s benchmark Shanghai Composite fell 1.1% and Hong Kong’s Hang Seng Index lost 0.4%. The exception was Australia, where the S&P/ASX 200 rose 0.5%.



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The Nikkei retreated 3.2% on the week, its first pullback in three weeks, while the S&P/ASX 200 shed about 4.5%, its first such decline in five weeks, and the Kospi Composite fell 1.3%. Benchmarks in Hong Kong and Shanghai were also on track to post weekly drops for the first time in several weeks.

U.S. stocks had a turbulent session Thursday, closing flat after early gains were wiped out by reports of a setback for a key drug to treat Covid-19.

“The market has been getting its head around how much permanent damage is to be brought by the virus. And the latest figure tells us the U.S. labor market is in a bloodbath,” said Govinda Finn, an economist at Aberdeen Standard Investments.

Data published Thursday showed about 4.4 million Americans sought unemployment benefits last week, bringing the total claims for the past five weeks to more than 26 million.

Separate figures showed business activity, as measured by surveys of purchasing managers, plunged in the U.S., Europe and Japan.

Mr. Finn said his institution projected U.S. unemployment would peak at 19% by the middle of this year, as the pandemic was battering the economy much more quickly than the global financial crisis.



Layoffs directly hit consumption and social distancing was also discouraging spending. The size and persistence of the shock will cause some permanent scarring to the U.S. economy, with consumption accounting for roughly 70% of gross domestic product, he said.

Zheng Fang, chief investment officer at Keywise Capital Management, a Hong Kong-based hedge fund, said after recent rallies, neither earnings nor the progress with coronavirus treatments justified further gains in U.S. or mainland Chinese stocks.

The yield on the 10-year U.S. Treasury note slipped to 0.589% from 0.613% Thursday. Yields move in the opposite direction to bond prices.

Oil prices extended a rebound that began Wednesday. U.S. crude-oil futures for June delivery added 1.9% to $16.82 a barrel. Brent crude, the global gauge, rose 1.7% to $25.20.



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Oil Prices Soar As Traders Prepare for Wild Ride to Continue

West Texas Intermediate futures that will deliver oil in June, the U.S. benchmark, rose 20% to $16.47 a barrel. Brent crude futures, used to set prices for oil throughout global energy markets, rose 8.6% to $22.12 a barrel.

Helping prices regain some lost ground: signs of a recovery in demand for oil in China, which is emerging from coronavirus lockdowns, and tensions between the U.S. and Iran. The two nations engaged in a new round of antagonism Wednesday, when Tehran said it had launched its first military satellite into space.

“When you look at China, road traffic and refinery operations are back up,” said Norbert Rücker, head of economics at Swiss private bank Julius Baer. “Don’t forget the geopolitical side too,” he added, referring to the potential for U.S.-Iranian tensions to disrupt the movement of oil through the Strait of Hormuz, a vital channel for tankers.

The advance in prices Thursday continues a period of outsize moves in global energy markets, which have rippled through to oil producers, bond markets and currencies. The price of the most actively traded WTI futures contract has moved up or down 10%, on average, on each trading day since the start of March.

That compares with an average move in either direction of 1.5% in 2019 as a whole, according to FactSet data.


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Traders and analysts say prices will continue to swing. One gauge of how volatile WTI futures prices are expected to be over the next 30 days, the Cboe Crude Oil ETF Volatility Index, has soared more than 730% this year to its highest level on record.

Like the better-known VIX index tracking volatility in the stock market, the index uses options prices to calculate how far traders are expecting prices to move over the next month.

The oil volatility options aren’t tied to oil futures prices directly but instead to United States Oil Fund LP, an exchange-traded fund that aims to match U.S. crude prices. The fund has been at the center of the oil price drama in recent days. It accumulated a huge position in the futures market thanks to a rush of cash from individual investors.

The pandemic has stopped the world from consuming tens of millions of barrels of oil it would otherwise use every day, and storage space is filling up. Production cuts by the Organization of the Petroleum Exporting Countries and its allies, led by Russia, won’t immediately offset this decline in demand.

U.S. crude prices remain 41% lower than they were at the end of last week. In an aberration of historic proportions, the lightly traded May WTI futures contracts fell below $0 for the first time on Monday, meaning traders had to pay buyers to take oil off their hands.

“We’re close to capitulation,” said Marwan Younes, chief investment officer at Massar Capital Management. “We’re getting close to the point when people just stop trying to buy this,” he added, referring to U.S. crude oil futures.

Crude-oil stockpiles in the U.S. climbed by 15 million barrels to 518.6 million barrels last week, the Energy Information Administration said Wednesday, putting them about 9% above the five-year average. Production fell by a modest 100,000 barrels a day.



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Global Stocks Steady As Oil Prices Recover

Global stocks were little changed as oil prices regained more ground after days of turmoil.


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Futures for the S&P 500 were flat, suggesting moves in U.S. stocks later Thursday could be muted. The pan-continental Stoxx Europe 600 fell flat. Major benchmarks in the Asia-Pacific region were mixed: Japan’s Nikkei 225 closed 1.5% higher, while indexes in Australia and Shanghai showed little change. Hong Kong’s benchmark gained 0.5%.

The yield on the 10-year Treasury note rose slightly to 0.622% from 0.618% in the previous session. Yields fall as bond prices rise.

Oil prices built on Wednesday’s rebound, which was sparked by the prospect of fresh U.S.-Iran tension. Strains in the Middle East can boost crude prices by signaling potential disruptions to shipments of oil around the world and possible supply shortages.

U.S. crude-oil futures for June delivery advanced 6.9% to $14.71 a barrel. Brent crude, the global equivalent, rose 5.3% to $21.45 a barrel.

Eli Lee, head of investment strategy at Bank of Singapore, said markets had been buoyed by hopes that economies could quickly get back to normal as the coronavirus pandemic came under control, and by hefty support from the Federal Reserve, even extending to riskier assets like lower-rated bonds.



However, Mr. Lee said: “The path towards normality is going to be very gradual.”

History tells us that the market correction during prolonged recessions of more than one year tends to be far deeper” than seen so far, he added.

Fresh coronavirus outbreaks in Asia have added to uncertainty about how quickly governments can safely resume normal economic activity. In the U.S., President Trump said Wednesday that he strongly disagreed with the governor of Georgia’s decision to allow some nonessential businesses to reopen as soon as Friday, saying this was too soon.

Frank Benzimra, head of Asia equity strategy at Société Générale, said China offered a template for economies reopening. “Even if things are getting back slowly to normal, the borders aren’t open, so free circulation of goods and trade isn’t coming back quickly.”

The Dow Jones Industrial Average clawed back some of this week’s losses Wednesday, gaining 2% as oil prices rose and investors looked to corporate-earnings reports to gauge the health of U.S. businesses during the coronavirus pandemic.



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Euro Zone Business Activity Crashes To ‘Shocking’ Lows On Coronavirus Pandemic

Euro zone business activity hit another record low during April in another sign that the coronavirus pandemic is causing severe economic damage across the region.

The IHS Markit Purchasing Managers’ Index, which measures both the services industry and manufacturing, dropped to 13.5 in April, according to preliminary data. In March, the same index had already recorded its biggest ever single monthly drop to 29.7. A contraction in PMI figures — a figure below 50 — indicates a likely fall in economic growth overall.

Earlier in the session, Germany’s flash index came in at 17.1, a record low, versus a figure of 35.0 the month before. This was worse than analysts had been expecting with Phil Smith, principal economist at IHS Markit, saying it “paints a shocking picture of the pandemic’s impact on businesses.”




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Oil Collapse Continues As Brent Plunges More Than 15%

Oil prices continued to plummet Wednesday as concerns over limp demand and limited remaining storage capacity lingered.

In the afternoon of Asian trading hours, international benchmark Brent crude futures dropped 15.57% to $16.32 per barrel. Meanwhile, the June contract for West Texas Intermediate shed all of its earlier gains as it dropped 6.66% to $10.80 per barrel. The July contract for WTI also declined and was last trading below $19 per barrel.

Per Magnus Nysveen, senior partner and head of analysis at Rystad Energy, warned that the situation in the oil markets is “going to be worse.”

“The world is running out of place to store the oil,” Nysveen told CNBC’s “Street Signs Asia” on Wednesday, adding that storage acts as “a kind of buffer.”

“When the supply and demand balance is positive or negative, then you can build or draw from storage,” he said. “But when the storage gets full, then there is no buffer for this very strong imbalance that we’re seeing.”



Pictet Wealth Management’s Jean-Pierre Durante agreed with Nysveen’s assessment of the situation, commenting in a Wednesday note that the “world is overflowing in oil” despite a recent decision by the Organization of the Petroleum Exporting Countries and its allies — known collectively as OPEC+ — to cut oil supply.

“World storage capacity will rapidly reach saturation point,” said Durante, who is head of applied research at Pictet Wealth Management.

Global demand for oil has fallen dramatically, with major economies worldwide effectively frozen as a result of coronavirus-induced lockdowns imposed by authorities scrambling to contain the spread of the disease.

Wednesday’s moves in oil followed recent sharp declines in the sector. The May contract for WTI, which expired Tuesday, plunged below zero for the first in history before clawing its way back into positive territory. The June WTI contract plunged more than 40% on Tuesday while international benchmark Brent dropped from levels above $24 per barrel.



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US Oil Fund Plunges 38%, Halted For Trading Repeatedly

Trading in the United States Oil Fund, a popular exchange-traded security known for its ‘USO’ ticker which is supposed to track the price of oil and is popular with retail investors, plunged nearly 40%.

At one point, trading was halted in morning trading after USCF, the manager of the fund, said that it was temporarily suspending the issuance of so-called creation baskets. It was then halted periodically during the trading day for volatility.


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Creation baskets are how an ETF creates new shares to meet demand. The baskets hold the underlying securities which in this case are plummeting oil futures. With the halting of these creation baskets, the ETF will essentially now trade with a fixed number of shares like a closed-end mutual fund.

On Friday, USCF changed the structure of the USO fund so that it can hold longer-dated contracts. Per a regulatory filing, around 80% of the fund will be in the front-month contract, with 20% in the second-month contract.

John Davi, founder and CIO of Astoria Portfolio Advisors, said the new structure was implemented as a way to try and protect investors from plunging crude prices. The coronavirus pandemic continues to sap worldwide demand for crude, which has sent prices to their lowest levels on record.

According to Davi, the USO is primarily owned by retail investors, which can be dangerous for those who believe they are betting on oil prices moving higher over time, without fully understanding the dynamics in the commodity market.

“To buy USO you have to understand the oil futures market,” Davi told CNBC. “They [retail investors] just buy the ETF because they think the price of crude will go up, but they don’t understand the drivers, which are fairly complicated.”

USCF did not provide a comment.

On Monday, the May contract for oil fell to a negative price, an unprecedented event wreaking havoc on the oil markets. The contract expires today. USO likely had already sold that contract because it has stated in the past that it would invest in the next contract two weeks before expiration. So it owns futures for the June month and now likely the July month, given the revised structure.

June futures began cratering as well on Tuesday, pressuring the fund. June futures expiring in a month dropped 50% to under $10 on Tuesday. July contracts fell 27%. The May contract, however, recovered a bit and was trading with a positive value again of $9.

USO could run into trouble if those contracts also fall to a negative value as they near expiration, mimicking the May contract’s plunge ahead of its expiration.

Negative futures value is unprecedented and it is unclear how products like exchange-traded funds built for the retail investor to participate in the market will handle such events.

Hayman Capital Management CIO Kyle Bass has been warning investors about the danger of exchange traded funds that track oil prices.

“Retail has been plowing into these oil contracts thinking they’re buying spot crude oil when they’re buying the next front month. So they’re paying $22 a barrel when the spot market’s negative $38. Retail investors are going to get fleeced if they continue to fly into these oil ETFs,” he said Monday on CNBC’s “Closing Bell.”

Following Monday’s price action, Bass, who said he holds short positions against some energy-focused ETFs, tweeted that he would demand 100% collateral.

Warren Pies, energy strategist at Ned Davis Research, sounded a similarly cautious tone.

“At best, they are expensive ways to gain programmatic futures exposure,” he said of commodity-based ETFs on Monday. “At worst, they are designed to implode. Still, money continues to flow into the USO ETF. As of last week, USO’s assets reached an all-time high of more than $5 billion. To reiterate: In this environment, USO is a train wreck. Stay away,” he said.



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Oil-Price Crash Deepens, Weighs On Global Markets

The crash in global oil prices deepened Tuesday, as pain spread to currencies of major exporters and shares in energy producers.

Brent crude futures, the international benchmark for oil markets, dropped 15% to $20.67 a barrel, their lowest level since 2002. The decline came a day after the price of West Texas Intermediate, the U.S. crude benchmark, dropped below zero for the first time in history.

U.S. oil markets came under further pressure. The June WTI futures contract, now the most actively traded, dropped 17% to $17.03 a barrel. The May contract, which settled at a historic minus $37.63 a barrel Monday, rose to minus $6.30 a barrel in thin volumes on its final day of trading.

The convulsions in oil markets underlined the huge hit that government-imposed lockdowns designed to stall the spread of the coronavirus have dealt to oil demand. With producers unable to shut wells fast enough, and OPEC and G-20 production cuts not due to take effect until early May, traders say that the world is essentially running out of space to store oil.

“Whatever oil analysts and oil traders have learned over the course of the last 50 years or 100 years was all of a sudden put in question” by Monday’s negative oil prices, said Eugen Weinberg, head of commodities research at Commerzbank. “Everyone has been shocked.”

Oil futures, used by investors to bet on the direction of prices and by producers to protect against market swings, had performed better than the physical oil market for several weeks. Now, they are being stung by the slide in demand for actual barrels of crude.

“This is the market signaling to producers that you need to cut off more production faster because we’re drowning in oil at this point,” said Saad Rahim, chief economist at Swiss commodities trader Trafigura.

The drop in oil prices rippled through to the currencies of oil-producing nations. Russia’s ruble dropped 1.7% to trade at 76.81 a dollar, extending its depreciation against the greenback this year to 19%.

The economy of Russia, the world’s second-largest oil producer in 2019, stands to suffer from lower oil prices. A weak currency could prevent the Bank of Russia from cutting interest rates as much as it would like to bolster growth at a monetary-policy meeting on Friday, said Piotr Matys, a strategist at Rabobank.

U.S. stock futures and European equity markets were down Tuesday, led lower by shares in energy companies. Shares in Noble Energy Inc. fell more than 5% in New York in premarket trading, as did shares in oil-field services provider Schlumberger Ltd. Among Europe’s oil majors, BP PLC lost 4.6%, Royal Dutch Shell PLC 4.5% and Total SA 3.5%.



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The underlying problem for energy markets remains the collapse in demand caused by the coronavirus, which has grounded planes, stopped billions of people from driving and disrupted global trade. Economists have forecast a deep global recession and international oil organizations estimate that demand will shrink in the coming weeks.

“We’re running out of storage,” said Bob McNally, president of consulting firm Rapidan Energy. “Demand is contracting two or three times as fast as supply.” The drop in prices is a “brutal but efficient” mechanism to “persuade producers to keep oil under the crust,” Mr. McNally said.

The drop below zero makes it more likely that President Trump will impose tariffs on oil imports into the U.S., added Mr. McNally, a former White House adviser.

Market mechanisms that might help rectify the slump appear to be breaking down because of the lack of storage space and demand for oil globally.

Typically, low U.S. prices would encourage traders to buy cheap American oil and sell it at a higher price in Europe or Asia. The way Brent crude prices sank in tandem with WTI on Tuesday suggests “the world doesn’t want to take U.S. barrels,” said Vincent Elbhar, co-founder of Swiss hedge fund GZC Investment Management.

Monday’s moves also prompted urgent discussions between Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries about whether to cut production as soon as possible. OPEC members are considering bringing forward the start date for production cuts from May 1.



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U.S. Crude Futures Turn Positive After Historic Plunge

U.S. oil prices hobbled back into positive territory on Tuesday after sinking below $0 for the first time ever, but international benchmark Brent dipped as the global coronavirus crisis severely reduces demand for crude.

U.S. West Texas Intermediate (WTI) crude for May delivery (CLc1) was up $38.99 in thin trade at $1.36 a barrel by 0622 GMT after settling down at a discount of $37.63 a barrel in the previous session. The May contract expires on Tuesday and the more-active June contract rose 94 cents, or 4.6%, to $21.37 a barrel.



Global benchmark Brent crude for June delivery was down 48 cents, or 1.9%, at $25.09 per barrel.

“Demand destruction from COVID-19 will see a slower than expected reopening of the U.S. economy,” said Edward Moya, senior market analyst at broker OANDA, predicting a weak period for oil prices. “The WTI crude June contract was able to hold the $20 a barrel level and is seeing a modest gain following the painful rollover of the May contract.”

Oil prices have skidded as travel restrictions and lockdowns to contain the spread of the coronavirus curbed global fuel use, with demand down 30% worldwide. That has resulted in growing crude stockpiles with storage space becoming harder to find.

The main U.S. storage hub in Cushing, Oklahoma, the delivery point for the U.S. West Texas Intermediate (WTI) contract, is now expected to be full within a matter of weeks.

Following the collapse in oil prices, U.S. President Donald Trump said on Monday that his administration was considering halting Saudi crude oil imports as a way to help the U.S. drilling industry.

Today it’s pretty clear that a major issue in the market is a glut in the United States and lack of storage capacity,” said Michael McCarthy, chief market strategist, CMC Markets in Sydney.

Faced with the situation, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, a grouping known as OPEC+, have agreed to cut output by 9.7 million barrels per day (bpd). But that will not take place before May, and the size of the cut is not viewed as big enough to restore market balance.

Supply and inventories are expected to tighten in the second half of the year, while “severe storage distress is likely to drive wild price realizations,” in the next 4-6 weeks, Citi Research said in a note.

Meanwhile, U.S. crude inventories were expected to rise by about 16.1 million barrels in the week to April 17 after posting the biggest one-week build in history, according to five analysts polled by Reuters. Analysts expected gasoline stocks to rise by 3.7 million barrels last week.

The American Petroleum Institute is set to release its data at 4:30 p.m. (2030 GMT) on Tuesday, and the weekly report by the U.S. Energy Information Administration is due at 10:30 a.m. on Wednesday.



