Archives of “January 23, 2020” day

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European major bourses are closing lower on the day

  
Analysis, Global Indices
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German DAX -1.0%. UK FTSE, -0.9%

The major European bourses are closing lower on the day.  Global concerns about the impact of coronavirus have sapped the energy from the stock market.
The provisional closes are showing:
  • German DAX, -1.0%
  • France’s CAC, -0.7%
  • UK’s FTSE 100, -0.9%
  • Spain’s Ibex, -0.6%
  • Italy’s FTSE MIB is trading near unchanged
In the European benchmark 10 year debt sector, yields are trading lower on the day. The Italian yields are down the most at -9.3 basis points. The others countries yields are down around 5 basis points each. Below are the basis point changes as well as the high and low yields trading today:
German DAX -1.0%. UK FTSE, -0.9%_

Watch: ECB president Christine Lagarde’s press conference at 1330 GMT

  
  Analysis
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All eyes on Lagarde now

The ECB statement was a non-event as expected, with the language on inflation and policy kept similar to the December meeting.

The ECB did officially announce its first strategic review in nearly two decades though and has taken some of the heat away from Lagarde ahead of her press conference; they say that they will provide further details on the scope and timetable later today at 1430 GMT.
As such, the focus of Lagarde’s press conference will be more skewed towards her tone and view on recent changes to the economic outlook i.e. improving data and the US-China trade deal – unless of course she decides to chime in on strategic review questions.
You can watch her live later here:

ECB leaves key rates unchanged in January meeting

  
  Analysis
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The ECB announces its latest monetary policy decision – 23 January 2020

  • Prior decision
  • Deposit rate facility -0.50%
  • Main refinancing rate 0.00%
  • Marginal lending facility 0.25%
  • Rates to remain at present or lower levels until inflation outlook robustly converges to target, reflected in underlying inflation
  • Announces first strategic review of policy since 2003
  • Further details on scope, timetable of review will be due later at 1430 GMT
  • Bond buying to continue until shortly before rates are raised
Pretty much a non-event as the details of the statement is very much a repeat of December – or so it seems, the ECB website link is down – besides the announcement of the strategic review, which was very much expected.
The euro is barely moved on the release as all eyes will turn towards Lagarde’s press conference, which is due at 1330 GMT later.
Update: Here’s the full statement.

“At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

The Governing Council will continue to make net purchases under its asset purchase programme (APP) at a monthly pace of €20 billion. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The Governing Council also decided to launch a review of the ECB’s monetary policy strategy. Further details about the scope and timetable of the review will be published in a press release today at 15:30 CET.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.”

Beijing cancels large-scale Chinese New Year celebrations due to new coronavirus outbreak

  
  Analysis
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China continues to take steps to contain the virus from spreading

Beijing just announced that they will be cancelling all major events, including the Chinese New Year celebrations because of the new coronavirus outbreak.

It is a wise move in an effort to keep the situation from potentially getting worse but it will dampen the mood ahead of the holiday period for Chinese citizens.

IMF’s Georgieva: Uncertain situation is the new normal

  
  Analysis
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IMF chief, Kristalina Georgieva, speaks in Davos

Kristalina Georgieva
  • Uncertainty is the major downside risk for global economy
  • Wants to see governments stepping up action
  • The world is more shock-prone as it is interconnected currently
  • We are in a better place at the start of 2020 than in 2019
  • Sees signs of trade, industrial slowdown bottoming out
  • Consensus is that global rates will be low for longer
  • Fed, PBOC have policy space
  • Other countries need to look at fiscal tools more closely
Low growth, low rates. That is the new landscape that the world will have to deal with. And with central banks still injecting so much stimulus and being so cautious, we shouldn’t expect to see a crisis like the one in 2008-09 materialise.
However, any chance of major economies and the world returning back to what is perceived to be “normal” is probably not going to happen either.

China coronavirus update – death toll now 17, Wuhan quarantine

  
  Analysis

China media (Caixin) report:

  • death toll has reached 17
  • Wuhan has imposed a quarantine, shutting down transit, airports, and rail stations.
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Wuhan has 11 million residents
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Meanwhile the World Health Organization (WHO) met on Wednesday and have extended their meeting another day, into Thursday:
WHO head Tedros Adhanom Ghebreyesus:
  • “The decision about whether or not to declare a public health emergency of international concern is one I take extremely seriously, and one I am only prepared to make with appropriate consideration of all the evidence
  • There was an excellent discussion during the meeting today, but it was also clear that to proceed, we need more information
  • For that reason, I have decided to ask the Emergency Committee to meet again tomorrow to continue the discussion” 
That is, WHO have not declared emergency yet.

World Health Organization: Delays decision on whether to declare coronavirus an int’l emergency

  
  Analysis
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They will meet tomorrow.

The World Health Organization director General Tedros says:
  • decision on whether to declare coronavirus outbreak and international emergency until Thursday
  • The organization will meet tomorrow
  • Coronavirus is an evolving and complex situation.
  • Appreciates cooperation from Chinese Pres. Xi and prime minister Li
  • Our team is on the ground in China as we speak to investigate the outbreak and get more information

US stocks close mixed in a up and back down session

  
Analysis, US Market
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No new records today..

The US stocks close mixed in a up and down session. The NASDAQ closed higher. The S&P closed near unchanged and the Dow fell.
The final numbers are showing:
  • S&P index closed up 1.02 points or 0.03% at 3321.81. The high reached 3337.77. The low extended to 3320.04
  • Nasdaq index closed up 12.963 points or 0.14% at 9383.77. The high reached 9439.29. The low extended to 9375.129
  • The Dow industrial average fell -9.22 points or -0.03% at 29186.80. The high reached 29320.20. The low extended to 29172.26

Although there were intraday new highs for both the S&P and Nasdaq indices, the gains could not be maintained.

Not a lot of key earnings today, but tomorrow American Airlines, Southwest, Intuitive Surgical and Intel will all report earnings.
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