Archives of “March 2020” month

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Treasury yields surge higher despite equities selloff

  
  Analysis

The market is selling everything again

USGG10YR

10-year yields have now surged higher to be up by 11 bps at 1.19% as the market is going back to the theme last week i.e. sell everything. Gold is also still pressured, down by 2%, while European equities are down by over 3% across the board.
This continues to hint that there is definitely blood on the streets and it is also telling by the rush to the dollar we’re seeing this morning so far.

AUD/USD walks down a slippery slope under 0.6000

  
  Analysis

AUD/USD hits a fresh low of 0.5942 on the day

AUD/USD M1 18-03

There appears to still be no reprieve for the aussie against the dollar as the greenback surges with gains on the day while the aussie continues to languish amid the softer risk mood, and with anticipation of RBA QE measures tomorrow.
After falling below 0.6000 for the first time since 2003, the real last line of defense – if you really want to be picky – is a trendline support around 0.5915 currently.
But with current market sentiment so overwhelming, it is hard to imagine that being the place where the pair sees a dramatic turnaround. However, it could offer some additional support as the aussie stays pressured since the turn of the year.
There is no picking a bottom in AUD/USD until we actually do see the near-term technical picture shift back to favour buyers or the market sentiment starts to move past the pessimism from the economic fallout due to the virus outbreak.
Otherwise, once again, don’t catch the falling knife here.

France plans to hand out €1,500 to small independent workers

  
  Analysis
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Comments by French finance minister, Bruno Le Maire

  • Calls on workers who can, to keep working
So far, there are a lot of big plans touted by governments across the globe to try and tackle the economic fallout from the virus outbreak but how effective is the execution and transmission of all this remains to be seen.

US Federal Virus Plan anticipates an 18-Month pandemic and widespread shortages

  
  Analysis

The plan was released on Friday but reports on it only now leaking out

You’ll recall Friday was the day US President Trump declared a national emergency
New York Times:
  • federal government plan to combat the coronavirus
  • warned pandemic “will last 18 months or longer”
  • could include “multiple waves”
  • resulting in widespread shortages that would strain consumers and the nation’s health care system
The plan was released on Friday but reports on it only now leaking out

Coronavirus cases grew the most ever yesterday. Europe a certifiable train wreck. US growth exponential.

  
  Analysis
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Via Hedgeye (link below for more)

  • Global case continues to accelerate
  • According to the last WHO report, global cases grew 9.1% to 167,515 in the last 24 hours and added the most new cases since the start of the epidemic at 13,998
  • U.S. continues on it’s exponential growth path … . up 24% in less than 24 hours On this path, a case count of 10,000 by the weekend is on track.
  • Europe is a certifiable train wreck and we don’t see much that suggests the U.S. isn’t on that path
To finish on a brighter note:
  • Asia continues to encourage us that there is a light at the end of the tunnel as Chinese (if we believe it), Korean, and Japanese data remain promising

Link

corv coronavirus, US, europe, COVID-19

Oil services giant Halliburton rumoured lay offs (unpaid)

  
  Analysis
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Halliburton is a huge supplier of products and services to the energy industry.

The firm has been hit by the intertwined coronavirus and oil price plunge
Chatter about is that the business is requiring mandatory furloughs for around3,500 employees
  • at its its North Belt campus in Houston
  • From 23 March
  • One-week on, one-week off roster for up to 60 days
  • Employees won’t be paid on their week off
  • Health care and benefits won’t be affected
Like I said, chatter at this stage.
This will be just one example of lay offs right across industry.

China to expel US journalists from The Washington Post, New York Times, and Wall Street Journal

  
  Analysis
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China’s Ministry of Foreign Affairs statement said the three US outlets, along with Voice of America and Time magazine, will be designated as “foreign missions”

  • must report information about their staff, finance, operation and real estate in China
  • US citizens working for The Post, the Times and the WSJ, whose press credentials are due to expire before the end of 2020, must hand back their press cards
  • will not be able to go to Hong Kong or Macao as a base for work
Its unclear if the removal of press credentials also applies to those at VoA & Time

There is a real chance the US bailout package gets bogged down in politics

  
  Analysis

Don’t let a crisis go to waste

Elizabeth Warren doesn’t have much power in shaping the huge US bailout that’s coming together because she’s in the Democratic minority in the Senate. However the Democrats control the House and some of these priorities might find their way into the final bill — or at least into the discussion.
Both sides are going to say ‘don’t play politics’ but they’re going to be playing politics. This is going to be among the most-expensive bills ever signed — if not the most expensive — and politicians never waste a crisis.
These are the conditions obtained by Bloomberg’s Sahil Kapur:
Don't let a crisis go to waste

Italy bans short-selling of stocks for 3 months

  
Analysis, Global Indices
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Market regulator Commissione Nazionale per le Società e la Borsa (CONSOB)

  • The Italian Companies and Exchange Commission
dropping the news. 90 day short sale ban.
Not good news for market functioning but it pales in comparison to the deaths and illnesses being caused by the coronavirus. And the real economy impacts.

A Turnaround Tuesday. Major indices close higher.

  
Analysis, US Market
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6% gains for S&P and Nasdaq.

It is a Turnaround Tuesday for the major US stock indices.

The summary of what was a wild swing day is showing:
  • The S&P index rose 142.88 points or 5.99% to 2529.01. The low reached 2367.04. The high was up at 2553.93
  • The Nasdaq index rose 430.189 points or 6.23% to 7334.78. The low reached 6828.91. The high moved up to 7406.23
  • The Dow rose 1049.27 points or +5.2% to 21237.79. The low reached 19882.26. The high reached 21379.35
In the last hour of trading, their was what has been more typical volatility.  Below is the summary of the changes. Not only did stocks move higher, but the US 10 year yield moved up by 5 basis points.
6% gains for S&P and Nasdaq.
Although off the highs the major US indices are ending the day well off the lows.
Major indices close higher
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