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A Blast Of Earnings News Is Coming… But The Market May Be More Focused On When The Economy Will Reopen

Earnings from IBM, Netflix, Coca-Cola and dozens of others are expected in the week ahead, but as the state shutdowns now reach the one-month threshold, the market is more likely to trade on virus headlines and news about reopening the economy.

There are also some important economic reports, including existing home sales on Monday and durable goods on Friday. But it is the weekly jobless claims data that will again be most relevant, as economists watch to see whether the number of workers seeking claims has now peaked and whether there are any signs some are returning to jobs, as government funds reach the hands of business owners.

In the past week, stocks were higher, but there was a divergence with the Dow up just under 2.2% at 24,242, and Nasdaq, surging 6%, lifted by tech and biotech. The S&P 500 gained 3% for the week and is now 31% off its March lows.

Stocks gained amid signs the virus outbreak has peaked and some reopenings could start slowly in the next few weeks.

The market also bounced Friday as the results of an early study of a Gilead drug showed promise with severe cases of coronavirus. Technology stocks were up about 4% for the week, and health care was up more than 5% while consumer discretionary stocks led with a gain of more than 6%.



“As the virus news goes, so go risk assets. People expect bad economic data,” said Patrick Leary, chief market strategist at Incapital. “The data is all expected to be horrible. The only economic data we can really look at now and start to measure is the claims data on Thursday.” As of April 11, more than 22 million workers claimed unemployment benefits over a four-week period, as states shut down and schools, restaurants, stores and many other businesses closed or were forced to cut back.

Charts are important
Analysts who watch stock charts say technical levels will continue to have a powerful pull on the market, since so many traders have set their computers to trade around those numbers.

For instance, the S&P 500 had a hard time breaking through the 50-day moving average Friday, and fell back after it initially edged near 2,862 in morning trading. But at the end of the trading day, it smashed through that level, surging to close at 2,874, a positive sign for Monday’s open. The 50-day literally is the average closing price for the S&P over the previous 50 sessions. Technical analysts believe watching moving averages gives them an important tool for price trends and momentum.

Bob Doll, Nuveen’s chief equity strategist, said he believes the market hit its bear market low on March 23, but it could take another dive towards lows at some point.

“My [low] target was 2,350. We spent 36 hours below that and got to 2,192. If there’s a secondary low, then probably the lowest chance is 2,350,” he said. “I’m not sure we’re going to go there, based on two things, the power of the rally and two, the stimulus. It’s been awesome.”

Doll said after the first blow-off phase to the March low, the second phase of a bear market is the type of choppy trading that results in swings both higher and lower.

“Then you get phase two, which is a whipsaw fashion and it bounces all over the place. … You kind of get dizzy, then you make the secondary low.” Doll said. Then ultimately, the market moves on to where price-to-earnings ratios and earnings in general will matter again.

“What’s driving the market is not earnings. What’s driving it is technicals,” said Doll.

What about earnings
First quarter earnings began to roll in during the past week, starting with major banks. So far, based on actual reports and forecasts, first quarter earnings are expected to be down 14.5% in the first quarter, the worst quarter since the more than 15% decline in the third quarter of 2009. As for the second quarter, a much sharper 27.3% decline is expected, according to I/B/E/S data from Refinitiv.

IBM reports Monday, while Coca-Cola, Netflix, Travelers, and Texas Instruments release results Tuesday. AT&T, Delta Airlines, and Intel, Blackstone and Eli Lily are reporting Thursday. American Express and Verizon are expected Friday.

Doll said he expects the market to listen to comments from corporate executives on conference calls but ignore the actual earnings. “The market is going to pay a lot more attention to what can a rebound look like, and what can 2021 numbers look like,” he said. “They’ll be selling on that versus how deep is the hole going to be in the second quarter. The macro questions around that are recurrence, therapeutics, and vaccine and how fast can the economy come back, and nobody knows the answer to that.”

President Donald Trump laid out guidelines for reopening the economy, but left the decision making up to the states, which are facing varied levels of new infections. One issue is the lack of testing, and American businesses have pressed for more availability of test kits so workers can be brought back more safely.

Doll said he is partial to health care and technology stocks, and one reason is because of the Fed’s quantitative easing programs. “We’re now in QE4. We had QE1, QE2, QE3, and six months after QE 1, 2 and 3, there were two sectors that outperformed-technology and health care, and there were two that underperformed, utilities and REITs,” he said.

Doll said he also is looking at how stocks might come through the virus shutdowns. “Part of what you want to make sure is the company is going to make it through, and make sure the industry has decent demand getting out of it. If it has decent demand during it, that’s a good thing, and that takes you back to health care and technology,” said Doll.

Leary said he expects companies to be scrutinized somewhat differently by analysts this quarter, and balance sheets will be more important.

“Its going to be on a case-by-case basis about how analysts are going to look at them. This is not a typical recession. Recessions seem to hit different sectors,” he said, “This one one is different in that it really has several losers like airlines and travel and entertainment companies. It has some real winners too. I like health care and pharma. Anything that’s defensive in nature is going to perform well.”

Companies have been tapping the corporate bond market at a record pace to boost their cash piles to help them through the economy’s shutdown, and the coming week should be no different.

The corporate debt market has been open for business and spreads have narrowed since the Fed announced a program to buy corporate debt. Companies have issued more than $160 billion in investment grade bonds so far this month, with JP Morgan issuing $10 billion this past week in the biggest bank deal ever, according to Credit Flow Research.

More are expected in the coming week, as companies report earnings and exit the blackout period.

“I think what corporate treasurers know is the window of opportunity for issuing debt at reasonable rates will quickly close once the economy starts opening,” said Leary. He said balance sheets and earnings will be more scrutinized once things start to become more normal.

“They won’t have an excuse anymore … right now, everything is expected to unexpected,” he said, “I think that window will close, and we’ll have to take a look at the bond market again. Their ability to issue will be impacted by their balance sheets…[now] there’s plenty of cash coming at them. The Fed will step in to support.”



Leary said some of the interest in corporate bonds is from investors who are fearful of buying stocks right now but may want to invest in a company through the safer play of its bonds. Leary said energy bonds are among the least desirable, with the huge drop in crude prices.

West Texas Intermediate crude futures for May settled at $18.72 per barrel, it lowest level since January, 2002. But that contract expires Tuesday. The June contract settled at $25.08 per barrel, and will resume trading there next week as the active contract.

“It’s just a reflection of physical market conditions,” said John Kilduff of Again Capital, of the big decline in the May contract. He said it shows that futures traders do not want to actually take delivery of the commodity, due to an increasing lack of storage space.


Week ahead calendar


Monday

Earnings: IBM, Steel Dynanics, Equifax, Zions Bancorp, Ally Financial, Halliburton, Infosys, Royal Phillips, Truist Financial

Tuesday

Earnings: Coca-Cola, Netflix, Travelers, Texas Instruments, Chubb, Lockheed Martin, CIT Group, SAP, HCA Healthcare, Manpower, Prologis, Comerica, Emerson Electric, Synchrony Financial, Snap, Canadian Pacific Railways, Interactive Brokers, Teradyne

8:30 a.m. Philadelphia Fed nonmanufacturing

10:00 a.m. Existing home sales

Wednesday

Earnings: AT&T, Las Vegas Sands, Alcoa, Boston Beer, Kinder Morgan, Delta Air Lines, Baker Hughes, Quest Diagnostics, Kimberly-Clark, Nasdaq, Discover Financial, Netgear, Seagate Technology, SLM, TD Ameritrade, CSX, Biogen, Thermo Fisher, LM Ericsson

9:00 a.m. FHFA home prices

Thursday

Earnings: Intel, Blackstone Group, Eli Lily, Credit Suisse, Invesco, Huntington Bancshares, Tractor Supply, Capital One, FirstEnergy, Hershey, Southwest Air, Union Pacific, Citrix, Domino’s Pizza, PulteGroup

8:30 a.m. Weekly claims

9:45 a.m. Manufacturing PMI

9:45 a.m. Services PMI

10:00 a.m. New home sales

Friday

Earnings: American Express, Verizon, Sanofi, Eni

8:30 a.m. Durable goods

10:00 a.m. Consumer sentiment



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Bets Against the Stock Market Rise to Highest Level in Years

Short sellers have revived their wagers against the stock market in recent weeks, taking their most aggressive positions in years.

Bets against the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the broad index, rose to $68.1 billion last week, the highest level in data going back to January 2016, according to financial analytics company S3 Partners. That was up from $41.7 billion at the beginning of 2020 and $41.2 billion a year ago.

Short sellers borrow shares and sell them, hoping to repurchase them at lower prices and keep the difference as profit. Among the individual companies they have targeted in recent weeks are travel-related firms, including Carnival Corp., Royal Caribbean Cruises Ltd., Marriott International Inc. and Wynn Resorts Ltd.


The Little Book That Beats the Market


Those bets come during a wild year for investors who are struggling to reconcile the impact of the coronavirus pandemic on the population and economy. The S&P 500 suffered its fastest drop from a record to a bear market in history—ultimately falling 34% between Feb. 19 and March 23. Its 28% rebound since then has also been brisk, leaving some investors anxious about the strength of the rally when so much remains unknown.

“We’ve really seen a significant bounceback in the last three weeks at levels that I think are too quick,” said Jerry Braakman, chief investment officer at First American Trust. His firm recently bet against the Nasdaq-100, on the belief that technology stocks have fallen too little to reflect the probability of a recession. The index is up 1.1% in 2020.

“When we see a strong move in one direction, where we think the fundamentals and the news can turn ugly, especially during an earnings cycle, we think that’s an opportunity where we could see a 5, 10% selloff again,” he said.

Investors are bracing for the possibility of more volatility this week, as earnings reports from companies including Coca-Cola Co., Netflix Inc. and Delta Air Lines Inc. give another glimpse at how the coronavirus is reshaping the landscape for U.S. business.

The outsize market swings of late require vigilance from investors who sell shares short because they can face losses when prices rise. Short sellers incurred total mark-to-market losses of $108.8 billion over three days in late March when the S&P 500 surged 18%, according to Ihor Dusaniwsky, head of predictive analytics at S3 Partners.

But with the potential for additional declines ahead, many investors have decided that the ability to hedge their portfolios—or simply bet on a selloff—is wise.

“Things will go back to normal eventually and these positions will decrease but not until we start seeing less volatility in the market,” Mr. Dusaniwsky said of the rise in short positions against the SPDR S&P 500 Trust. “No one’s going to give up their insurance until they see the chances of catastrophe are in the rearview mirror.”

The portion of available shares sold short against the SPDR S&P 500 Trust has also risen, climbing to 27% in early April, the highest level since November 2016 and up from 14% at the beginning of 2020.

The increase in bets against the market coincides with a push in other countries to temporarily curb short selling. At times of heightened volatility, critics often argue that the practice exacerbates downward pressure on stock prices. But Jay Clayton, the chairman of the Securities and Exchange Commission, has argued short selling is needed to facilitate ordinary market trading.

To be sure, coronavirus has upended entire industries in recent weeks, leaving investors scrambling to reassess the growth prospects of companies from Marriott to Clorox Co. to Amazon.com Inc. to Carnival.

With the pandemic devastating global travel, hotel, casino and cruise stocks have been among the hardest hit—and seen some of the biggest additions to the short positions against them.

Many hotels and casinos temporarily closed their doors when demand evaporated, furloughing employees and curbing spending plans, and the Centers for Disease Control and Prevention has extended a no-sail order for cruises into July.



Short sellers have added a collective $797 million to their short positions against Carnival, Royal Caribbean, Marriott and Wynn over the past 30 days, according to data Friday from S3 Partners.

Alex Lee, a San Francisco resident who manages a family sandwich shop in Oakland, Calif., and his wife had previously dabbled in short selling but have recently devoted more attention there. They made bets against Marriott, along with other stocks.

“Because of Marriott’s price at the time, it seemed like it had more room to fall and because of its heavy presence in Europe and the United States, we just thought that that company itself would be more vulnerable to falling more,” he said.

Over two rounds of shorting Marriott stock in March and April, they made a profit of about $15,000, Mr. Lee said. Marriott recently said about 25% of its hotels are temporarily closed, and North American occupancy levels are around 10%. Its shares are down 44% this year.


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Among the stocks that saw big drops in short positioning in March were stodgy consumer-staples shares, which got a bounce as Americans stocked their pantries to wait out the pandemic at home.

“We had a lifetime of trading in the month of March,” said Mitch Rubin, chief investment officer at RiverPark Funds. He said he had previously bet against shares of Kroger Co., Walmart Inc., Clorox and Campbell Soup Co. but covered those positions in late February and early March as it became clear those companies would perform well with consumers sheltering in place.

“Their business is healthier than it was before the crisis because the demand for their products has increased,” he said. “The amount of times you clean high-touch surfaces with a chemical disinfectant is going to go up for some period of time, maybe for the rest of our lives.”



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Oil Falls More Than 10% To Lows Not Seen Since 1999

Crude oil futures fell on Monday, with U.S. futures touching levels not seen since 1999, extending weakness on the back of sliding demand and concerns that U.S. storage facilities will soon fill to the brim amid the coronavirus pandemic.

The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency.


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The volume of oil held in U.S. storage, especially at Cushing, Oklahoma, the delivery point for the U.S. West Texas Intermediate (WTI) contract, is rising as refiners throttle back activity due to slumping demand.

The front-month May WTI contract (CLc1) was down $2.62, or 14%, to $15.65 a barrel by 0142GMT. At one point, the contract had fallen as much as 21% to hit a low of $14.47 a barrel, the lowest since March 1999.

That contract is expiring on Tuesday, and the June contract , which is becoming more actively traded, fell $1.28, or 5.1%, to $23.75 a barrel. Brent (LCOc1) was also weaker, down 21 cents, or 0.8%, to $27.87 a barrel.

The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing and a big drop in demand, said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“It hasn’t reach capacity but the fear is that it will,” he said, adding that once the maximum capacity is reached, producers will have to cut output.

Production cuts from OPEC and its allies such as Russia will also kick from May. The group has agreed to reduce output by 9.7 million bpd to stem a growing supply glut after stay-at-home orders and business furloughs to curb the COVID-19 pandemic that has killed more than 164,000 people worldwide sap fuel demand.

The oil industry has been swiftly reducing production in the face of an estimated 30% decline in fuel demand worldwide. Saudi Arabian officials have forecast that total global supply cuts from oil producers could amount to nearly 20 million bpd, but that includes voluntary cuts from nations like the United States and Canada, which cannot simply turn on or off production in the same way as most OPEC nations.

Numerous majors have announced supply reductions, including Chevron Corp (NYSE:CVX), BP plc (LON:BP) and Total SA (PA:TOTF). But economic growth is sagging, and physical crude markets and an estimated record 160 million barrels of oil stored onboard ships suggest prices will keep falling.

“There’s still some concern that the 10 million barrels per day cut won’t be enough to offset demand destruction so the outlook for oil prices remain subdued,” McCarthy said.

North American exploration and production companies have cut their budgets by roughly 36% on a year-over-year basis, according to a Sunday note from James West, analyst at Evercore ISI, while international companies have cut budgets by 23%.



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Financial Markets – Top 5 Things To Watch This Week



While dozens of earnings reports are expected in the coming week and economic data will bring more insights into the impact of the coronavirus the main focus will still be on developments relating to the virus and how soon the economy can reopen.

Around 20% of S&P 500 companies are expected to report results in the coming week and there are also some important economic reports, including U.S. jobless claims, durable goods and existing home sales. The euro zone is to release PMI data for April along with reports from Germany’s ZEW and Ifo, while the U.K. is set to publish figures on unemployment, inflation and retail sales. Here’s what you need to know to start your week.


Some states to begin lifting coronavirus restrictions
U.S. President Donald Trump said on Saturday that Texas and Vermont will allow certain businesses to reopen on Monday while still observing coronavirus-related precautions.

Demonstrations to demand an end to stay-at-home measures spread to Texas on Saturday. Trump appeared to encourage protesters with a series of Twitter posts on Friday calling for them to “LIBERATE” Michigan, Minnesota and Virginia, all run by Democratic governors.

Trump has touted a thriving economy as the best case for his re-election in November.

Several states, including Ohio, Michigan, Texas and Florida, have said they aim to reopen parts of their economies, perhaps by May 1 or even sooner, but appeared to be staying cautious.

Vice President Mike Pence said on Friday the U.S. had the capacity to do a sufficient amount of testing for states to move into a phase one of reopening, but Governors and state health officials say there is nowhere near enough test kits and equipment available.

The U.S. has by far the world’s largest number of confirmed coronavirus cases, with more than 720,000 infections and over 37,000 deaths.

Earnings deluge
Around one hundred S&P 500 companies are expected to report results this week, as investors digest a market surge that has lifted the S&P index 25% from its March lows as of Thursday. Those include major industrial, tech and consumer products companies, as well as streaming company Netflix (NASDAQ:NFLX), whose shares rose to a record high in the past week as widespread stay-at-home orders drove demand for online streaming services.

Some of the companies also reporting are among those worst hit by the pandemic’s fallout, including airlines such as Delta Air Lines (NYSE:DAL) and Southwest Airlines (NYSE:LUV).

Investors are bracing for brutal first-quarter earnings but will also be on the lookout for indications of how soon business can get back on track.

U.S. initial jobless claims may ease
Initial jobless claims could slow again this week as the initial reaction to shutdowns starts to ease. More than 22 million Americans have filed for unemployment benefits in the past month as closures of businesses and schools and severe travel restrictions have hammered the economy.

Durable goods orders are expected to plunge, given recent weakness in manufacturing data and the collapse in the oil and gas sector caused by tumbling commodity prices.

The calendar also features updates on new and existing home sales and PMI data, which is expected to drop further.

Meanwhile, the Federal Reserve is in blackout mode ahead of its next scheduled policy meeting on April 29th.

Euro zone PMI pain
Thursday’s advance readings of euro zone PMIs for April are likely to make for painful reading.

Composite euro zone PMIs, comprising services and manufacturing, dropped to a record low of 29.7 last month, the biggest monthly drop since the survey began in July 1998.

In addition to the PMI data reports from Germany’s ZEW and Ifo Institutes will shed more light on the health of the bloc’s largest economy as it prepares to ease virus lockdown measures.

Euro zone finance ministers are to meet on Thursday to continue discussions about an EU fund to boost the recovery. The issue of joint European debt, or corona bonds, is likely to come up again, but the chance they will ever see the light of day remains slim.

