Archives of “April 24, 2020” day

rss

European equity close: More losses in a tough week

  
Analysis, Global Indices

Closing changes for the main European bourses:

  • UK FTSE 100 -1.3%
  • German DAX -1.6%
  • French CAC -1.3%
  • Spain IBEX -1.3%
  • Italy MIB -0.7%
On the week:
  • UK FTSE 100 -0.4%
  • German DAX -2.7%
  • French CAC -2.2%
  • Spain IBEX -3.6%
  • Italy MIB -1.0%
There is a similar picture in many equity markets of consolidation and uncertainty. The lack of urgency for more stimulus on the fiscal side in Europe is going to be a drag. Next week the ECB will roll out something new but I fear it will underwhelm because the toolbox is limited.
Closing changes for the main European bourses:

No one knows what’s going to happen to all the debt

  
  Analysis

Trillions upon trillions in debt is the economic legacy of the virus

Trillions upon trillions in debt is the economic legacy of the virus
I’m going to write about this all day today because it appears to be relatively quiet.
Here is the basic playbook right now.
  1. The government issues debt
  2. The central bank buys it to keep yields low
It’s an incredible shell game and it will work to a point. Effectively, I think governments are going all-in on this strategy. Politely, it’s not nice to talk about it and to pretend that at some point the debt will be paid down. The reality is that Japan is 20 years ahead of the rest of the world with the west rapidly catching up.
Greg Ip in the WSJ today writes about the growing US deficit. He notes that the Committee for a Responsible Federal Budget pegs the deficit at $3.8 trillion this year. I expect more stimulus, weaker growth and at least $5 trillion.
The added debt could “threaten the future of the country,” Senate Majority Leader Mitch McConnell said Wednesday.
The problem is that fiscal conservatives have been sounding the alarm for 25 years and it was a boy-who-cried-wolf situation, nevermind the hypocrisy of a $1 trillion corporate tax cut.
The old-fashioned fear is that interest rates will rise but the Fed can repress that. What the real fear should be is that it falls on the dollar as global central banks shift reserves.
Here’s a tweet from the former Goldman Sachs CEO that was mocked but it touches on something real:
BlankfeinMore on this later

FDA cautions against using hydrochloroquine for COVID-19, says it’s not proven effective

  
  Analysis

US Food and Drug Administration issues warning

  • FDA warns of heart risks
  • Cautions against use outside of hospital setting or in a trial
  • Drug has not been effective against COVID-19
This isn’t the final say and there appears to be some kind of war within the US administration about the guidance here. I think it’s safe to say that it’s not a miracle drug but it might be useful in the right circumstances. In the next few weeks there are going to be a bunch of proper studies on this and remdisivir published.
US Food and Drug Administration issues warning

Nikkei 225 closes lower by 0.86% at 19,262.00

  
Analysis, Global Indices

Asian equities softer to wrap up the week

Nikkei 24-04

The mixed tones in US stocks overnight didn’t really help with the mood in Asia as we see more tepid sentiment prevail in trading today. US futures are keeping slightly lower and that didn’t help investors feel much encouragement ahead of the weekend.

The Hang Seng is down by 0.5% while the Shanghai Composite is down around 1% so far today. On the week, the Nikkei finds itself down by just over 3%.
In the currencies space, the dollar is holding its ground as the aussie and kiwi retrace gains from yesterday and are both keeping lower to start the European morning.

Researchers in France are investigating if nicotine could protect people from contracting the coronavirus

  
  Analysis
#  #  #  #  #  #  #

AFP have the article, citing researchers at a Paris hospital

  • examined 343 coronavirus patients along with 139 people infected with the illness with milder symptoms.
  • found that a low number of them smoked, compared to smoking rates of around 35 percent in France’s general population.
  • “Among these patients, only five percent were smokers”
  • research echoed similar findings published in the New England Journal of Medicine on China research
Here is the link for more (best to read it before jumping to any conclusions, K?)
Love this pic BTW
AFP have the article, citing researchers at a Paris hospital 
Go to top