Archives of “February 28, 2020” day

rss

It was an awful week for European stocks. Here’s a look at the damage

  
Analysis, Global Indices

Closing changes for the main European bourses:

Closing changes for the main European bourses:
  • UK FTSE 100 -3.2%
  • German DAX -3.9%
  • French CAC -3.4%
  • Italy MIB -3.6%
  • Spain IBEX -2.9%
On the week:
  • UK FTSE 100 -11.1%
  • German DAX -12.4%
  • French CAC -11.9%
  • Italy MIB -11.3%
  • Spain IBEX -11.8%
  • Stoxx 600 -12.2%
It was the worst week for most indexes since 2011 or since 2008. It’s interesting to note that despite being the centre of the storm in Europe, Italy’s market outperformed. In FX, the temptation is going to be to sell the currency of wherever the next outbreak is, but the market is increasingly looking at it as a global event, rather than a localized one.

OPEC reportedly discussing additional output cut of up to 1 mil bpd now

  
  Analysis
#  #  #  #  #  #

Reuters reports, citing OPEC sources on the matter

OPEC

This is similar to the story reported by the FT earlier today here. It is said that several OPEC members, including Saudi Arabia, are leaning towards a deeper oil output cut because of the coronavirus outbreak.

Yeah, I’m not sure if Russia is going to get on board with that. In any case, Saudi Arabia is likely going to have to do the bulk of the heavy lifting here to push this through.
Even then, I’m not sure if it would be enough to turn sentiment around in the oil market as the virus outbreak continues to be more widespread across the globe.

The market now expects the Fed to cut rates next month

  
  Analysis

Three rate cuts are priced in by the September meeting now

WIRP

The moves in the rates market over the past two weeks have been something else. On 14 February, odds of a 25 bps rate cut by the Fed for the March meeting were only at 10%. Now, the market has fully priced that in and then some.
Meanwhile, over three rate cuts are fully priced in for the remaining ten months of the year with the next cut seen in June and the third in September.
I think the big question now is, will the Fed be bullied by the market into yet another rate cut this time around? So far, they haven’t dropped any hints about a move next month but there’s still two-and-a-half weeks to go.

FT: Saudi Arabia is pushing to make a substantial cut in oil production when Opec meet

  
Analysis, Crude
#  #  #  #  #  #  #

OPEC meet 5 and 6 March in Vienna, the Financial Times says Saudi Arabia  is asking producers including Russia for a production cut of an additional 1m barrels a day

FT citing five people familiar with the talks,
Under the proposal, Saudi Arabia would account for the bulk of the new 1m b/d cut
  •  Kuwait, the United Arab Emirates and Russia would split the rest
  • Deal not yet been agreed
  • Moscow still hesitant
This proposal is up from the 600k bpd proposal previously floated.
OPEC meet 5 and 6 March in Vienna, the Financial Times says Saudi Arabia  is asking producers including Russia for a production cut of an additional 1m barrels a day

ASX listed Zoono product tests show > 99.99% effective against COVOID-19 (coronavirus)

  
  Analysis
#  #  #

Zoono Group is listed in Australia, report on laboratory tests undertaken against COVID-19.

  • results show that Zoono’s Z-71 Microbe Shield (the same Zoono technology used in Zoono hand sanitiser) is > 99.99% effective against COVOID-19.
This is not as straightforward as it sounds (its a hand sanitiser product, not a vaccine or the like), so here is the full text link.
Nevertheless, a bot of good news.
Zoono Group is listed in Australia, report on laboratory tests undertaken against COVID-19. 

Bank of America revises global GDP forecast to weakest since 2009

  
Analysis, Economy
#  #  #  #  #  #  #  #  #

Thursday note from Bank of America / Merrill Lynch

  • Project global growth for 2020 at 2.8%
  • slowest since 2009
  • Expect China to be weakest since 1990
And …
  • risks are still skewed to the downside
  • Our forecasts do not include a global pandemic that would basically shut down economic activity in many major cities
—
And, just thinking out loud …. does the coronavirus mean the yield curve inversion was right all along?

Guggenheim’s Minerd on Bloomberg speaks bearishly about markets

  
  Analysis

Bearish assessment of the market from Guggenheim’s chief investment officer Scott Minerd

If you want negative comments about the prospects for the markets, Guggenheim’s chief investment officer Scott Minerd has some. He says from a interview on Bloomberg television:
  • hard to imagine scenario that you can contain virus threat
  • expect 1/2 to 1% drag on US GDP. Not yet a recession
  • Europe, China are probably already in recession
  • stock market could be down 15 – 20%, would force fed and
  • by credit if spreads reach levels of 2015 energy hit
  • if crisis is US, not enough respirators to fight it
  • Fed may look to cut if yield curve inverts
The odds of 8 Fed cut at the March meeting has risen to near 60% over the last few days. That meeting will take place on March 18.

China, Japan, & South Korea at risk of a second wave of disruptions to their supply chains

  
  Analysis
#  #  #  #  #  #

South China Morning Post  on what is coming next –  ‘second wave’ of coronavirus economic impact

  • China, Japan and South Korea are at risk of a second wave of disruptions to their supply chains due to the ongoing impact of the coronavirus epidemic, which risks already slowing global trade, analysts warned.
  • The three Asian countries contribute around 24 per cent of the entire world economy with a combined yearly trading volume of over US$720 billion, forming one of the most integrated international economic blocs in the world.
Here is the link for more.

South China Morning Post  on what is coming next -  'second wave' of coronavirus economic impact 
Go to top