UK data to give first real look at economic hit
The scale of the economic fallout from coronavirus pandemic in the UK is likely to be both larger, and much more rapid, than that of the Global Financial Crisis.

With that in mind, some economists expect Thursday’s retail sales figures to show a decline of around 10%, but this number could be much larger based on other spending indicators already released. PMI data is also expected to point to a steep slowdown in activity.

The week will also bring what will be closely watched updates on unemployment and inflation.




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Europe Needs At Least 500 Billion Euros For Recovery

Europe will need at least another 500 billion euros from European Union institutions to finance its economic recovery after the coronavirus pandemic, on top of the agreed half-a-trillion package, the head of the euro zone bailout fund said.

In an interview with Italy’s Corriere della Sera paper, published on Sunday, European Stability Mechanism Managing Director Klaus Regling said the easiest way to organize such funds would be via the European Commission and the EU budget.

“I would say that for the second phase we need at least another 500 billion euros from the European institutions, but it could be more,” Regling told the paper.



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“For that, we need to discuss new instruments with an open mind, but also use the existing institutions, because it is easier, including in particular the Commission and the EU budget. Rethinking European funds can go a long way in keeping the European Union together,” Regling said.

European Union finance ministers agreed on April 9th on safety nets for sovereigns, companies and individuals worth in total 540 billion euros.

They also agreed that the euro zone, which the IMF predicts will plunge into a 7.5% recession this year because of the pandemic, will need money to recover, but they had different ideas on how much is needed and how to raise it.

EU leaders are to discuss that at a videconference on April 23. The idea around which a compromise may emerge is likely to involve the European Commission borrowing on the market against the security of the long-term EU budget and leveraging the money to achieve a bigger effect.



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European Central Bank Headquarters And Frankfurt's Financial District Ahead Of Comprehensive Bank Assessment



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The Stock Market Is Ignoring The Economy

The Dow Jones Industrial Average staged its best two-week performance since the 1930s, the explosive rally is a sign that many are positioning for the U.S. to make a speedy recovery when the coronavirus crisis eases. Investors have been encouraged in recent days by signs that several states will move to resume business, along with hopes that a viable treatment for Covid-19 could be near.


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The blue-chip index rose 2.2% this week, extending its rally over the past two weeks to 15%—its best performance since 1938. The S&P 500 climbed 3% this week, while the Nasdaq Composite surged 6.1% as investors piled into highflying technology stocks. The Dow and S&P 500 are still down more than 10% for the year, while the Nasdaq’s losses have been cut to 3.6%

Many investors agree the most important driver of the rebound has been the Federal Reserve’s massive stimulus plan, combined with the efforts of the U.S. government, which sent a signal that both were willing to step in like never before to buoy the economy. U.S. stocks bottomed March 23, after the Fed cut rates to near-zero.

“They took away the depression. That scenario is out of the picture now,” said Zhiwei Ren, a portfolio manager at Penn Mutual Asset Management. “The Fed is the fundamental reason” for the rebound.

The central bank also unleashed a massive program to buy Treasurys and mortgage-backed securities, while President Trump signed a roughly $2 trillion stimulus package, the biggest relief package in U.S. history.

For some investors, it doesn’t pay to bet against stocks after the Fed stepped in. The stimulus spurred a fear of missing out among investors and gave many the confidence to resurrect some of the most popular tactics of recent years—buying dips in the stock market and piling into shares of big technology companies.

The coronavirus’ toll on the population and the economy has been dour. More than 150,000 people around the globe have died, while cases world-wide have topped 2 million. In the U.S., more than 22 million Americans have sought unemployment benefits in recent weeks.

Retail sales, a measure of purchases at stores, gasoline stations, restaurants, bars and online, fell by a seasonally adjusted 8.7% in March from a month earlier, the most severe decline since record-keeping began in 1992. Earnings for the first quarter among big U.S. companies are expected to decline nearly 15% from a year earlier, according to FactSet, which would mark the biggest decline since 2009.

The Fed’s latest move “reinforces our view of a full asset price recovery, and equity markets reaching all-time highs next year,” Mr. Kolanovic said in a recent note. “Investors with [a] focus on negative upcoming earnings and economic developments are effectively ‘fighting the Fed,’ which was historically a losing proposition.”

There may be limits to that approach, other analysts said. For example, a $350 billion small-business loan program from the U.S. government has already exhausted its funding, highlighting the mammoth challenge that lawmakers face—and sheer amount of cash necessary—to support the economy and keep Americans employed.

These types of loans can be forgiven if firms don’t lay off workers, but U.S. lawmakers have recently struggled to agree on the next round of coronavirus emergency aid.

Despite the stimulus checks going to Americans around the country, measures by the central bank and government can’t alter human behavior and force people to leave their homes, eat at restaurants, shop at malls and go to movies. That has led some analysts to say a recovery may take longer than many are currently anticipating.


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“How long before you and I are going to feel comfortable going to a concert again?” said Dominic Nolan, a senior managing director at Pacific Asset Management, which oversees roughly $12 billion in debt. “A government program doesn’t really help that.”

Mr. Nolan said that he has recently bought bonds of investment-grade companies after the Federal Reserve’s recent moves.

Some investors are still anxious because the bond market is sending a more cautious signal. Investors have continued scooping up traditionally safe assets like government bonds and gold as stocks have rallied.

The yield on the 10-year Treasury note has fallen to 0.655% from 1.26% in mid-March as bond prices have risen, while gold prices hit their highest level in more than seven years this week. The concurrent gains across traditionally risky and safe assets alike suggest that many remain concerned about an extended downturn.

Investors have also treated some corners of the stock market as a hiding place, piling into the technology darlings that powered markets higher in recent years.

“The Nasdaq is trading like a safe haven in a way,” Mr. Ren of Penn Mutual Asset Management said.

Amazon.com Inc. and Netflix Inc. both surged at least 14% this week and set records, while some of the momentum-driven trades that were popular earlier in the year also re-emerged. Tesla Inc. has risen for 10 consecutive trading days, its longest winning streak on record, bringing its gain for the year to 80%.

It seems like a “hold your nose, close your eyes and buy,” situation, said Mike Bailey, director of Research at FBB Capital Partners. “Even though there’s a torrent of economic data coming.”

Mr. Bailey said he has been surprised by the “stocks going up on bad news” phenomenon. However, he has bought shares of Amazon and Apple Inc.

The recent rally among big tech stocks underscores their hefty influence on the market. The S&P 500, which is weighted by market-capitalization, is down 11% this year, while a version of the index that gives every company an equal weighting has plummeted 19%.

“You have the trillion dollar guys that are doing fine,” Mr. Nolan said. “I think on average companies have gotten hit really hard.”



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Stock Market Investors Are Too Optimistic …

There has been a V-shaped recovery; in the stock market, not in the economy. That is dividing opinion between the doomsayers who think this divergence makes no sense, and those who believe that the Federal Reserve and its central bank peers have this covered — and that they’ll restore the economy to its former state.

That doyen of bargain hunters, Warren Buffett, has been conspicuous by his absence from the recent spate of share buying. Notably, he’s been a net seller of airline stocks.



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The S&P 500 lost one-third of its value between its record high on Feb. 19 and March 23. It has clawed back half of that as the Fed chucked out its rule book and went on a shopping spree for assets.

Equities are pretty much the only type of security that it won’t be adding to its ballooning balance sheet, although a fresh bout of market mayhem might change that too. America’s central bank is already snapping up exchange-traded funds and junk bonds, after all.

A 27% recovery in equities is surprising given that we still have no idea of the virus’s lasting impact on economic output, with only a very partial return to business activity planned and no vaccine in sight.

The surge in jobless claims and companies furloughing staff makes forecasting more art than science, much like Covid-19 statistics. As Torsten Slok, Deutsche Bank AG’s chief economist, points out, a decade of U.S. employment gains have been reversed in a month. The International Monetary Fund’s global economic predictions this week were the bleakest since the 1930s.

The monetary and fiscal response has been spectacular but can it prevent a permanent loss of growth if people’s consumption, travel and working practices have been altered fundamentally? A wave of defaults, credit downgrades into junk territory, bankruptcies and price drops in real assets such as aircraft and property would change the more positive stock market narrative quickly, as would a second wave of the virus.

Parts of the world, Europe in particular, were at risk of recession before the outbreak. Crude oil prices below $20 per barrel don’t suggest global demand will come roaring back.

The equity market is meant to reflect anticipated corporate earnings, and although it’s often given to wild optimism, this is an entirely new situation. How can anyone say with a straight face that they can estimate future earnings right now? There’s little point scouring through first-quarter results apart from looking at how much provisioning the banks are putting in place for loan losses and how much credit has been drawn down.

Any crisis throws up winners — Amazon.com Inc (NASDAQ:AMZN). shares have hit new highs — but most companies are losing. More than half of workers are employed by small- and medium-sized enterprises, which will struggle to get all the financial assistance on offer.

The latest Fed stimulus package adds another $2.3 trillion of support and from this week corporates can go directly to the central bank for commercial paper funding. The ability of the Fed to really sustain stock prices is going to be tested like never before. More stimulus is always being promised but after a decade of quantitative easing, there will be a limit to its effectiveness.

Catastrophe has been avoided but most of the emergency measures are geared toward liquidity and borrowing costs. Growth is the thing that matters most for equity valuations in the medium term, and no one can guarantee that.

Consumers will only return to familiar spending habits if they have regular income and governments don’t raise taxes to pay for the current splurge. More dividends will be cut or cancelled. The hit to earnings will only be partially recoverable as most consumption is immediate and large items such as cars and electrical goods can be put off for other years.

Equity markets are betting big on the lasting results of all the stimulus. A swifter end to lockdowns or a promising vaccine development would be something to get excited about. Until we have that, the confidence looks overdone.



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Global Stocks And U.S. Futures Gain Despite China GDP Plunge

Stock benchmarks in the Asia-Pacific region rose, while S&P 500 stock futures traded higher, pointing to a strong session for U.S. shares on Friday.



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Market watchers said a range of factors helped power the rally, including the prospect of the U.S. gradually getting back to work and some encouraging news on potential treatments for the new coronavirus. Investors were able to look past data showing an unprecedented—but widely expected —plunge in Chinese economic activity.

In early-afternoon trading in Hong Kong, E-mini S&P 500 futures gained more than 3%. Australia’s S&P/ASX 200, Japan’s Nikkei 225 and South Korea’s Kospi rose by about 2% to 3% each, and the Shanghai Composite Index added 0.9%, while Hong Kong’s Hang Seng Index advanced 2.3%.

Andy Maynard, managing director of equities sales and trading at China Renaissance Securities, said news about possible coronavirus treatments had buoyed markets. He said that while effective drugs might take years to develop, the developments were catalysts to say the situation isn’t as bad as feared and that markets would recover.

Shares of Gilead Sciences rose 15.1% in late U.S. trading after a report that one of its experimental drugs might be performing well in clinical trials of patients with Covid-19, the respiratory disease caused by the new coronavirus.

Ben Luk, senior multiasset strategist at State Street Global Markets, said other factors were also boosting sentiment in regional markets. Those included the prospect of the U.S. gradually reopening its economy and better-than-expected export figures from Singapore.

Singapore said Friday that exports, excluding oil, rose 17.6% in March from a year earlier, far better than the median 7.9% contraction forecast in a Wall Street Journal poll of 11 economists. “There’s more comfort that China continues to recover based on those export numbers,” Mr. Luk said.



Markets remained strong even as official statistics showed China’s economy shrunk 6.8% from a year earlier in the first quarter. That was the first year-over-year contraction since Beijing began reporting the quarterly figure in 1992, but it was less sharp than the 8.3% median forecast of economists polled by The Wall Street Journal.

“Everybody was expecting a very bad first quarter,” said Chi Lo, senior economist for Greater China at BNP Paribas Asset Management. Mr. Lo said the Chinese government’s goal of doubling the economy in size from 2010 to 2020, in real terms, or after adjusting for inflation, is now out of reach.

He added that the speed with which China’s economy returned to full strength would depend partly on how badly the pandemic hit overseas demand for its goods and services.

In the U.S., President Trump released new federal guidelines on reopening the economy that would leave decision-making largely up to governors. Mr. Trump said: “We must have a working economy, and we want to get it back very, very quickly.”

The Dow Jones Industrial Average and the S&P 500 on Thursday posted modest gains even after data showed another sharp rise in Americans seeking jobless benefits, and slumping construction of new homes.

Globally, confirmed cases of the new coronavirus reached nearly 2.2 million, with the U.S. accounting for nearly one-third of the cases, according to data from Johns Hopkins University. The number of deaths world-wide has topped 143,000.



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Global Stocks Waver Amid Growing Signs Of Coronavirus’s Economic Toll

U.S. futures and European stocks gained, even as some Asian indexes fell, as investors assessed how the coronavirus pandemic would affect economies.

Futures for the S&P 500 rose 1%, as did Europe’s pan-continental Stoxx Europe 600.

The Shanghai Composite in mainland China and South Korea’s Kospi reversed earlier losses to trade slightly higher. Hong Kong’s Hang Seng Index fell around 0.7%.

Japan’s Nikkei 225 and Australia’s S&P/ASX 200 index both closed more than 1% lower.

Major banks declined, after a big drop overnight in U.S. Treasury yields, with HSBC Holdings PLC, Mitsubishi UFJ Financial Group MUFG -3.82% and Commonwealth Bank of Australia falling between 1.7% and 2.1%.

The Dow Jones Industrial Average slid 1.9% Wednesday, as retail-sales and manufacturing data refocused investors’ attention on the costly toll of sweeping lockdown measures to contain the coronavirus. The Federal Reserve said Wednesday that economic activity “contracted sharply and abruptly,” resulting in lost jobs and lower wages.

“The initial shock phase is behind us,” said Stefan Hofer, chief investment strategist at LGT Bank Asia, but as hard data emerges on the economic impact of lockdowns, “the market will still react to that negatively.”

Nearly 17 million Americans have already made new filings for unemployment benefits since mid-March. U.S. jobless claims for the week ending April 11 are due Thursday.

Daryl Liew, chief investment officer at REYL Singapore, said the pullback in shares, following a sharp rebound in recent weeks, reflected concerns a drawn-out pandemic could extend the economic downturn.


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“Containment strategies will probably be in place for far longer than expected, and if this thing is prolonged, you’re going to get insolvency risks. Companies might really struggle to stay afloat,” he said.

Confirmed cases of the coronavirus have passed 2.06 million globally, according to data from Johns Hopkins University, with the U.S. accounting for about a third of those. The global death toll exceeded 137,000.

Oil prices remained weak on concerns about slumping demand. West Texas Intermediate, the main U.S. crude gauge, inched up to $19.95 a barrel. It closed on Wednesday at $19.87, below the $20 mark for the first time since 2002.

Mr. Hofer of LGT Bank said the collapse in demand for crude oil outweighed historic output cuts from the Organization of the Petroleum Exporting Countries and others including Russia.

“The outlook for oil is basically lower for longer,” he said. For U.S. crude, he said, “$20 is the floor perhaps, but going above $30 over the next 12 months seems unlikely.”

Brent crude, the global oil benchmark, bounced 1%, after falling more steeply than its U.S. equivalent in the previous session.

The yield on the 10-year U.S. Treasury note, a security that is seen as a haven, was little changed at 0.641%, according to Tradeweb, after government bonds rallied in the previous session.

The dollar extended gains Thursday. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, rose about 0.3% to 94.



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Stock Markets Around The World Rose On Optimism That Economic Activity May Improve In The Near Future

Futures tied to the Dow Jones Industrial Average rose 1.5%, suggesting U.S. stocks could gain ground later in the day. The pan-continental Stoxx Europe 600 advanced 1.2%. Asia-Pacific stock indexes also rose Tuesday. The benchmark Shanghai Composite Index closed up 1.6%.

Global coronavirus infections topped 1.9 million, with more than 119,000 deaths, according to Johns Hopkins University data. The number of new cases each day appeared to level off in the U.S., and President Trump told reporters his administration is nearing completion of a plan to reopen the country “hopefully ahead of schedule.” But in Europe, France, Italy and Spain extended lockdowns to curb the spread of the virus.



Investors are watching for news about the length of the lockdowns to try to call when the market has reached a trough and could be set to rise again, said Georgina Taylor, a multiasset fund manager at Invesco.

“Anything that suggests that it’s not a complete catastrophe, people will take that as the bottom,” she said.

Stocks in mainland China were buoyed by better-than-feared trade data, which showed exports in March down 6.6% from a year earlier, and imports down just 0.9%. Economists polled by The Wall Street Journal had forecast declines of 15.9% and 10%, respectively.

Daniel Gerard, senior multiasset strategist at State Street Global Markets, said the pandemic presents investors with an economic calamity unlike either the Great Depression or the global financial crisis, and markets are cycling between fear and relief as headlines change.

“The market may be excited today about China’s trade data being better than expected, but tomorrow it may think it is not enough,” he said.

While China’s trade figures were much better than expected, there were no serious lockdowns outside the country until mid-March, and since then orders have been cut back, said Iris Pang, chief economist for Greater China at ING Bank NV in Hong Kong.

“This will heavily weigh on export and import figures for April and May, at least,” she said.

Elsewhere, Hong Kong’s Hang Seng Index edged up by 0.7%, Japan’s Nikkei 225 closed 3.1% higher, boosted by electronics and retail stocks, while South Korea’s Kospi Composite advanced 1.9%.

Mr. Gerard at State Street said any global economic recovery would be uneven, and while panic-selling had ceased, fundamental questions about corporate profits remain. Investors will need to distinguish temporary damage to earnings from longer-term hits, something that won’t be easy until the second half of the year, he said.

Oil prices edged up. The global benchmark Brent crude climbed 1%, trading at $32.04. The Organization of the Petroleum Exporting Countries and its allies agreed to jointly reduce production by 9.7 million barrels a day after a marathon series of talks from Thursday to Sunday.


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The rally is modest because the fall in energy demand from the economic slowdown still outweighs the production cuts made over the weekend, said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB.

“It’s very clear that demand loss is tremendous. They [OPEC] are not cutting enough in the short term to prevent inventory build.’’

Earnings season will begin this week, with some of the largest U.S. banks reporting in the coming days. JPMorgan Chase & Co will release its financial statements Tuesday, followed by Goldman Sachs, Bank of America and Citigroup Wednesday.

