Capitalization of the stock exchanges.
Archives of “October 22, 2020” day
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Russia and Saudi rightly concerned about oil demand
Latest from OPEC+ JMMC
On Monday October 19 the OPEC+ JMMC meeting did not present any surprises to the oil market. There was no recommendation to change the previously approved policy for 2021 reducing the group’s collective output cuts to 7.7mln bpd from 9.7mln bpd.
However, both Russia and Saudi Arabia highlighted the uncertain demand outlook given COVID-19’s resurgence. It is worth having a quick look at that in more detail as demand issues could drag on oil prices into November.
1). More people are working from home. There are fewer business trips, less frequent commutes, and this could become a ‘new normal. In Singapore nearly 50% of people are working from home. Look at the drop in mobility on the table below:
2) Travel is way down. Flightradar 24, providing real time online flight tracking service, sees a potential 3.5mln bpd decline in jet fuel consumption. This is due to a 48% drop in global commercial flights.
Jet fuel and gasoline inventory at major ports such as Amsterdam have soared to multi-year higher.
Global road traffic is way down with Sa Francisco road travel down around 70%.
So, although OPEC expects global demand to exceed pre-pandemic levels in 2022 that could be overly optimistic. Furthermore, the widespread adoption of electric vehicles is almost a foregone conclusion now which will in the longer term weigh on oil demand too.
The next JMMC meeting is November 17 and OPEC/OPEC+ meeting is November 30/December 01. It will be interesting to see how they respond to the mounting pressures that Saudi and Russia alluded to in their last meeting. Talk of production cuts will support oil prices.
Nikkei 225 closes lower by 0.70% at 23,474.27
A softer day for Asian equities
Stocks in Asia are largely following the mood from Wall Street yesterday, as stimulus talks get dragged on again and hopes for a pre-election deal continue to fade. US futures being marked lower by ~0.5% also isn’t really helping with sentiment so far today.
The Hang Seng is seen closer to flat levels, erasing some of its earlier losses while the Shanghai Composite is down by 0.6% but also off lows seen earlier in the session.
In the major currencies space, the more cautious mood is seeing the dollar keep a slight advance across the board as it retraces some of the losses from yesterday.
The more interesting action in the bond market yesterday is meeting a bit of a check, with 10-year Treasury yields seen lower by 1.5 bps to 0.807% currently.
Covid data in the US trending the wrong way
Hospitalizations up. ICU patients on the rise
The Covid data in the US is trending the wrong way as the US election looms on the horizon. Some numbers according to Bloomberg:
- New York doubled its case count over 2000. New Jersey at its highest case count since July
- 10 other states reported records including Wisconsin, Iowa, Nebraska and Ohio
- the Centers for Disease Control and Prevention citing for national studies predicted a probable inpatient increase of is much as 6200 daily over the next 4 weeks
- the hospitalization count reached 39,230 of which 8178 were in the ICU units (a 2 month high)
- the number of patients on ventilators reached 1889. That was the highest since September 10
- 37 states are reporting increased hospitalizations
- In Nevada where hundred supporters gathered on Sunday to see Pres. Donald Trump, the 9.1% positivity rate reached a 6 month high
- US Covid stats for the day showed 60,426 new cases vs. 60,061 yesterday. Deaths increased by 863 vs. 513 the previous day
The good news is that deaths are not following the case count
trump’s problem is that he overpromises and severely underdelivers
FBI: Russia, Iran have attempted to interfere with US election
US directory of national intelligence Ratcliffe announces the discovery
- US has identified Russia, Iran as countries who have attempted to interfere with the US election
- Has sent spoof emails designed to intimidate voters, incite unrest, damage Pres. Trump
- Aware that Russia has obtained some voter information
- intelligence community court threat, reacted swiftly
- This is not a partisan issue
- Prepared for actions by those hostile to democracy
The interference apparently came through emails threatening those who voted against Trump.
Radcliffe says that the email, apparently from The Proud Boys, is intended to hurt Pres. Trump. Of course, if a recipient was intimidated by the email, it might benefit Pres. Trump.
Regardless of the intentions, stopping interference in elections is certainly a prerogative. FBI’s Wray is on the wires saying:
- The FBI will not tolerate 4 interference elections
- Election infrastructure remains resilient
Some end of day US Covid statistics from Reuters
Covid trends across the US
- Record daily increases in Covid 19 deaths reported in Iowa, Minnesota, Montana, and Wisconsin
- Record daily increases in Covid cases reported in Illinois, Ohio, and Wisconsin
- Illinois reported 66 new Covid deaths on Wednesday, highest single day increase since June 17
- 12 of 50 US states have reported record daily increases in deaths so far in October.
- 26 states have reported record daily increases in new cases in October
Pelosi spokesperson: Conversation brings us closer to being able to put pen to paper
Speaker Pelosi’s chief of staff Drew Hamill
House speaker Pelosi’s chief of staff Drew Hamill is tweeting:
- Speaker Pelosi and Treasury Secretary Mnuchin spoke for 48 minutes
- Conversation brought 2 sides closer to being able to put pen to paper to write legislation
- with the exchange of legislative language, we are better prepared to reach compromise on several priorities
- Differences continue to be narrowed on health priorities including language providing a national strategic testing and contract track tracing plan
- More work needs to be done to ensure schools are the safest place in America for children to learn
- Pelosi and Mnuchin plan to speak again tomorrow hopefully with further guidance from committee chairs as they work work to resolve open questions
Tesla earnings better-than-expected
Earnings come in at $0.76 vs. estimate of $0.57
Tesla earnings are coming out better-than-expected with EPS at $0.76 vs. estimates of $0.57.
- Revenues $8.77 billion vs. estimate $8.36 billion
- 3rd quarter free cash flow $1.4 billion vs. $418 million quarter on quarter
The stock is trading up 3.3% at $437
Whirlpool also smashed earnings estimates on both the top and bottom lines and reinstated 2020 guidance
- Revenues $5.29 billion vs. $4.76 billion estimate
- earnings per share come in at $6.91 vs. $4.20 estimate. Dividend was up
- reinstated 2020 guidance expected $17.50 to $18 EPS vs. $13.50 estimate
- increased dividend to a $1.25
Whirlpool shares are up 9% in after-hours trading