Also Tuesday, the International Monetary Fund will put out its world economic outlook, which will kick off a week of virtual meetings with a focus on the downturn caused by the coronavirus.


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China’s Trade Slump Eases In March, But Pandemic Set To Deepen Export Downturn

The plunge in China’s exports and imports eased in March as factories resumed production, but shipments are set to shrink sharply over coming months as the coronavirus crisis shuts down many economies and puts the brakes on a near-term recovery.

Financial markets breathed a sigh of relief after customs data on Tuesday showed overseas shipments fell 6.6% in March year-on-year, improving from a 17.2% slide in January-February, as exporters rushed to clear a backlog of orders after forced production shutdowns.

Economists had forecast shipments to drop 14% from a year earlier.


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Yet, while the trade figures were not bad as feared, analysts say the export and overall growth outlook for the world’s second-biggest economy remains grim as the pandemic has brought business activity across the globe to a standstill.

“The above-expectation March trade figures do not mean that the future is carefree,” said Zhang Yi, Beijing-based chief economist at Zhonghai Shengrong Capital Management.

Zhang said he expects first-quarter gross domestic product data on Friday will likely show a contraction of 8% – the first quarterly slump since at least 1992. Analysts’ forecasts for China’s first quarter GDP ranged widely between a contraction of 2% and 16%.

“A decline in exports throughout the second quarter has been the market consensus now and a drop of 20% or more is a high-probability event. For policymakers, more policies should be rolled out to address the possible societal issues stemming from mass-scale unemployment,” Zhang said.

The data showed imports slid 0.9% from a year earlier, also above market expectations of a 9.5% drop, which the customs attributed to improving domestic demand. They had fallen 4% in the first two months of the year.

The better imports picture partly reflected shipments that were stuck in ports being cleared and catch-up demand as authorities eased restrictions. Yet, domestic consumption was far from robust with key imports such as iron ore dipping in March, underlining the broad economic strains.

“Imports should hold up better given that domestic demand looks set to stage a further recovery in the coming months,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“But the quarter of China’s imports that feed into China’s export sector will continue to fall and hold back the recovery in imports.”

The overall trade surplus last month stood at $19.9 billion, compared with an expected $18.55 billion surplus in the poll and a deficit of $7.096 billion in January-February.

Stock markets in Asia extended their gains after China’s trade report, while risk sensitive currencies including the Australian and New Zealand dollars as well as the pound pulled ahead, mainly on relief on the less gloomy data. [MKTS/GLOB]

JOBS, INCOME, EXPORTS PRESSURED

China, where the novel coronavirus first emerged late last year, has reported 82,249 infections and 3,341 deaths as of April 13. Worldwide, infections have surpassed 1.8 million with over 119,000 deaths.

The pandemic’s sweeping impact on businesses and consumers has triggered an unprecedented burst of stimulus from policymakers in the past two months, with the World Trade Organization forecasting that goods trade would shrink more steeply this year than during the global financial crisis.

Beijing is trying to restart its economic engines after weeks of near paralysis to contain the pandemic that had severely restricted business activity, flow of goods and the daily life of people.

But as the virus rapidly spread to almost all of China’s trading partners, severely restraining overseas demand particularly in European and U.S. markets, Chinese factories’ export orders have been scrapped. Many privately-owned exporters have been forced to fire workers and warned about factory closures in not too distant future.

UBS Economist Tao Wang predicted that exports would decline by 20% on-year in the second quarter and 12% for the whole of 2020.

Wenzhou Juna Shoe Industry Co, which used to export 90% of its leather shoes to Russia, South Korea and Australia, had 30% of its orders cancelled last month, with clients delaying the shipments of another 20%, according to a report from China Central Television (CCTV) on Sunday.


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Half of its production lines were suspended overnight, said CCTV, citing the company manager Wan Jiayong.

Customs spokesman Li Kuiwen also warned about the difficulties facing foreign trade.

“Shrinking global demand is set to cause a shock to our country’s exports, and issues such as declining export orders have gradually emerged. The difficulties facing our foreign trade development cannot be underestimated,” said Li.

Indeed, both official and private factory surveys for March showed new export orders declined even further from February when production in the country was paused, with few signs of a strong near-term recovery.

Analysts say consumer appetite would also remain depressed as many people are worried about the possibility of new infections, job security and potential cuts to wages as the economy struggles, analyst warned.

“The sharp decline in exports and trade could put another over 10 million jobs related to exports at risk in the next couple of quarters,” UBS’ Wang said.


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U.S. Stocks Open Lower

U.S. stocks fell in early trading Monday, while oil prices faltered as a multinational agreement to cut crude production failed to assuage concerns that global oil markets will stabilize as the coronavirus pandemic erodes energy demand.

The S&P 500 index shed 0.4%, while the Dow Jones Industrial Average fell 91 points, or 0.4% and the Nasdaq Composite Index retreated 0.5%. Stock benchmarks in Tokyo, Shanghai and Seoul closed lower, while markets in Europe, Australia and Hong Kong remained shut for the Easter holiday.

Brent crude, the global gauge for crude prices, ticked down 0.5%, extending its rout this year to over 52%. Saudi Arabia, Russia and the U.S. agreed to lead a deal to collectively pull out more than 13% of world production. Combined with existing sanctions on Iran and Venezuela and outages in hot spots such as Libya, the measures could help withhold 20 million barrels a day of supplies from the market, OPEC said in the draft press release.


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Specific details have yet to be disclosed, including whether the U.S. would make additional cuts beyond its commitment to compensate for shortfalls in Mexico’s output reduction, and how the U.S. cuts would be implemented. The benchmark for U.S. crude futures wavered between gains and losses before ticking up 0.6% to $22.90 a barrel.

While the accord is aimed at curbing the glut in oil supplies and preventing a further crash in crude prices, traders remain concerned that a protracted recession in many parts of the world will weigh heavily on demand for oil. Amid travel restrictions and a halt in business activity, oil consumption is expected to fall by as much as 30 million barrels a day this month.

The agreement “unfortunately will fall well short of stabilizing oil markets,” Edward Moya, a senior market analyst for foreign-exchange broker Oanda, wrote in a note. “The number of holes in this production cut deal will make it hard for anyone to feel confident that a firm bottom is in place.”

Investors are also concerned that a too-speedy or careless end to lockdown measures in the U.S. and elsewhere may lead to a second wave of infections as calls for easing restrictions gain momentum. Some officials in President Trump’s administration have suggested reopening the U.S. economy by May 1 by allowing some business activity to resume.

“The most imminent challenge facing policy makers is a workable exit strategy that will prevent long-lasting global economic depredation,” Stephen Innes, chief global markets strategist at Sydney’s AxiCorp Financial Services, wrote in a note. “Top officials have no solid plan that will allow Americans to resume work out of harm’s way as the coronavirus pandemic rages.”

The U.S. leads the world in number of confirmed cases, with more than 550,000 infections known, and fatalities of more than 21,700. Globally, the number of confirmed coronavirus cases topped 1.8 million on Sunday.


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Later this week, investors will get insights into how the American financial sector is withstanding the turmoil in markets and the economy when major U.S. banks led by JPMorgan Chase, Bank of America and Goldman Sachs Group report quarterly earnings. Some blue-chip American companies including Johnson & Johnson are also scheduled to release results, offering a first look at the impact of social-distancing measures on corporate profits.

Almost 300 companies have withdrawn their financial guidance and about 175 companies have suspended stock buybacks or cut their dividend, according to a Wall Street Journal analysis of public companies in the S&P Composite 1500 Index. A record 17 million people have claimed unemployment benefits as the lockdown spurred a wave of layoffs and furloughs.

Wall Street’s consensus expectations for S&P 500 companies’ earnings remains too high, Goldman Sachs Group analysts said in a note. Expectations for companies’ 2021 earnings will weigh on equity markets as corporate leaders begin to offer fresh projections for their businesses, the analysts wrote.

In Asian equity markets, Japan’s Nikkei 225 dropped 2.3%, while South Korea’s Kospi lost 1.9% and the Shanghai Composite Index slid 0.5%.

“The extreme volatilities in the markets might be behind us,” said Homin Lee, Asia macro strategist at Lombard Odier in Hong Kong. He said the focus of the markets is on Covid-19, the disease caused the coronavirus, and the road map to reopening of the global economy.

Last week, the S&P 500 climbed 12% to record its best weekly performance since 1974. While the index is down 14% for the year, it has rallied 25% from its March 23 low.

The yield on the 10-year U.S. Treasury note ticked up to 0.754%.



Earnings Season Offers Next Test For Rebounding Stock Market

‘We haven’t really seen markets reflect the full extent of the damage that coronavirus is having to corporate profitability,

The kickoff of earnings season this week will give investors a first glimpse of the impact of the coronavirus shutdown on corporate profits—and potentially clues about the outlook for the rest of the year.

Those results will offer a test for a stock market that is attempting to rebound after a bruising selloff. The pandemic is expected to cause a severe economic contraction and a sharp decline in corporate earnings in 2020. What remains unknown is the extent of the damage.

Companies from General Electric Co. to FedEx Corp. and Starbucks Corp. have warned they can no longer forecast their own results in a period of such uncertainty. Businesses across the country say revenue has evaporated following stay-at-home orders and the closure of nonessential businesses, leading them to furlough employees and drastically cut spending as they try to stay afloat.

Despite the turmoil, stocks have rallied over the past three weeks on early indications that social-distancing practices are helping to slow the spread of the virus. The S&P 500 climbed 12% last week, its best weekly performance since 1974, and it has rallied 25% from its March 23 low. The index is still down 14% for the year.



“It’s been remarkable to watch markets just climb higher and higher,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “We haven’t really seen markets reflect the full extent of the damage that coronavirus is having to corporate profitability.”

For that reason, some analysts worry the stock market is on the cusp of a reckoning and another painful selloff could be in store if corporate profits plunge. Others fear Wall Street’s current earnings estimates don’t fully reflect the extent of the expected carnage. Because projections for earnings are a key part of how stocks are valued, the opaque view into corporate profits suggests major indexes could see more volatility ahead.

Big banks including JPMorgan Chase & Co. and Bank of America Corp., along with health-insurance giant UnitedHealth Group Inc., transportation bellwether J.B. Hunt Transport Services Inc. and health-products company Johnson & Johnson, will be among the first big companies to open their books this week. While those results will be of great interest, investors will more carefully scrutinize comments from executives for indications of what will come later this year.

“There is more uncertainty for this quarter than almost any quarter I can remember,” said Bob Doll, chief equity strategist and senior portfolio manager at Nuveen. “My guess is somewhere between a half and three-quarters of analysts have yet to take a knife to their earnings [estimates] because they don’t know what knife to take to them and how deep to cut.”

The range of estimates reflects the deep uncertainty about the path ahead. FactSet projects a 9% year-over-year decline in earnings for all of 2020, based on analysts’ expectations for individual companies in the S&P 500, a sharp reversal from the 9.2% growth anticipated as last year ended.

Such a decline pales in comparison with the profit collapse forecast by big banks. BofA Global Research projects a 29% drop in per-share earnings this year, an estimate that incorporates “cataclysmic losses in travel, restaurants and other industries directly impacted by social distancing.” Goldman Sachs has predicted profits will tumble 33%, while cautioning that in a more painful slowdown, the decline could be 57%.

The second quarter is expected to see the brunt of the damage based on the current scale of the shutdown. Profits among companies in the S&P 500 are projected to drop 21% in the current quarter after sinking 11% in the first three months of the year, according to FactSet estimates. In the second half of the year, profits are expected to continue shrinking, but at a slower pace, falling 9.6% in the third quarter and 1.6% in the fourth.

“We’ve never, ever, ever seen a sudden stop of the economy,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. “That’s why this is going to be such a scrutinized petri dish, if you will, of an experiment for people to understand, really, what are the companies that have a true resilient and recurring revenue stream?”

First-quarter earnings forecasts have dropped for all 11 sectors in the S&P 500. The pain is projected to be particularly acute among companies in the consumer-discretionary group—a category that includes hotels, cruise lines and restaurants—where profits are expected to sink 32% from a year earlier, according to FactSet.

Marriott International Inc., for one, has begun furloughing what it expects will be tens of thousands of employees, while temporarily closing properties and curbing other spending. Shares of the company, which has withdrawn its financial guidance, are down 46% this year.

Meanwhile, earnings among energy companies, which have been hit both by an unprecedented drop in demand and the price war between Saudi Arabia and Russia, are expected to plummet 52%. Both Exxon Mobil Corp. and Chevron Corp. have slashed their capital spending plans in response to the crash in oil prices. Those stocks are off more than 30% in 2020.


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One of the brighter spots is expected to be the communication-services sector, which includes Facebook Inc. and Google parent Alphabet Inc. Earnings among those companies are projected to grow 7.8%, down from an expected 17% growth at the end of last year. Analysts are calling for profits at Facebook to more than double, despite a slowdown in advertising due to the pandemic. Its shares are down 15% this year, in line with the broader market.

“We’re looking forward to earnings season with a particular fascination to see what we learn about different companies’ business models,” Morgan Stanley’s Ms. Shalett said. “We’re also going to be put in a place where we have to all think really hard about to what extent is both consumer and business behavior changing, semi-permanently or permanently because of this trauma and this sudden stop in the economy.”



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Financial Markets – Top 5 Things to Watch This Week

Investors will be awaiting the International Monetary Fund’s updated forecasts for the global economy this week, which are expected to show a steep downward revision amid the impact of restrictions aimed at containing the spread of the coronavirus pandemic.

U.S. figures on weekly initial jobless claims have been the key indicator to watch and will continue to be in focus this week, while March U.S. retail sales figures are expected to show an unprecedented slowdown.



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A flurry of appearances by Federal Reserve policymakers along with first quarter earnings reports will be an important barometer of the economy. Meanwhile, the biggest supply cut ever contemplated by the world’s top oil producers continues to hang in the balance. Here’s what you need to know to start your week.

IMF forecasts
The IMF will release its detailed World Economic Outlook forecasts on Tuesday after the IMF and World Bank Spring Meetings, which will be held by video conference as a result of the pandemic.

IMF Managing Director Kristalina Georgieva warned last Thursday that the pandemic will turn global economic growth “sharply negative” in 2020, triggering the worst fallout since the 1930s Great Depression, with only a partial recovery seen in 2021.

In remarks prepared for delivery ahead of the Spring meetings, Georgieva said the “bleak outlook” applied to advanced and developing economies alike. “Everybody hurts. Given the necessary containment measures to slow the spread of the virus, the world economy is taking a substantial hit.”

Her speech also underlined the need for the meeting to offer debt relief and to agree an increase in the IMF’s financial firepower so it could help the world’s poorest countries through the crisis.

Economic data to show depth of fallout
Investors will once again be focusing on Thursday’s report on weekly jobless claims, which are expected to be in the millions again. The number of Americans seeking unemployment benefits in the last three weeks has topped 15 million.

“In its first month alone, the coronavirus crisis is poised to exceed any comparison to the Great Recession,” said Daniel Zhao, senior economist at Glassdoor. “The new normal for unemployment insurance claims will be the canary in the coal mine for how long effects of the crisis will linger for the millions of newly unemployed Americans.”

But this week’s calendar also features data on March retail sales and industrial production, giving markets a broader range of figures to quantify the economic impact of the virus. Retail sales are expected to post the largest drop at least three decades, after city and state shutdowns spread across the country and millions lost their jobs. Industrial production data could show the largest decline in the post-World War 2 era.





Fed speakers
Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic are all scheduled to make appearances this week, with investors keen to hear how policymakers view the scale of the economic downturn.

The Fed has slashed rates to zero, launched open-ended bond purchases and introduced a suite of emergency lending tools in response to the economic shockwaves unleashed by the virus.

Last week’s Fed minutes indicated that officials expect current ultra-loose monetary policy measures will remain in place against a “profoundly uncertain” backdrop, with the economy expected to enter a recession this year and not recover until next year in a worst-case scenario

The Fed is also to publish its Beige Book on Wednesday.

Earnings season
First quarter earnings season kicks off with the six largest banks in the U.S., including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) set to report.

Investors will be watching for any indications that banks are scaling back on lending, which could be a sign of a prolonged recession. Also, the Federal Reserve said Thursday it will be working directly with banks to deliver much of its financial support to businesses.

Pharmaceutical giant Johnson & Johnson (NYSE:JNJ) is due to report on Tuesday, while Abbott Laboratories (NYSE:ABT) is set to report on Thursday.

Earnings reports will also give an insight into just how badly retailers such as Bed Bath & Beyond (NASDAQ:BBBY), which is due to report on Wednesday, have been hit.

Oil output cut deal hangs in the balance
The biggest supply cut ever contemplated by the world’s top oil producers is hanging in the balance with Mexico resisting pressure from Saudi Arabia to sign up to global cuts worth nearly a quarter of output for participating countries.

The cuts are aimed at boosting prices from their lowest level in decades. Oil prices have collapsed as the coronavirus epidemic locked down economies around the world, decimating fuel demand and Saudi Arabia and Russia flooded the market in a price war.

The refusal by Mexican President Andres Manuel Lopez Obrador to compromise his plan to revive state oil company Pemex by agreeing to the cuts has shone the global spotlight on Mexico and angered Saudi Arabia.

In a compromise hammered out with U.S. President Donald Trump, Lopez Obrador said on Friday the United States had offered to cut an additional 250,000 bpd on Mexico’s behalf, bringing them close to the target.

However, Saudi Arabia – the heavyweight of global oil diplomacy – has balked at that and dug in its heels, despite some other producers from the group of OPEC nations and their allies – known as OPEC+ – calling for the cuts to go ahead regardless.

OPEC+ made its commitment to cut a record 10 million barrels a day conditional on Mexico’s agreement.




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Pfizer Identifies Lead Coronavirus Drug Candidate

Pfizer Inc. has found a promising but early potential coronavirus treatment, which the drugmaker aims to begin testing in patients this summer.

Laboratory research suggests the drug candidate blocks the new coronavirus from replicating, Pfizer research-and-development chief Mikael Dolsten said in an interview. The findings indicate the experimental drug could slow or stop the spread of the virus in patients with mild-to-moderate symptoms, though human testing will be necessary for proof.


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The early progress is among several developments in Pfizer’s multipronged efforts to find coronavirus drugs and vaccines.

Pfizer will also start testing its approved rheumatoid-arthritis drug Xeljanz in coronavirus patients in Italy this week to see whether the therapy has a benefit, Dr. Dolsten said. And the company is planning to publish research on whether one of its antibiotics helps.

In addition, Pfizer has been working with BioNTech BNTX +7.88% SE of Germany to develop a vaccine based on an emerging gene-based technology. Pfizer said it plans to move into clinical trials as early as the end of this month with four different vaccines simultaneously, and aims to move the best one forward in future studies.

“I feel confident that we will win, battle by battle, to turn around this viral war against our society,” Dr. Dolsten said.

There are no approved medicines to treat or prevent the new coronavirus, which causes the disease known as Covid-19. The testing required to assure the drugs and vaccines work safely is expected to take months.

Dozens of companies and university researchers have been hustling to develop therapies or vaccines against the virus. More than 140 are in development world-wide, most in early stages, including about a dozen already in clinical trials, according to Informa Pharma Intelligence.

Among the other drugmakers working on treatments are Eli Lilly & Co., Gilead Sciences Inc. and Takeda Pharmaceutical Co.

Pfizer, based in New York City, assembled a team of 50 researchers from various departments to work on the coronavirus, and ramped up projects exploring different potential medicines.

One challenge the drugmaker confronted was reconstituting antiviral research after disbanding the department in 2009. To limit interactions among personnel, the company’s coronavirus team has yet to meet in person.

The team reviewed compounds that have shown activity against other coronaviruses, including severe acute respiratory syndrome, or SARS, Dr. Dolsten said.

Pfizer’s lab research suggests that its lead drug and similar candidates are strong blockers of a key enzyme, known as a protease, that helps viruses replicate, Dr. Dolsten said. Pfizer plans to begin studying the lead drug in patients as early as August, several months ahead of schedule.

“Time is urgent here,” he said. “Every hour, every day counts.”

To be able to make sufficient supplies of the drug candidate for testing, Pfizer several weeks ago bought the raw materials needed to manufacture the medicine, said Charlotte Allerton, who leads Pfizer’s medicine design.

Pfizer expects the trial in Italy evaluating Xeljanz’s effect on coronavirus patients to finish in July. The company says the drug could help damp an overactive immune response that occurs in some patients and can lead to respiratory failure and death.

Other anti-inflammatory drugs, such as Roche Holding AG RHHBY -2.81% ’s Actemra, have shown signs of working on coronavirus patients who suffer from respiratory problems. Xeljanz functions differently than Actemra, and could be an alternative for patients who don’t respond to anti-inflammatory drugs such as Roche’s drug, Dr. Dolsten said.

Pfizer expects to publish its findings on the anticoronavirus powers of the antibiotic azithromycin, which Pfizer sells under the brand name Zithromax. Many doctors, lacking proven options, are treating Covid-19 patients with the antibiotic and antimalaria drugs.


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Pfizer also plans to begin two studies with the U.K.-based Liverpool School of Tropical Medicine to investigate whether coronavirus patients are at higher risk of developing pneumococcal pneumonia and if having both infections leads to more-severe disease.

The company’s partnership with BioNTech is exploring a vaccine based on the gene-based technology known as messenger RNA. Messenger RNA, or mRNA, carry instructions from DNA to the body’s cells to make certain proteins.

No mRNA vaccines have been approved. Moderna Inc. has begun testing its mRNA coronavirus vaccines in patients. Inovio Pharmaceuticals Inc. has begun testing a DNA vaccine.

Last month, Pfizer said it would make some of its research on the virus available publicly online for other researchers. The drugmaker also said it would offer available manufacturing capacity to other companies, if they win approval and require help making their medicines.





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Global Stocks Edge Higher As Trading Volumes Ebb

Global stocks wobbled Thursday as trading volumes slid ahead of the long Easter holiday weekend, while oil markets were buoyed by optimism that major crude producers including Russia may agree to cut output.

Futures tied to the Dow Jones Industrial Average drifted up 0.3%, following a 3.4% rally in the blue-chips gauge on Wednesday. The pan-continental Stoxx Europe 600 index edged up 0.5%.



U.S. crude futures rallied 5%, or by $1.28 a barrel, while Brent crude, the global benchmark for oil prices, gained almost 4%.

Speculation that the Organization of the Petroleum Exporting Countries and its allies were considering steep cuts to production gave U.S. energy stocks a boost on Wednesday. That optimism was boosted further by reports that Russia was mulling deeper cuts than traders had expected.

OPEC members and their allies, including Russia, are scheduled to hold a crucial videoconference later in the day. A Texas regulator also said the U.S. could reduce production by four million barrels of oil a day.

“If you get a cut in output, I don’t think necessarily you’re going to see oil prices back up to $70, but you won’t see oil prices go to single digits,” said Justin Onuekwusi, head of retail multiasset funds at Legal & General Investment Management. “You’re going to create a floor under the oil price and remove some of the uncertainty from markets overall.”

Investors are also looking ahead toward a gradual economic recovery in the second half of the year in the U.S., following a severe economic contraction and a spike in unemployment. Nearly 85% of the economists in a Wall Street Journal survey predicted annualized growth rates of 6.2% in the third quarter, followed by 6.6% in the fourth quarter.

Globally, the number of confirmed coronavirus cases rose to nearly 1.5 million, with more than 88,500 deaths, according to data compiled by Johns Hopkins University. The disease it causes, known as Covid-19, has killed more than 14,800 people in the U.S. in slightly over a month.

“Investors are not putting the risk of a resurgence on the top of their minds right now,” said Eli Lee, head of investment strategy at Bank of Singapore. The risk of a second or subsequent wave of infections would bear watching as this could prolong containment measures, leading to a longer recession than expected, he cautioned.

The yield on the 10-year U.S. Treasury note fell to 0.748%, from 0.762% on Wednesday. Bond yields fall as prices rise.

Later in the day, new figures for U.S. initial jobless claims for the week ending April 4 are expected to remain elevated at about 5 million as swaths of the economy have shut down. Nearly 10 million Americans—more than the entire labor force of New York state—filed applications for unemployment insurance during the two-week span ending March 28. The data is due out at 8:30 a.m. ET.

“We’re seeing an unprecedented use of the word unprecedented,” said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe, the Middle East and Africa. “The graph just looks nuts. We’ve never had this kind of enforced closure of an economy before, especially the largest economy.”

While the weekly numbers are likely to be “huge,” many of the claims will probably prove to be temporary and not permanent job losses, according to Anton Brender, chief economist at Candriam.


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Many of the world’s major stock markets will be closed Friday for public holidays, although markets in South Korea, mainland China and Japan will be among those trading.

In the Asia-Pacific region, Australia’s stock benchmark closed the week 6.3% higher. That was its third consecutive week of gains, although it remains nearly 25% below a record close on Feb. 20. Chinese and South Korean equity benchmarks ended the day higher, while Japan’s Nikkei 225 was flat.






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Stock Market Today: Dow, S&P Start Higher, European Stocks Drop As Investors Point To ‘Vacuum Of Data’

Share benchmarks rose Wednesday, following a roller-coaster session on Wall Street that saw a strong rally in the major benchmark indexes ending abruptly with a precipitous drop.

The Dow Jones Industrial Average edged 1.4% up, or 330 points. The S&P 500 rose 1.3%, while the tech-heavy Nasdaq Composite Index also advanced 1.3%. Tuesday, the blue-chip index gave up a 4.1% advance to close 0.1% lower.

“A vacuum of data is leading to this volatility, rather than a shift in sentiment,” said Edward Park. deputy chief investment officer at Brooks Macdonald. The shifting mood in oil markets is also impacting sentiment among equity investors, he said, as traders speculate about the outcome of a meeting between major crude oil producers on Thursday.


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The indicators came on top of the news that European Union finance ministers had suspended talks on an economic crisis response on Wednesday morning, underscoring the deep differences within the bloc over how to share the mounting costs of the health crisis. Ministers had hoped to agree to a package of measures that could have provided half a trillion euros worth of support for the economy.

“There’s disappointment,” said Florian Hense, European economist at Berenberg Bank. “The longer it takes for finance ministers and leaders to come up with a solution, the weaker their ability to sell it to their home audience. We’re not talking about economics any longer, but politics.”

Any agreement reached would be a welcome signal for markets, Mr. Hense said. Investors continued to pull out of Italian bonds, which are considered riskier assets. The yield on 10-year Italian bonds rose to 1.699%.

In a sign of investors’ wavering risk appetite, the yield on the 10-year U.S. Treasury ticked up to 0.764%, from 0.735% Tuesday, after declining earlier in the day.

In trying to assess the depth of the looming recession that will be triggered by the coronavirus shutdown, some investors are examining the support offered by the Federal Reserve, and how quickly it will prove to be effective in bolstering economic activity.

As well as slashing interest rates, the central bank announced other aggressive measures in March, pledging to buy government bonds, corporate-bond funds and municipal debt. It has boosted the short-term cash markets and even arranged to lend directly to companies.

Bear markets tend to last longer than we think,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham. “Although we have shock and awe with relaunching QE, we don’t know that the on-the-ground economic support is going to be there quickly.”

In commodities, U.S. crude futures climbed 1.5% to $24.01 a barrel. American Petroleum Institute data released late Tuesday reportedly showed U.S. crude inventories rose by more than expected. The prices are too low for U.S. producers, leading to a significant slowdown in drilling activity, ING strategists said. The Energy Information Administration’s short-term energy outlook forecasts that U.S. oil output in 2020 will decline by 470 million barrels a day from the previous year, taking it down from a previous forecast of 770 million barrels a day growth.

The U.S. death toll from the new coronavirus rose sharply, with nearly 50% more people killed Tuesday than any previous day in the epidemic, according to a Wall Street Journal analysis of data from Johns Hopkins University. European countries with falling infection rates began easing their restrictions, while some Asian leaders called for extended lockdowns to fight the pandemic.

In Asia, Japan’s Nikkei 225 closed 2.1% higher. Late Tuesday, the government said it plans to pay households and businesses directly as part of a nearly $1 trillion economic package. It could subsequently use stimulus money to encourage consumer spending and travel.


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Investors are watching closely for when U.S. infections peak and start to decline, and when shutdowns are lifted, according to Kelvin Tay, regional chief investment officer at UBS Global Wealth Management in Singapore. In time, he said, investor focus would shift to 2021 corporate earnings, and how quickly economic activity can recover.

Since the Federal Reserve last month made use of a range of tools—adopting “the entire playbook” it developed during the 2008 global financial crisis—in quick succession, market functioning has improved, Mr. Tay said. “The markets have exited the panic-selling mode.”

Later in the day, the Fed is scheduled disclose what was discussed at its meetings in the first half of March, offering fresh insights into policy makers’ willingness to take additional steps as the outlook deteriorates. Costco Wholesale will also report March sales after the closing bell in New York, giving investors a view on how the pandemic has affected the retailer’s operations.







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Oil Rises As Markets Eye OPEC, Russia Meeting On Output Cuts

Oil rebounded on Wednesday after a two-day fall, lifted by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts to shore up prices that have crumbled amid the coronavirus pandemic.

Brent crude was up by 21 cents, or 0.8%, at $32.08 per barrel by 0639 GMT after falling 3.6% on Tuesday. U.S. West Texas Intermediate (WTI) crude rose 82 cents, or 3.8%, to $24.45 a barrel after dropping 9.4% in the previous session.


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Thursday’s videoconference meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, is widely expected to be more successful than their gathering in early March. That ended in failure to extend cuts, and a price war between Saudi Arabia and Russia amid slumping demand.

But doubts remain over the role of the United States in any production curbs.

“Whether the United States will join output cuts is closely watched as the market’s focus remained on OPEC meeting,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul. “Oil prices have been volatile as the market is in wait-and-see mode.”

Saudi Arabia, other OPEC member countries and Russia, a grouping known as OPEC+, are likely to agree to cut output, but that accord could be dependent on whether the United States would go along with cuts. The U.S. Department of Energy said on Tuesday that U.S. output is already declining without government action.

Iran’s Oil Minister, Bijan Zanganeh, said Iran does not agree with holding any OPEC+ meeting without a clear-cut proposal and expected outcome from such talks, according to a letter sent to OPEC and seen by Reuters.

“Saudi Arabia and Russia continue to hammer out a deal … What is clear is that the United States must be involved,” ANZ Research said in a note.

U.S. crude production is expected to slump by 470,000 bpd and demand is set to drop by about 1.3 million bpd in 2020, the U.S. Energy Information Administration (EIA) said on Tuesday.

U.S. crude inventories jumped by 11.9 million barrels to 473.8 million barrels in the week to April 3, according to data from the American Petroleum Institute (API) released on Tuesday.

With a drop in fuel demand amid the virus outbreak, gasoline stocks also rose by 9.4 million barrels, marking the biggest one-week gain in the API figures since January 2017.

Official data from the EIA is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.





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Stocks Climb, Trying To Extend Winning Streak

U.S. stocks rose sharply Tuesday, buoyed by early indications that the spread of the coronavirus pandemic was slowing in some hot spots around the world.

The Dow Jones Industrial Average rallied 2.8% in midday trading, a day after rising almost 8%. The S&P 500 and the Nasdaq Composite also jumped, climbing 2.3% and 1.5% respectively. All three indexes are attempting to rally for the third time in four sessions, though they remain down about 20% from their mid-February highs.

New York Gov. Andrew Cuomo said Tuesday that the state’s hospitalization rate has showed signs of slowing, and other hard-hit countries in Europe, including Italy and Spain, have reported a slowdown in new infections following strict containment measures.


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“It’s hard to reject the view that things are improving,” said Paul O’Connor, head of multiasset at Janus Henderson. “Markets have been celebrating this in the last couple of days.”

Still, the trends are preliminary and authorities have warned that the coronavirus infections in the U.S. and U.K. are likely to worsen in the coming week. Even as demand for intensive care units has flattened in New York, Mr. Cuomo said Tuesday that deaths related to the virus hit a record Monday. So far, nearly 5,500 people have died from the virus in the state, representing almost half of all U.S. deaths.

Even more, economic indicators have shown that a deep recession may be looming. The Mortgage Bankers Association said Tuesday that mortgage forbearance requests grew 1,896% between the weeks of March 16 to March 30. The spike comes as millions of Americans have sought unemployment benefits after the pandemic shuttered businesses.

Markets have swung sharply in recent weeks as investors have tried to make sense of a fast-spreading pandemic that has warranted unprecedented responses by the Federal Reserve and U.S. government. Monday’s gain marked the 12th consecutive trading day that the Dow moved up or down at least 1%.

All 11 sectors of the S&P 500 marched higher Tuesday. Only two of the 30 stocks in the Dow Jones Industrial Average, Merck and Pfizer, ticked lower.

Travel and leisure stocks were again among the best performers in the U.S. and Europe. United Airlines Holdings jumped 8.3%, American Airlines Group rose 15% and Delta Air Lines added 4.2%. Among cruise stocks, Royal Caribbean Cruises gained 21% and Carnival rose 17%. All five stocks remain down more than 50% for the year.

Meanwhile, in London, EasyJet soared 20% after the carrier tapped a U.K. government-aid program for short-term credit. The company’s ability to access the funding suggests that it could withstand the economic downturn, provided that the spread of the coronavirus continues to slow, according to Michael Hewson, chief market analyst at brokerage CMC Markets.

“Markets are pricing in a return to normality for airlines sooner rather than later,” Mr. Hewson said. That optimism is also driving hotel stocks higher, he added.
The rise in risk appetite led some investors to sell the safest government bonds. The yield on the 10-year U.S. Treasury note rose to 0.749%, from 0.675% Monday. Yields rise as bond prices fall.

Oil prices also ticked higher, with the global benchmark Brent crude advancing 0.3% to $33.15 a barrel.


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In currency markets, the ICE Dollar Index slipped 0.7%. The greenback has been wavering amid renewed risk appetite, according to Jordan Rochester, a currency strategist at Nomura.

“It’s definitely a risk-on day,’’ leading some investors to sell the dollar, he said.





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Oil Rises 3% On Hopes For Output Cut

Oil prices gained on Tuesday as hopes rose that the world’s biggest producers of crude will agree to cut output as the coronavirus pandemic crushes demand, even as analysts warn a global recession may be deeper than expected.

Brent crude (LCOc1) was up by 93 cents, or 2.8%, at $33.98 a barrel by 0431 GMT after falling more than 3% on Monday. U.S. crude (CLc1) was up by 79 cents, or 3.03%, at $26.87 a barrel, having dropped nearly 8% in the previous session.



The world’s main oil producers including Saudi Arabia and Russia are likely to agree to cut output at a meeting on Thursday, although that would depend on the United States doing its share, sources told Reuters.

But the threat of a major recession hangs over the market due to the halt of much economic activity as a result of the coronavirus pandemic, with half the global population under some form of lockdown or social distancing measures.

“Oil producers have to cut deeply and quickly if they want to avert total saturation of oil markets,” Eurasia Group said.

Worldwide oil demand has dropped by as much as 30%, or about 30 million barrels per day, coinciding with moves by Saudi Arabia and Russia to flood markets with extra supply after an agreement on withholding output fell apart.

Oil prices slumped on Monday after Saudi Arabia and Russia delayed a meeting to agree on output cuts till Thursday.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, a grouping known as OPEC+, had been curtailing production in recent years amid a rapid expansion of U.S. output that made the country the world’s biggest crude producer.

There are also questions over whether the U.S. would join any coordinated action.

U.S. President Donald Trump said on Monday that OPEC had not asked him to push domestic oil producers to cut their production to buttress prices. He also said that U.S. output was declining in response to falling prices.

“I think it’s happening automatically but nobody’s asked me that question yet so we’ll see what happens,” the president told a press briefing on Monday afternoon.

Coordinated action by U.S. oil producers to reduce output would typically be a violation of antitrust laws.

A global recession that economists in a Reuters poll say is under way will likely be more serious than expected a few weeks ago due to the viral outbreak, the latest survey showed.

“We expect energy prices to hover around current levels until economic activity recovers,” Capital Economics said in a note.


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Economic Calendar – Top 5 Things to Watch This Week

The main focus will once again be on U.S. labor market, with Thursday’s initial jobless claims report, which has already shown an unprecedented jump of around 10 million over the past two weeks. Oil prices look set to crater again on Monday as the price war between Saudi Arabia and Russia intensifies. Meanwhile, Wednesday’s Federal Reserve meeting minutes may give some insight into the mindset of policymakers as they delivered emergency rate cuts. Here’s what you need to know to start your week.

1-Trump warns Americans to brace for big spike in virus fatalities
Trump has told Americans to brace for a big spike in coronavirus fatalities in the coming days, as the country faces what he called the toughest two weeks of the pandemic.

“There’s going to be a lot of death,” Trump said at the White House briefing on Saturday.

The United States has the world’s highest number of known cases of COVID-19, the flu-like respiratory disease caused by the coronavirus. More than 306,000 people have tested positive in the United States and over 8,300 have died, according to a Reuters tally.

White House medical experts have forecast that between 100,000 to 240,000 Americans could be killed in the pandemic, even if sweeping orders to stay home are followed.

“We are coming up to a time that is going to be very horrendous,” Trump said. “We probably have never seen anything like these kind of numbers. Maybe during the war, during a World War One or Two or something.”

2-Oil set to crater as OPEC+ meeting postponed
Oil price fluctuations have added an extra layer of complication to the coronavirus related market turbulence, crashing 70% from January highs before bouncing on Trump’s claim to have brokered a Saudi-Russia deal to cut output.

But prices look set to drop sharply on Monday after OPEC and Russia postponed a Monday meeting to discuss oil output cuts until April 9, as a war between Russia and Saudi Arabia over market share intensified.

Oil recovered from last week’s lows of $20 per barrel with Brent settling at $34.83 on Friday, still far below the $66 level at the end of 2019. Prices had their biggest one-day gain ever on Thursday when Trump said he expected Russia and Saudi Arabia to announce a major production cut.

On Saturday, Trump focused instead on tariffs as a response to the oil price crash.

If I have to do tariffs on oil coming from outside or if I have to do something to protect our … tens of thousands of energy workers and our great companies that produce all these jobs, I’ll do whatever I have to do,” the president said.



3-Jobless claims set to surge again
Thursday’s data on initial jobless claims will be the main release for markets this week. Jobless claims have surged to record levels in the past two weeks, as containment measures to try and slow the spread of coronavirus mean shutdowns are becoming widespread across the U.S. As a result, companies are increasingly shutting their doors and laying-off staff.

Economists are forecasting a reading around the five million mark for initial claims this week.

“With risks skewed towards the containment measures lasting into May, we would not be surprised to see unemployment hit 15% in coming months with our best guess being that the economy contracts 40% in 2Q,” analysts at ING wrote in a note.

4-Fed minutes
The Fed is to publish what will be closely watched meeting minutes on Wednesday, which investors expect to outline details on the decisions to deliver emergency rate cuts and inject waves of stimulus into the economy.

Calendars released by the U.S. central bank on Friday showed that Chairman Jerome Powell and Trump held two phone calls on Feb. 7 and again briefly on Feb. 26. What exactly they discussed was not immediately clear, but Powell released a statement on Feb. 28 acknowledging evolving risks from the virus and promising the central bank would act as appropriate to support the economy.

The Fed delivered an emergency rate cut on March 3.

5-Eurozone to debate coronabonds
Euro zone finance ministry officials are to hold discussions this week about how best to aid poorer states buckling under the coronavirus strain. It’s safe to say a solution that satisfies everyone won’t come by the April 9 deadline. The same divisions remain within the bloc — Germany and the Netherlands are fiercely opposed to proposals for joint ‘coronabonds’, favored by France, Italy and Spain.

Joint bonds would assure poorer countries — and investors — that prosperous bloc members stand behind them, keeping borrowing costs in check. But likelier options this time around include credit lines from the euro zone’s bailout fund, more lending from the European Investment Bank and using a joint long-term budget directly or for guarantees for leveraged borrowing.

Germany will probably dodge joint bonds this time. But another whatever-it-takes moment is inevitable.


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Coronavirus: Australian Scientists Find Drug That ‘Completely Stops’ COVID-19 From Replicating

Tests showed the drug reduced levels of the virus by 99.8 per cent within 48 hours.

A drug prescribed for scabies has been shown to stops the coronavirus in its tracks and may help fight the infection, according to a study.

Ivermectin is used on the NHS and in the US for parasitic infections – but researchers in Australia believe it could be useful against COVID-19. Tests showed the drug reduced levels of the virus by 99.8 per cent within 48 hours. It had been completely eliminated after three days.

It’s believed the drug works by paralysing the SARS-CoV-2 virus and ‘overwhelming its nervous system’, preventing it from replicating.

Scientists at the Royal Melbourne Hospital believe ivermectin may in turn reduce the severity of the life-threatening disease. They are now urging for ivermectin to be trialled on coronavirus patients, as experts continue the race against time to find a cure.

Ivermectin was discovered in the 1970s and has fast become an essential medicine for a vast number of parasitic infections, such as head lice and scabies.

It’s branded as Stromectol, an oral tablet for scabies, or Soolantra, a skin cream for rosacea. It’s on the World Health Organization‘s List of Essential Medicines, the safest and most effective medicines needed in a health system.

In recent years, researchers have shown ivermectin has anti-viral activity against a broad range of viruses.

Most of this research has only been ‘in vitro’ – cells in the laboratory – which has prompted calls for human trials. That’s based on the fact that SARS, a coronavirus closely related to the new one, has a weak link in its DNA which the team said could be a potential target for ivermectin.

Cells were infected with SARS-CoV-2, the scientific name designated to the novel coronavirus, for two hours. Then ivermectin was injected. After 24 hours, there was a 93 per cent reduction of virus DNA in the cells compared to cells which were not treated with ivermectin.

Results showed ‘the loss of essentially all viral material by 48 hours’, Dr Leon Caly and colleagues wrote in their paper.

They add: ‘These results demonstrate that ivermectin has antiviral action against the SARS-CoV-2 clinical isolate in vitro, with a single dose able to control viral replication within 24-48 h in our system.



‘Ultimately, development of an effective anti-viral for SARS-CoV-2, if given to patients early in infection, could help to limit the viral load, prevent severe disease progression and limit person-person transmission.

‘This brief report raises the possibility that ivermectin could be a useful antiviral to limit SARS-CoV-2.’

The team suggested that until a drug is proven to be beneficial against COVID-19 in a clinical setting – which has not happened yet – ‘all should be pursued as rapidly as possible’. They noted that ivermectin has already been proven to be safe for use – it is approved by the FDA and MHRA.

Dr Michael Head, a research fellow at University of Southampton with a speciality in scabies and other diseases, said ivermectin is one of the best treatments for scabies.

It works by paralysing the parasite and ‘overwhelming’ its nervous system.

How it works to fight off the coronavirus is not clear yet, but it likely inhibits the viruses replicating mechanism in some way. Dr Head said: ‘Ivermectin is a widely used medicine, often used to treat many infections such as scabies.

‘There is a huge amount of research ongoing looking at whether we can repurpose existing drugs as anti-virals to treat COVID-19 cases. This new interesting study show Ivermectin has shown some effectiveness against the novel coronavirus in the laboratory setting.


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‘However, there is a huge difference between laboratory studies, and safety and effectiveness in patients, and so we should be cautious about reading too much into these preliminary results.

‘It is likely most of the existing medicines being tested already will not end up being useful for treating patients against COVID-19.’

Remdesivir, chloroquine and favipiravir are just some of the drugs being investigated in a bid to find a cure to the killer coronavirus.





European Markets Mixed As Coronavirus Cases Top 1 Million

Global stock markets have experienced a shaky start to the second quarter this week as investors to assess the potential economic ramifications of widespread lockdowns and the persistent spread of the coronavirus.

European markets were searching for direction on Friday morning as another rocky week of trading draws to a close amid the deepening coronavirus crisis.

The pan-European Stoxx 600 hovered around 0.2% below the flatline in early deals, with insurance stocks sliding 2.3% to lead losses while media stocks added 1%.

The number of confirmed cases of the coronavirus worldwide surpassed 1 million on Thursday night, resulting in more than 53,000 deaths so far. Italy and Spain have reported over 115,000 and 112,000 cases, respectively, while Germany now has more than 84,000 cases, according to Johns Hopkins University.



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Global stock markets have experienced a shaky start to the second quarter this week as investors continue to assess the potential economic ramifications of widespread lockdowns and the persistent spread of the virus, along with the fiscal and monetary measures being deployed by governments and central banks to mitigate the crisis.

Asian markets were muted on Friday after an initial gain in momentum after oil prices experienced their biggest one-day surge on record, but crude futures retraced some of their gains by Asian afternoon trade.

The sharp moves in crude futures came after U.S. President Donald Trump told CNBC’s Joe Kernen that he expected Russian President Vladimir Putin and Saudi Crown Prince Mohammad Bin Salman to agree to an oil production cut of 10 million to 15 million barrels, potentially halting a bruising price war between the two oil powerhouses.

On the data front, individual and collective final euro zone Markit composite and services PMI (purchasing managers’ index) readings for March are due at 9 a.m. London time, before February’s retail sales numbers at 10 a.m.

U.K. Markit/CIPS composite and services PMIs are expected at 9:30 a.m.






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U.S. Stock Futures Rebound, Oil Surges

U.S. stock futures recovered some ground Thursday, while oil prices surged on hopes of an end to the Saudi Arabia-Russia price war.

Contracts tied to the S&P 500 rose 1.6%, suggesting that the index may recover some of its losses when trading gets under way in New York. U.S. equities endured their worst start to a new quarter on record Wednesday.

Brent-crude, the global benchmark for oil, jumped 10% to $27.22 a barrel after President Trump said he was confident Saudi Arabia and Russia would resolve their dispute in coming days. Market sentiment was also buoyed by a new report that China plans to buy crude for its strategic reserves, analysts said.

A combination of eroding demand, driven by the sharp slowdown in economic output as countries grapple with the coronavirus pandemic, and a flood of new supply recently pushed U.S. crude-oil prices close to their lowest level since 2002.

Traders are increasingly optimistic that major producers will intervene in the oil market to bolster prices, according to DNB analyst Helge Andre Martinsen. However, the pandemic’s impact on the economy means the oil market will be significantly oversupplied in the coming months regardless of whether producers cut back output, Mr. Martinsen cautioned.

The jump in oil prices lifted shares in U.S. energy producers before the opening bell in New York. Exxon Mobil and Chevron each rose more than 5%. Stocks in European energy majors also advanced, with Royal Dutch Shell up 8.8%.


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U.S. government bonds rallied in a sign that investors are seeking assets they perceive to be the safest. The yield on 10-year Treasury notes slipped to 0.591%, from 0.630% Wednesday. Yields drop when bond prices climb.

The Federal Reserve changed Wednesday rules around how banks account for their supersafe assets, easing capital constraints for lenders. The steps were also aimed at preventing trading hiccups in the market for U.S. government bonds, and easing credit flow.

Investors are once again flocking to the safety of Treasurys,” said Colin Low, senior macro analyst at FSMOne.com in Singapore. “The mini-rally seen last week was a typical relief rally that was seen in previous bear markets such as in 2008 and 2000. The economic situation in many markets is going to be uglier, as more data come in.”

The pandemic’s toll on the U.S. economy is likely to become clearer Thursday when the Labor Department releases weekly data on new unemployment claims. Around six million people may have filed for unemployment benefits in the week through March 28, according to economists at Goldman Sachs. That would be almost double the highest number on record, set the previous week.

Some investors also view what appears to be a slowdown in the rate of infection in Italy, the first Western country to suffer a major coronavirus emergency, as a sign that a similar lockdown approach may help elsewhere. The country has become a test case for whether the U.S. and the rest of Europe might suppress the pandemic fast enough to avoid a deep economic crisis while using strategies less draconian than China’s.

Italian authorities are cautioning it will take until after Easter to cut new infections enough to begin easing restrictions on travel and work to reopen parts of the economy. New daily infections have fallen from a peak of over 6,500 on March 21, with about 4,800 people testing positive Wednesday. Still, that represented a rise from 4,100 new cases Tuesday, according to the Johns Hopkins University.

“What we’re going to see from here on is market movements are going to be dictated by the virus,” said Seema Shah, chief strategist at Principal Global Investors.

The decrease in Italian deaths showed there was “a glimmer of light at the end of the tunnel” in the U.S. and other countries, she said. “We still need to see that full peak in infection rates in a number of countries” for global stock markets to recover meaningfully.

The Stoxx Europe 600 index was largely flat Thursday. Asian stock markets ended the day mixed. The benchmark in Japan lost 1.4%, while China’s Shanghai Composite rose 1.7%.



The pandemic has infected more than 935,000 people globally and killed more than 47,000. The death toll in the U.S. surpassed 5,100, as confirmed cases climbed to over 215,000. The World Health Organization has warned that the number of infected could top one million in a few days.

“Globally, as a whole, the Covid-19 situation is worsening,” said Mr. Low at FSMOne.com, referring to the illness caused by the novel coronavirus.

“Investors are getting more panicky. They are fully aware that corporate earnings and the global economy will be bad for the first and second quarters. But beyond that, there’s no visibility on how these numbers will look like in the third and fourth quarter because of the fluidity of the Covid situation,” he said.





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Stock Market: U.S. Futures And Global Stocks Fall, Investors Rush To Safe-Haven Assets

“In the U.S., we’re at the beginning of a downturn,” said Steven Englander



U.S. stock futures declined Wednesday, after leading benchmarks closed out their worst quarter since the global financial crisis.

Futures tied to the Dow Jones Industrial Average and S&P 500 ticked down 2.6% early Wednesday.

European stocks also declined. The pan-continental Stoxx Europe 600 index dropped 2.9% with Germany’s DAX benchmark down 3.2% and the FTSE 100 down 3.5%.

As investors rushed to safe-haven assets, the yield on the 10-year U.S. Treasury note fell about 0.02 percentage point to 0.661%. Bond yields fall as prices rise. The ICE Dollar Index, which tracks the dollar against a basket of currencies, rose 0.4%.

“In the U.S., we’re at the beginning of a downturn,” said Steven Englander, global head of G-10 foreign-exchange research and North America macro strategy at Standard Chartered Bank. “We’re likely to see more unemployment, and the early bottom could come in May, but that is very speculative. For that to happen, we need a lot of good luck and serious implementation of economic and health-care policy.”

Mr. Englander said stimulus packages were positive for the economy, and would help American employees get through the next two months but that there might be a need for “trillions more.” On Tuesday, President Trump called for a new infrastructure-focused spending bill worth $2 trillion.

The Federal Reserve said Tuesday that it would launch a temporary lending facility that for the first time would allow foreign central banks to convert their holdings of Treasury securities into dollars, its new bid to alleviate strains in global markets.

Mr. Englander said the program would improve international access to dollar-based funding.

“Investors will take it seriously,” he said.

The S&P 500 dropped 1.6% Tuesday, taking its year-to-date losses to 20%, the biggest quarterly decline since 2008. The Dow Jones Industrial Average fell 1.8%. It slid 23% over the quarter, its worst showing since 1987.


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In Asia, markets were mixed Wednesday. Japan’s Nikkei 225 lost 4.5% and Hong Kong’s Hang Seng was 2.2% lower. Meanwhile, Australia’s ASX 200 gained 3.6%.

In Hong Kong, shares in HSBC Holdings PLC tumbled more than 9% to their lowest since 2009, while stock in rival Standard Chartered PLC also fell. The two lenders, which also have U.K. listings, were among four banks that said Tuesday they would cancel unpaid 2019 dividends at the Bank of England’s request.






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French Manufacturing Plunges Into Deepest Slump In Seven Years

French manufacturing activity fell in March at the fastest pace in more than seven years as a nationwide lockdown to contain the coronavirus outbreak hits companies and their clients, a monthly survey showed on Wednesday.

Data compiler IHS Markit said its final Purchasing Managers’ Index (PMI) fell to 43.2 points from 49.8 in February, slightly higher than a preliminary reading of 42.9.

The plunge to its lowest point since January 2013 brought the index far away from the key 50-point line dividing expansions in activity from contractions.


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Meanwhile, manufacturers’ output and the flow of orders for new business fell to their lowest levels since the 2008-2009 global financial crisis that unleashed one of the deepest recessions in decades in many major economies.

As the coronavirus spread in France, the government imposed a lockdown on March 17, forcing large swathes of the euro zone’s second-biggest economy to shut down.

“The supply of goods is diminished, with supplier delivery times lengthening sharply and staff unable to work amid factory closures,” IHS Markit economist Eliot Kerr said.



“Meanwhile, restricted movement of people and social distancing has acted to stifle demand, delivering a double-barrelled blow to the economy,” he added.

The INSEE official statistics agency estimated last week that the economy was operating at two-thirds of its normal level, which was likely to knock 3 percentage points off growth for each month the country spends in lockdown.


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Global Stocks Fall as Oil Dips Below $20


Today’s Stock Market News { Monday – 30 March – 2020 }


In Monday-afternoon trading in Hong Kong, S&P 500 futures rose about 1%, reversing earlier declines and suggesting that U.S. shares could rise at the start of the week. The yield on the 10-year U.S. Treasury note, a security that is seen as a haven, fell to 0.678%, according to Tradeweb, from 0.744% Friday. Yields move in the opposite direction of prices.




European equities wavered between small gains and losses, as gains for shares in chemical manufacturers and telecommunication firms offset losses for shares in banks and energy producers. The broad Stoxx Europe 600 index was down 0.1%.

Japan’s Nikkei 225, which logged its best week in its history last week, pulled back more than 1.5% as the yen strengthened slightly to 107.75 to the dollar. SoftBank Group, a major index constituent, pared some of its recent gains to fall more than 6% after a satellite venture it had backed, OneWeb Global, filed for bankruptcy.

Australia’s benchmark S&P/ASX 200 soared 7%, with gains intensifying late in the session after the government unveiled a 130 billion Australian dollars ($80.1 billion) wage-subsidy program.

Monetary authorities in the region also took further steps to shore up markets and economies. China’s central bank cut an interbank interest rate, while its counterpart in New Zealand said it would start buying corporate bonds to help companies stay afloat. Singapore, which uses foreign-exchange rates rather than borrowing costs as its main policy tool, also eased policy.

South Korea’s Kospi Composite added 0.2% while Hong Kong’s Hang Seng Index and the Shanghai Composite in mainland China fell less than 1%.

Monday’s moves followed a Friday pullback in U.S. stocks, which came after three days of solid gains. “We’ve had the rally, and now we might have a bit more of the reality,” said Sean Taylor, chief investment officer for Asia-Pacific at asset manager DWS.

The White House on Sunday extended its social-distancing guidelines for an additional 30 days, through the end of April. President Trump said the peak of the death rate from the new coronavirus was expected to hit in two weeks, predicting the U.S. would be on its way to recovery by June 1. Coronavirus cases world-wide have topped 718,000, with more than 33,000 deaths.

Mr. Taylor at DWS said the U.S. move to extend social distancing reflected how the focus of the pandemic had shifted from China to the U.S. and Europe, with public-health measures bringing economic activity to a near standstill and reducing global demand.

Brent crude, the global oil benchmark, pulled back more than 3.5% to $26.97 a barrel. West Texas Intermediate, the main U.S. crude gauge, fell below $20 a barrel at one point, before recovering slightly to stand 3.3% lower at $20.81 a barrel. WTI had hit an 18-year settling low of $20.37 earlier this month.

Crude prices have plunged on worries about reduced demand and a price war among major oil producers.

U.S. stocks last week posted their biggest weekly gain since 1938 after a roller-coaster ride, with the Dow surging 13% and the S&P 500 climbing 10%. But both indexes sold off on Friday and remain down more than 20% in 2020. Lawmakers in the U.S. agreed to the largest economic-relief package in U.S. history in response to the coronavirus pandemic.





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Trump Decides Against Quarantine for New York

“A lockdown is what they did in Wuhan, China, and we’re not in China,” Mr. Cuomo said on CNN Saturday evening.

President Trump late Saturday said he would not seek a quarantine on New York, New Jersey and parts of Connecticut after raising the idea earlier in the day and said his administration would instead issue a “strong travel advisory” for the area, as the nation’s largest city quickly becomes an epicenter of the coronavirus pandemic.

Mr. Trump said he had directed the Centers for Disease Control and Prevention to issue the travel advisory and that more details would be released later in the evening. He said he had made the decision in consultation with the governors of New York, New Jersey and Connecticut.

Later Saturday, the CDC issued a travel advisory urging residents of New York, New Jersey and Connecticut to “refrain from non-essential domestic travel” for 14 days, effective immediately. The advisory doesn’t apply to those in critical infrastructure industries, including truckers and health professionals.



The president’s assertion earlier in the day that he was considering imposing a quarantine on those states for a few weeks drew swift and harsh blowback from governors, who questioned why they hadn’t been consulted first and suggested they didn’t believe the move would be legal.

New York Gov. Andrew Cuomo had called the quarantine idea a “declaration of war on states” that would crash financial markets and results in legal challenges.

“A lockdown is what they did in Wuhan, China, and we’re not in China,” Mr. Cuomo said on CNN Saturday evening.

The president had indicated he didn’t plan to physically prevent people from leaving those states, telling reporters earlier in the day that it wouldn’t be necessary to bring in the military or the National Guard. The president’s advisers have told him that most people would listen to an order from the president not to leave the states, and that it wouldn’t be necessary to “bring the hammer” by physically blocking their exit, a person familiar with the discussions said.

A quarantine restricting people’s movement across state lines would have represented one of the toughest measures the federal government has taken yet to slow the spread of the coronavirus. Mr. Trump already has blocked flights from China and much of Europe and asked Americans to adhere to social-distancing recommendations, but the stay-home measures that affect people most deeply have been ordered by governors.

New York City alone has more than 23,000 cases, nearly a quarter of all the cases in the country. Overall, New York state leads the country in infections, with 52,318 confirmed cases and 728 deaths as of Saturday, Mr. Cuomo said during an afternoon briefing.

Mr. Cuomo and the Democratic governors of New Jersey and Connecticut, Phil Murphy and Ned Lamont, already have ordered all nonessential businesses in the state to close and called for residents to stay home. Essential services like hospitals, grocery stores and pharmacies remain open under the order, and residents still can go outside for exercise and to obtain groceries.

They each said their moves already represent aggressive action against the virus’s spread. “Until further notified we are going to keep doing exactly what we are doing,” said Mr. Murphy, whose state has 11,124 coronavirus cases as of Saturday afternoon and 140 deaths.

“I look forward to speaking to the President directly about his comments and any further enforcement actions, because confusion leads to panic,” Mr. Lamont said in a statement.

Mr. Trump’s idea also took federal transportation officials by surprise. Federal transportation agencies, airline officials and pilot unions that would have been an important component of a quarantine weren’t informed about Mr. Trump’s idea before the president revealed it to reporters Saturday, according to people tracking the issue.

Concerns have mounted in other parts of the country about people leaving the New York City area and possibly spreading coronavirus. Earlier this week, administration officials urged anyone leaving New York to self-isolate for 14 days.


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Florida Gov. Ron DeSantis issued an executive order on Monday directing travelers from New York, New Jersey and Connecticut to self-isolate for that period, and said violations of the order would amount to a criminal offense. Rhode Island Gov. Gina Raimondo on Thursday issued a similar order. Mr. Trump said on Saturday he had spoken to Mr. DeSantis.

“They’re having problems down in Florida. A lot of New Yorkers going down,” Mr. Trump said.

Mr. Cuomo said other states’ measures to keep New Yorkers out were “reactionary.” He said he would sue Rhode Island if it doesn’t stop enforcing travel restrictions on New Yorkers.

Legal experts differed on whether the federal government could restrict, en masse, the movements of New York City area residents.

Lawrence Gostin, a professor of global health law at Georgetown University, said the quarantine broached by Mr. Trump would be unconstitutional and unprecedented.

“The power to regulate interstate commerce, including the spread of infectious diseases, resides exclusively in Congress,” he said. “In this case, the president hasn’t even consulted Congress or the governor of New York. He’d be acting unilaterally in ways he has no power to do.”

Mr. Gostin said governors, like Mr. Cuomo, would have multiple ways to push back if Mr. Trump ordered a quarantine of their states. They could sue, and they could direct the state police and public-health authorities not to enforce the order.

“The Supreme Court has said expressly that the federal government has no power to direct a governor to execute the president’s orders,” Mr. Gostin said. “The president would have to call in the United States military to guard the border.”

Wendy Parmet, a public-health law professor at Northeastern University in Boston, said the executive branch has broad powers to protect the public health. Restrictions on interstate travel and commerce should, constitutionally, be put in place by the federal government, not individual states, she said.

“We’re not supposed to have Florida saying drop dead to New York,” she said. “States can’t set up borders. We have a Constitution.”

She said whether any plan to quarantine the tri-state area passed constitutional muster would depend on the details of how it was done, and would have to be grounded in science about the public health.

“The courts are deferential to public health powers in times of emergency,” she said.

Mr. Trump’s comments overshadowed his visit to Norfolk, where he sent the hospital ship, USNS Comfort, on its way to New York to help take pressure off the city’s health-care system. Standing in front of the vessel, Mr. Trump said it was “stocked to the brim with equipment and medicines and everything you can think of.”

“This great ship behind me is a 70,000-ton message of hope and solidarity to the people of New York,” he said. He reminded Americans that anyone leaving New York must self-isolate for 14 days.

The U.S. added more than 15,000 cases of the Covid-19 disease, pushing the total past 104,000 on Saturday, with a surge of cases in New York amid increased testing. There are now more than 2,000 deaths from the virus in the U.S., according to Johns Hopkins University.



In a sign that other states were coming under pressure, California Gov. Gavin Newsom said coronavirus patients admitted to intensive-care units had doubled to 410 on Saturday. Hospitalizations were up 38.6% from a day earlier, with more than 1,000 Covid-19 patients now in California hospitals.

“That’s a significant, sizable increase,” he said. “If trends continue on those lines, then we will begin to manifest conditions that are very familiar to people on the East Coast.”

Authorities also reported the death of a New York Police Department detective and an Illinois infant who had Covid-19, the disease caused by coronavirus.

The virus’s growth in the U.S. outstripped that of Italy and China, the countries with the second- and third-most infections, where confirmed cases stayed around 86,000 and 81,000, respectively, according to data compiled by Johns Hopkins.

As a result, the number of confirmed infections globally has more than doubled over the past week to more than 600,000. The death toll from the pathogen rose to more than 28,000 on Saturday, with roughly one-third of the fatalities in Italy, data from Johns Hopkins showed.

Italy’s death toll from the virus on Friday rose by 919 to 9,134, the highest daily tally on record. Total infections there rose to 86,498, a 7% increase from the previous day.





 

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Coronavirus Cases Pass 650,000 as Global Economic Fallout Grows

“It is now clear that we have entered a recession as bad or worse than in 2009,” Kristalina Georgieva, managing director of the International Monetary Fund, said Friday

The highest number of U.S. cases continues to be in the state of New York, where almost 45,000 people have been infected and 519 have died from the virus as of Friday, state officials said.

The U.S. added more than 15,000 cases of the Covid-19 disease, pushing the total past 104,000 on Saturday, with a surge of cases in New York amid increased testing. The growth outstripped that of Italy and China, the countries with the second- and third-most infections, where confirmed cases stayed around 86,000 and 81,000, respectively, according to data compiled by Johns Hopkins.

As a result, the number of confirmed infections globally has more than doubled over the past week to more than 650,000. The death toll from the pathogen rose to more than 28,000 on Saturday, with roughly one-third of the fatalities in Italy, data from Johns Hopkins showed.

Italy’s death toll from the virus on Friday rose by 919 to 9,134, the highest daily tally on record. Total infections there rose to 86,498, a 7% increase from the previous day.

Overlapping travel bans and lockdowns have hammered businesses and led to millions of job losses, punctuated by a spike in U.S. unemployment claims to more than three million this week and a warning of a deep recession this year in trade bellwether Singapore.

“It is now clear that we have entered a recession as bad or worse than in 2009,” Kristalina Georgieva, managing director of the International Monetary Fund, said Friday. Rising bankruptcies and layoffs could undermine any recovery and do long-lasting damage to the world economy, she said.

With the pneumonia-causing virus spreading across the U.S. and Europe, after it was first detected in central China three months ago, governments around the world have ramped up efforts to limit people’s movement and began imposing wide-ranging closures on businesses, restaurants and schools domestically in recent weeks.

Increasingly strict travel bans set up by large countries including the U.S. and China have put a dent in global commerce, complicating efforts to reignite growth.

France and Belgium on Friday extended their national lockdowns by two weeks, until mid-April. French Prime Minister Édouard Philippe said experts advising the government recommended the lockdown remain for at least six weeks. Russia on Friday suspended all passenger flights to and from the country.

The IMF warned that low-income countries will be hit particularly hard given a combination of a health crisis, sudden reversal of capital flows and in some cases a plunge in commodity prices. In Russia, where oil exports account for roughly one-third of government revenue, the ruble has fallen to its lowest level in four years. The IMF estimated that at least $2.5 trillion is needed to contain economic contraction for emerging markets.

The Chinese government is also wrestling with the economic blow from the SARS-like virus, first from a prolonged halt in domestic business activities and now from weaker consumer sentiment and shrinking export demand as the coronavirus engulfs Europe and the U.S.

On Friday, China’s top decision-making body said the government plans to boost spending by increasing its fiscal deficit this year, as well as speed up issuance of Treasury bonds and so-called local government special-purpose bonds to support funding of infrastructure projects, as part of the stimulus measures to curtail economic impact from the pandemic.



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“The fiscal policy needs to be more proactive, and the prudent monetary policy needs to be more flexible,” said a statement from Friday’s meeting of the Politburo Standing Committee, chaired by President Xi Jinping. The government also called for a gradual reopening of shopping malls and markets to boost consumer spending.

China’s National Health Commission reported 54 new infections Friday, saying all were imported from abroad, bringing the total to 81,394.

Other countries continue to tighten rules on social distancing. Iran this week closed shopping centers and banned road travel between cities, pledging to fine and impound the cars of offenders. Iranian officials have warned the population to brace for a second wave of infections. Afghanistan on Friday expanded restrictions by announcing a three-week lockdown on its capital, Kabul. Lebanon, which extended its nationwide lockdown until April 12, on Friday imposed a nighttime curfew.

In Turkey, President Recep Tayyip Erdogan introduced further travel restrictions this weekend to combat the spread of the virus, which has infected 5,698 people and killed 92 in the country, according to a tally by national health authorities. Intercity bus and air traffic will be reduced to a minimum while all international flights will be suspended.

Hong Kong banned public gatherings of four or more people beginning midnight Sunday, with those violating the rules facing fines of more than $3,000 and six months in jail. Singapore said it would fine people who violate its social distancing rules up to about $7,000.

Australia said it would quarantine citizens returning from overseas in hotels for 14 days beginning midnight Saturday.







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Stimulus Check Calculator

Congress just passed a $2 trillion stimulus bill to address the growing economic crisis caused by the coronavirus pandemic.

Included are direct payments to many Americans. Individuals are eligible for up to $1,200 and couples would receive up to $2,400 — plus $500 per child.

But the payments would start phasing out for individuals with adjusted gross incomes of more than $75,000. The amount would then be reduced by $5 for every additional $100 of adjusted gross income, and those making more than $99,000 would not receive anything. The income thresholds are doubled for married couples.

Income would generally be based on one’s 2019 or 2018 tax returns.

The money will likely be deposited directly into individuals’ bank accounts — as long as they’ve already authorized the IRS to send their tax refund that way over the past two years. If not, the IRS would send out checks in the mail.

The White House has said they hope to begin distributing cash quickly, but it may take weeks before the bulk of payments go out.


See how much you’re eligible for here


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Economic Indicators: Consumer Sentiment in U.S. Slumps by Most Since October 2008

U.S. consumer sentiment plummeted in March by the most since October 2008 as mounting Covid-19 cases nationwide and business closures elevated concerns about the economy.

The University of Michigan’s final sentiment index for the month slumped 11.9 points to a three-year low of 89.1, data Friday showed. The median forecast in a Bloomberg survey of economists called for a decline to 90 after a preliminary March reading of 95.9.

Ratings for current conditions also decreased by the most since 2008, and a measure of the economic outlook dropped to the lowest level in more than three years. Stocks fell and Treasuries advanced as investors assessed the pandemic’s impact on the economy.





“The outlook for the national economy for the year ahead changed dramatically in March, with the majority now expecting bad times financially in the entire country,” Richard Curtin, director of the Michigan sentiment survey, said in a statement. “Perhaps the most important takeaway is that the largest proportion of consumers in nearly 10 years anticipated that the national unemployment rate will increase in the year ahead.”

The report provides one of the more-sobering pictures yet of how the widespread economic halt, amid efforts to help contain the virus, is impacting consumers’ attitudes. The March figures represent a drastic departure from just a month earlier, when a strong job market and cheap fuel contributed to the second-highest sentiment reading since 2004.

The university’s final survey for the month included responses through March 24, a stretch that includes significant upheaval and uncertainty in day-to-day living and the labor market, as well as in financial markets. A report yesterday showed initial claims for unemployment benefits soared to a record 3.28 million last week.

“Stabilizing confidence at its month’s end level will be difficult given surging unemployment and falling household incomes,” Curtin said. “Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism.”

April consumer sentiment data will reflect the surge in dismissals and growing Covid-19 cases, as well as progress on Capitol Hill toward a $2 trillion economic-relief package that includes direct payments to many Americans.



Most notably, the number of confirmed cases nationwide continues to rise. There are currently more than 85,000 with the disease in the U.S., the most in the world, compared with 62 people at the end of February.

The Michigan data showed an index of buying conditions for durable goods dropped in March to the lowest level since 2014.

Year-ahead financial prospects declined across all age and income subgroups, though modestly as respondents anticipated the negative effects from the pandemic would be short-lived.

The impact of the virus on consumer sentiment are likely to become more evident as monthly reports capture the tectonic shift in economic and market conditions seen over the last month. The Conference Board will publish its March confidence reading on Tuesday. Meanwhile, Bloomberg’s weekly index fell to a four-month low.





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Coronavirus Shows Cash Is King, Even for Biggest U.S. Companies

The fast-spreading coronavirus has prompted even the biggest U.S. companies to cut their spending and bolster their balance sheets, proving once again how cash is king, especially in times of crisis.

After a decadelong U.S. economic expansion, not every company has entered this crisis with the same cash cushion. Apple Inc. ended the year with $247 billion in cash, securities and account receivables, enough to run its operations for more than a year even if it didn’t cut costs or sell a single iPhone. Discount retailer Dollar General Corp. had $240 million, enough for about four days, in the unlikely event it had to shut its doors and didn’t cut any costs.

Dollar General said its business model generates significant cash flow and has performed well in a variety of economic cycles, and the company can tap lines of credit and good access to the capital markets. Apple declined to comment.


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Technology companies generally operate with more cash on hand than retailers, which often have assets in unsold inventory. The median amount of cash and other readily available assets on an S&P 500 tech company’s books at year-end was enough to let it operate about 270 days in an extreme scenario without revenue or cost cutting, while the median was closer to 60 days for retailers, according to a Wall Street Journal analysis.

As companies prepare to close their books on a tumultuous first quarter, these measures can reveal how well-prepared they are for the sudden financial stress. Economists expect the crisis to cost the U.S. economy as much as $1.5 trillion in lost output over five years, including a decline in gross domestic product of 4% to 10% in the second quarter, a recent Journal survey of economists found.

“The investor mindset has shifted quickly to the balance sheet,” said Ron Graziano, an accounting and tax analyst at Credit Suisse. Sometimes factors that people don’t follow during a booming market suddenly become important. “The ones going into it with the bigger cushion are better positioned to survive.”

Delta Air Lines Inc. and Ford Motor Co. have stopped paying dividends. Boeing Co. has tapped out its credit lines, while General Electric Co. is cutting jobs. AT&T Inc.,  Intel Corp. INTC  and Chevron Corp. have shelved share buybacks.

In many cases, the crunch on corporate finances comes after years of cheap debt and easy credit that allowed companies to expand while building a $10 trillion mountain of debt. AT&T, following its 2018 takeover of Time Warner, had more than $150 billion in net debt at the end of 2019, though it has pledged to pay down its borrowings.

At the same time, many companies used spare cash to repurchase their own shares. In 2019, companies in the S&P 500 spent an estimated $729 billion on buybacks, second only to the record $806 billion spent in 2018, according to S&P Dow Jones Indices.

President Trump and Democratic lawmakers placed restrictions on share buybacks as part of the $2 trillion coronavirus stimulus package expected to pass Wednesday to help industries wounded by the pandemic.

Some of the companies that entered this crisis without big cash reserves sent much of the cash they produced from operations to shareholders, as dividends.

“Companies went into this situation with relatively limited cash balances,” said Torsten Slok, chief economist at Deutsche Bank Securities. “It is rather unfortunate they had lower cash balances and thereby became more vulnerable to this shock we have at the moment.”



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Economic Indicators: U.K. House Sales Set To Plunge 70% On Coronavirus Lockdown Impact

U.K. house sales are set to plunge by 70% in the next three months as the coronavirus outbreak batters the economy.

The slump in the second quarter, which is usually among the most active sales periods, will be followed by a further decline in the three months through September, according to a report on Thursday from real estate portal Zoopla. The hit to prices should feed through more slowly and will depend on the extent of the economic slowdown.

Covid-19 presents a major new challenge,” Richard Donnell, director of research and insight at Zoopla, said in an emailed statement. “The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures.”

The partial lockdown of the country ordered by Prime Minister Boris Johnson has restricted people’s movements and closed all but essential businesses. That has made it nearly impossible for sellers to market homes, with potential buyers unable to view properties. And the government has warned that stricter rules could be imposed if necessary.

While the logistics of the lockdown impede deals, the economic fallout from the pandemic will dictate the impact on house prices, according to Zoopla. “The greater the economic shock and rise in unemployment, the greater the potential impact on house prices over the spring and into the summer months,” according to the report.

The U.K. economy will contract by at least 10% in the first half of the year, according to Bloomberg Economics’ estimates. Senior U.K. economist Dan Hanson said support provided by the Bank of England and the Treasury should prompt a turnaround in the second half of the year if the outbreak is contained by the summer.

The virus is already weighing on deals, with the number of homes placed under offer in the seven days through March 22 down 15% from the previous week, Zoopla data show.

Prior to the outbreak, the U.K. housing market was off to its best start in four years, with price growth of 1.6% in February, up from 1.2% a year earlier, according to Zoopla’s U.K. cities index.





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3 Food Delivery Stocks Set To Gain As COVID-19 Lockdowns Boost Demand

As the coronavirus continues to spread rapidly around the globe, infections in the U.S. are on the rise with at least 55,231 confirmed cases and 801 deaths reported.

To contain the pandemic in the U.S., states are taking lockdown measures to reduce the number of social interactions. The majority of states have prohibited dining at restaurants, permitting only delivery and pick-up options.



While Wall Street is on track to suffer its worst month since the Great Depression, some food delivery stocks are thriving on expectations that even more Americans will order in as they are confined to their homes in the weeks ahead. These three stocks are well-positioned to benefit:

1. Domino’s Pizza
Domino’s Pizza (NYSE:DPZ) is known for its delivery service, which accounts for about 55% of total orders. As an increasing number of people are opting for take-out, the Ann Arbor, Michigan-based pizza chain has been displaying robust relative strength amid the ongoing coronavirus market correction. Shares of the corporation, which are up about 22% over the past month-and-a-half, settled at $343.56 last night, giving it a market cap of roughly $13.4 billion.

The multinational pizza chain with 17,000 stores in more than 90 countries around the world officially began implementing its ‘Contact Free Delivery’ service due to the COVID-19 outbreak this week in the U.S. as well as other countries impacted by the virus, like India, the United Kingdom, Ireland, and Australia.

The company announced last week that it expects to hire about 10,000 workers in the U.S. alone to meet increased orders at a time when the coronavirus pandemic has resulted in restaurants across the country laying off thousands of workers.

“Our corporate and franchise stores want to make sure they’re not only feeding people, but also providing opportunity to those looking for work at this time, especially those in the heavily-impacted restaurant industry,” CEO Ritch Allison said in a statement on March 19.

2. Blue Apron
Blue Apron (NYSE:APRN) is a New York-based online meal-kit company that delivers pre-measured ingredients, with which customers cook recipes of their choice. By making home cooking easy and accessible, Blue Apron has gained as the coronavirus outbreak in the U.S. led more Americans to seek alternatives to shuttered restaurants and emptied grocery store shelves.

Even after Tuesday’s 15% drop, this month the stock has surged an astonishing 260%, bucking the broader market rout brought on by virus fears. Shares ended at $10.36 last night, giving the food-delivery service a market cap of $137.45 million.

Blue Apron said last week it has seen a “sharp increase” in demand for its meal kits and it is taking steps to meet the greater number of orders. “We are increasing our capacity for future orders and expect to fulfill this increased demand by the next available weekly cycle, starting on March 30,” Linda Findley Kozlowski, Blue Apron’s chief executive, said on March 19.

However, any boost in business for Blue Apron will likely taper off after the immediate threat of the COVID-19 outbreak passes and consumers return to eating out. Prior to its recent surge, shares of Blue Apron had fallen about 98% from its 2018 IPO price, plunging to $2 in late February, due to growing competition and disappointing revenue.

3. Chewy
Chewy (NYSE:CHWY) is the leading online seller of branded and private-label pet food and grooming supplies in the U.S. The Florida-based company allows customers to browse a wide variety of foods for different animals through its website and mobile applications, then receive the package directly to their door.

Like the two other companies mentioned above, Chewy has also seen its shares rise despite the broader market selloff. The online pet products retailer has benefitted as its in-home delivery model mitigates the public health concern of consumers shopping for their pets at brick-and-mortar retailers.

Shares of the online pet products seller, which are up more than 27% over the past two weeks, closed at $33.65 yesterday, giving it a market cap of $12.8 billion. The stock touched a record high of $34.99 on March 19.

Chewy next reports earnings on Thursday, April 2, after markets close. Consensus calls for a loss of 15 cents per share for the fourth quarter, while revenue is forecast to total $1.35 billion.



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Global Stock Markets Mixed After Lawmakers Agree On Coronavirus Rescue Deal

Stocks turned mixed Wednesday after building on a rally from the previous session in anticipation of a coronavirus rescue deal by Congress. The White House and Senate reached an agreement overnight.

While the Dow was up 450 points and the S&P 500 rose 0.6%, the Nasdaq slipped into the red. The Dow soared more than 2,100 points Tuesday, or over 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008.

White House and Senate leaders agreed to a massive $2 trillion coronavirus stimulus bill in the middle of the night.

“At last we have a deal,” Republican Senate Majority Leader Mitch McConnell said around 1:37 a.m. ET from the floor of the Senate. “In effect, this is a war-time level of investment into our nation.”

Former Federal Reserve Chairman Ben Bernanke also said Wednesday the U.S. economy will experience a quick rebound after a “very sharp” recession. “If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound,” Bernanke told CNBC’s “Squawk Box.” Bernanke added the current situation is “much closer to a major snowstorm” than the Great Depression.

He also acknowledged current Fed Chairman Jerome Powell moved quickly to stem the economic blow from the outbreak. “I think the Fed has been extremely proactive, and Jay Powell and his team have been working really hard and gotten ahead of this and shown they can set up a whole bunch of diverse programs that will help us keep the economy functioning during this shutdown period.”

Still, some investors think the number of global coronavirus cases needs to improve before the market can form a bottom.

Spain experienced a record spike in coronavirus deaths, with 504 reported for Tuesday. Globally, more than 400,000 cases have been confirmed, according to data from Johns Hopkins University. In the U.S., more than 55,000 cases have been confirmed along with over 69,000 in Italy.

Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said there are four “components” to the market stabilizing from here:

″(i) A sign that the policy intervention is sufficient to prevent severe second- and third-round economic shocks; (ii) A sign that the infection rate is reaching a peak; (iii) A sign that the economic downturn may be slowing; and (iv) Cheap valuations,” Oppenheimer wrote in a note to clients. “In reality, we believe it will be a combination of these, and in some cases there are already signs these are in place.”



Some investors believed the stock market was overdue for a big bounce, having priced in a worst-case scenario regarding the economic damage being done by coronavirus-related shutdowns. They believe a bounce could occur here even as coronavirus cases continue to surge because the market was so oversold.









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Financial Markets: European Shares Jump Again On Stimulus Bump

European shares rose on Wednesday following a strong rally in the previous session, as investors bet on unprecedented stimulus measures to ease the economic pain on businesses and households from the coronavirus pandemic.

The pan-European STOXX 600 index (STOXX) was up 2.1% at 0804 GMT, with energy (SXEP), industrials (SXNP), financials (SXFP) and miners (SXPP) leading gains for a second straight day.



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The benchmark index has now recovered its losses from mid March on the back of extraordinary fiscal and monetary stimulus from Europe and the United States. On Wednesday, U.S. officials agreed on a whopping $2 trillion stimulus package.

Still, the European bourse is down more than 25% from its record high last month in the biggest rout since the financial crisis, with another global recession looming in the face of a collapse in business activity in March.

German conglomerate Thyssenkrupp (DE:TKAG) rose 12.6% after saying it would cut 3,000 jobs at its steel unit by 2026, with no forced layoffs until March 31, 2026, as part of a wage deal struck with powerful labor union IG Metall.









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U.S. Futures And Global Equities Rise After Fed Move

U.S. stock-index futures and global equities rose after the Federal Reserve stepped up its assistance to the American economy, saying it would back lending to businesses and buy essentially unlimited amounts of government debt.

S&P 500 futures gained more than 3% in early afternoon trading on Tuesday in Hong Kong, suggesting U.S. shares could rise later in the day.



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Japan’s Nikkei 225 closed 7.1% higher, while South Korea’s Kospi rose more than 8%. A second day of sharp gains for SoftBank Group Corp. on a $41 billion asset-sale plan helped buoy the Nikkei. Benchmarks in Hong Kong, Australia, Shanghai, India and New Zealand also advanced.

On Monday, the Dow Jones Industrial Average fell about 3% after U.S. lawmakers failed for a second day to pass a rescue package to ease the blow from the coronavirus pandemic. U.S. stocks, however, pared earlier losses and investors took some solace from the Fed’s measures.

Sherwood Zhang, a portfolio manager at Matthews Asia, welcomed the Fed action. “Hopefully, the Fed’s latest move should be able to help tighten credit spreads globally, easing pressure on the cost of borrowing for corporations,” he said, adding that U.S. political gridlock mattered less internationally.

Mr. Zhang said he had used the recent market selloff to increase his holdings of high-quality stocks, including some consumer companies with long-term growth potential whose shares have been battered recently.

David Gaud, Asia chief investment officer and head of discretionary portfolio management at Pictet Wealth Management, said moves by the Fed and other central banks to keep interest rates low and ensure money was available for corporations were essential to prevent a complete economic meltdown.

“It’s moving in the right direction but it’s not sufficient,” to support world economies without decisive government action to address the economic fallout as well, he said. He said the longer the pandemic lasts, the greater its economic impact would be, in which case current fiscal and monetary policy responses might prove insufficient.

The global death toll from the novel coronavirus surpassed 16,000, with more than 367,000 confirmed cases. Cases in the U.S. alone grew 10-fold to cross 41,000 from a week earlier, as more state governors ordered residents to stay home. Meanwhile, the U.K. joined other European countries in lockdown under a raft of restrictions from the government.





The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, eased 0.6% Tuesday to 96.42. On Monday, the index hit its highest closing level since 2002. The gauge was created in 2012 but back-calculated to 2001. Regional currencies including the Australian dollar, Korean won and Chinese yuan strengthened against the dollar.

The 10-year U.S. Treasury note, which is seen as a haven, declined in price. The yield on the note, which moves in the opposite direction of its price, rose about 0.045 percentage point to 0.812%, according to Tradeweb.

Brent crude, the global oil benchmark, rose 4.1% to $30.49 a barrel. Crude prices have plunged on worries about reduced demand and a price war between major oil producers.


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Financial Markets – Top 5 Things to Watch This Week

This week market watchers will be looking at economic data releases for early indications of the scale of the impact from the coronavirus pandemic, but the main focus will continue to be on the response from governments and central banks who are ramping up stimulus measures amid market fears over whether steps announced so far will be adequate. Here’s what you need to know to start your week.

Data to show early economic hit from virus
Few doubt that the global economy will tip into recession as countries around the globe go into lockdown amid ongoing virus containment efforts. It goes without saying that large drops are likely in PMI data coming out this week in the U.S., Eurozone and the U.K.

The PMI surveys are typically conducted in the second half of a month and the data in the “flash” survey is usually collected in the week or so before the data is released, so economists reckon next week’s PMIs will provide the most comprehensive overview so far of the coronavirus impact.

Meanwhile, Thursday’s figures on initial jobless claims will be the first to show the full extent of the impact on the U.S. labor market. Economists at Goldman Sachs have estimated claims are set to jump to a record 2.25 million, according to an analysis of preliminary reports across 30 states.

U.S. government response awaited
Republicans and Democrats in the U.S. Senate on Saturday continued with efforts to reach a deal on a $1 trillion-plus bill aimed at mitigating the coronavirus pandemic’s economic fallout for workers and businesses.

White House economic adviser Larry Kudlow said he expects the final legislative package to be worth $1.3 trillion to $1.4 trillion.

Taken together with steps already taken by the U.S. Federal Reserve and the administration, the prospective bill would have a $2 trillion net impact on a U.S. economy, according to White House officials.

Liquidity squeeze to ease?
A liquidity squeeze prompted the Federal Reserve on Friday to enhance the dollar liquidity swap line arrangements it has with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank.

To see if that does the trick, watch for dollar exchange rates to stabilize.



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Demand for the world’s reserve currency had jumped amid a rush for cash in anticipation of a prolonged pandemic, with there being a substantial liquidity mismatch between global demand for U.S. dollars and those on offer.

U.S stock valuation picture may become clearer
As the U.S. stock market has tumbled, valuations have also come down sharply.

The S&P 500’s price-to-earnings ratio, based on earnings estimates for the next year, has dropped from over 19 times in late February to 14.2 times as of last Wednesday, according to Refinitiv data, taking the valuation below its historical average.

But the picture is complicated by the fact that earnings estimates may have not come down enough to account for the coronavirus fallout.

The picture may become clearer in the coming weeks, as the first quarter comes to an end and companies start preparing their results. Last week, FedEx (NYSE:FDX) and Marriott (NASDAQ:MAR) withdrew their 2020 financial forecasts because of the outbreak.

Nike (NYSE:NKE), Micron Technology (NASDAQ:MU), and KB Home (NYSE:KBH) are among the U.S. companies due to report results this week.

Emerging markets
Emerging market assets have been hammered, with currencies plunging to fresh record lows, bonds plunging and stocks down nearly 10% last week. Several factors have contributed – the strong dollar, a darkening economic outlook, tumbling oil prices as well as rising borrowing costs.

Investors piling into the greenback have seen enduring stresses in dollar funding markets, with hurried swap lines between central banks earlier in the week doing little to alleviate the credit strains at the heart of the problem.

Central banks in the United States, the euro zone, Canada, Britain, Japan and Switzerland stepped in again on Friday, agreeing to increase the frequency of their one-week U.S. dollar credit facility.

In emerging markets, policymakers that lack the firepower to support currencies or face challenges to cut rates, will be keeping their fingers crossed that steps taken by major central banks will be enough to end the crisis.










Airbnb Racks Up Hundreds Of Millions In Losses Due To Coronavirus

Airbnb Inc. wrestles with escalating losses due to the devastating impact of the coronavirus pandemic on its global business. The pandemic has thrown into disarray Airbnb’s plans to go public this year, and the company’s board and investors are divided over the best path forward, according to people familiar with the matter.

The San Francisco-based startup, which lets people list their properties for rent on its marketplace, has racked up hundreds of millions of dollars in losses this year, one of the people said. A spokesman for Airbnb said the company has “$4 billion in liquidity” and is “focused with our board on ways we can help our community weather this crisis.”

It is unlikely that the company will be able to attract investors at its 2017 valuation of $31 billion, when it last raised money, the people familiar with the matter said. The management is mulling how low it is willing to go to seek an injection of capital.

The Wall Street Journal reported last month that Airbnb internally was already valuing the company at less than $31 billion.



Airbnb, one of the nation’s biggest private companies, had planned to make its widely anticipated debut on the public markets this year via a direct listing, which wouldn’t involve raising any additional money.

The company is now considering instead raising cash using an initial public offering, and has held several meetings with its board this month to discuss its approach, the people familiar said. Morgan Stanley and Goldman Sachs Inc. have been appointed as dual-lead underwriters. But an IPO could go ahead only when the virus crisis has eased, stock markets stabilize, and the company’s finances recover to a stable footing, the people familiar said.

An Airbnb spokesman said it “should come as no surprise that in these extraordinary times, like virtually every company in the world, we are regularly consulting with our board to discuss our work.”

Airbnb—caught in the crosshairs of the all-out crisis the virus has created in the global travel industry—now faces evaporating revenues, as well as a backlash from the hosts who are the backbone of its business.

All its major markets are getting hammered. Bookings last week were down year-on-year around 95% in Asia, 75% in Europe—the company’s biggest market—and 50% in the U.S., according to one of the people close to the business. A report last week by Airbnb-analytics firm AirDNA also showed bookings tanking in big cities world-wide. This week’s numbers are much worse, the person said.

A spokesman for the company said the figures weren’t accurate but declined to provide other numbers.

Airbnb’s board had already raised concerns about the company sliding into the red, even before the pandemic upended its business, the Journal previously reported. Executives were grilled at a board meeting late last year on why overheads such as its head office and employee expenses had been allowed to balloon, outpacing even the then-rapid growth in revenue.


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Some board members are unhappy that Airbnb didn’t go public last year, when a soaring stock market put premium prices on even unprofitable startups, the people close to the company said. Employees are concerned the listing could now be delayed beyond the end of the year, meaning many valuable stock options will expire, becoming worthless.

One person close to Airbnb said management and the board are working in sync but that outside investors are agitated about the company’s troubles and its response to them.

Brian Chesky, Airbnb’s chief executive, is under intense pressure from employees to go public, after more than 10 years as a private company. He recently sought to reassure staff that a delay won’t happen. In a staff meeting held earlier this month and on a separate phone call with employees last week, he said the company plans to stay the course of going public this year, the people close to the business said.

Some investors are skeptical this will be possible, or question what price the stock might achieve.

The price at which Airbnb shares are trading has fallen sharply, according to people who specialize in the market for private company shares.

Before the pandemic hit, shares were trading privately at more than $140, valuing the company around $45 billion to $47 billion, according to Jared Carmel, managing partner at Manhattan Venture Partners, a secondary-market specialist. Now, he said, “we’re seeing shares tick back to close to $105.” That’s what Airbnb’s shares priced at in its last funding round in 2017, which valued the company at $31 billion, according to Dow Jones VentureSource data.