Archives of “Bloomberg L.P.” tag

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Coronavirus – Fauci says an antibody could be ready by fall

  
  Analysis
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Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci spoke with (wait for it)  Facebook CEO Mark Zuckerberg in a YouTube event.

Some of Fauci’s remarks (via Bloomberg):
  • COVID-19 is very different from the severity of the 1918 virus
  • Monoclonal antibody drug could be ready for use by fall
  • No signs that face masks could cause harm to people
Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci spoke with (wait for it)  Facebook CEO Mark Zuckerberg in a YouTube event.
A little more on his timing remark …
  • by mid-to-late fall, early winter, we’ll know whether we have candidates that are safe and effective, and I hope and anticipate that we will have one or more.
  • If that’s the case, by the end of this year, beginning of 2021, we may have one or more candidate that is actually safe and effective. That being the case we can start distributing doses widely at that time.

Russia and Saudi Arabia support tapering oil cuts in August

  
  Analysis
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Bloomberg report

This doesn’t come as a shock but it’s going to be a very delicate balance in the oil market in the months ahead. OPEC+ wants to claim the market shares as demand comes back online but private producers are going to open the taps as well. We could very easily end up in a price war.

AstraZeneca and Gilead Science to merge?

  
  Analysis
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How likely is deal?

How likely is deal? 
Bloomberg reported that AstraZeneca contacted Gilead last month about a potential $232 bln pharma powerhouse merger. According to Jefferie analysts the merger is unlikely:

While Gilead may look cheap with its price-to-earnings ratio of 12 times and AstraZeneca may be attracted by the potential cost-cutting and decent free cashflow, Jefferies analysts said they do not view a deal as likely. “We think Gilead believes its HIV business is very underappreciated,” they said in a note, adding that the company “would prefer to build value over time and do its own tuck-in deals

China makes no 2020 GDP target – cites virus impact and global uncertainties

  
  Analysis
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Bloomberg report that China has dropped its economic growth target completely – there is no target set for the year.

Bloomberg citing a report to the National People’s Congress it has sighted.
In 2019 the target was 6 – 6.5% for GDP, which was hit (coming in at 6.1%)

 

Chinese oil demand is reportedly almost back to pre-coronavirus crisis levels

  
  Analysis
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Bloomberg reports on the matter

The report says that Chinese oil demand is all but back to levels last seen before nationwide lockdown measures were imposed to curb the spread of the coronavirus outbreak, according to people with inside knowledge of the country’s energy industry.

Adding that consumption of gasoline and diesel has fully recovered as factories reopen and commuters drive rather than use public transport.
The exact level of oil demand in real time – according to executives and traders who monitor the country’s consumption – is said to be about 13 million bpd, which is just shy of the 13.4 million bpd seen around May 2019 and the 13.7 million bpd seen in December 2019.
For some context, the apparent drop in Chinese oil demand was seen at around 20%:
However true the figures are from this report, it is certainly giving hope to oil bulls that the market can recover from the severe imbalance – and perhaps more quickly than thought – that we are seeing currently. WTI crude is now up by over 8% on the day to $31.85.

China is to start buying oil for state reserves after sharp drop in prices – report

  
  Analysis
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Bloomberg reports, citing people with knowledge of the matter

Bloomberg reports, citing people with knowledge of the matter

The report says that China is moving forward with plans to buy up oil for its emergency reserves after the epic crash in oil prices over the past few weeks.

Adding that Beijing has asked departments to quickly begin filling tanks and options to lock in the current low prices in the market. Also noting that Beijing may use commercial space for storage as well – in addition to its state-owned reserves.
I don’t think this comes as much of a surprise as China is the biggest crude oil importer in the world, and there has been so much speculation of them doing this already. There were even reports on this as far as three weeks back as seen here at the time.
But at least with China stepping in, it may help to briefly support prices somewhat in the near-term but don’t expect this to change the grand scheme of things.

Here are the US companies who are hiring

  
  Analysis
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This via Bloomberg, some hiring to offset the job losses elsewhere

Instacart 300,000
Walmart 150,000
Amazon 100,000
Dollar General 50,000
CVS 50,000
Albertsons 30,000
Pizza Hut 30,000
Dollar Tree 25,000
Papa John’s 20,000
7-Eleven 20,000
Dominos 10,000
Kroger 10,000
Walgreens 9,500

Pepsi 6,000
Service, delivery workers. There will be similar developments on other economies (scaled to the size of those economies of course).
These will not entirely offset the job losses ahead. Initial claims this week are seeing estimates, some of 3 million (BoA)

China refineries reportedly processing 25% less oil than they were last year

  
  Analysis
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Bloomberg reports on the matter

The report highlights that Chinese refineries are cutting back on output even further to cope with weak demand and a lack of workers due to the coronavirus outbreak.

Throughput is now reported to be 25% below the average in 2H 2019 and the low run rates are expected to last through February at the very least. The run rates have fallen to just about 10 mil bpd this week – the lowest since 2014.

China oil
That certainly won’t give oil bulls much encouragement and this is another warning sign to overseas oil suppliers to China surely.
This headline alone may not be one that impacts the market too heavily but just note that all of these things add up when you weigh up the potential impact of that the coronavirus outbreak is having on the global economy.

Michael Bloomberg climbs into 2nd place on PredictIt for Democratic nominee

  
Analysis, Politics
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Michael Bloomberg is going to get a chance to make his case

Michael Bloomberg is going to get a chance to make his case
We’re still waiting for results from the Iowa caucus but it’s expected to be a win for Bernie or Pete Buttigieg. The story in betting markets, however, is the poor performance from Joe Biden. The market is coming around to the idea that he can’t win and that establishment voters may turn elsewhere.
That leaves Klobuchar, who remains distantly behind, and Bloomberg, who is having his moment.
The billionaire has risen to 20% on PredictIt and passed Joe Biden. I think he lacks the charisma and ability to connect with people to sustain any real momentum, but he certainly has the deep pockets to sustain a run.
If he loses to Bernie, he’s ruled out a 3rd party run but I’m sure he will be dogged by those questions.

Will China GDP matter more to assets than any US-China deal?

  
  Analysis
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Via Bloomberg

China
The title of this post was a good question on Bloomberg’s Markets live blog at the end of last week. Mark Cranfield phrased the question as follows:

China’s 3Q GDP is due Oct 18 and it could be the first time on record that it prints below 6%. That could have a greater long-term impact on assets than a partial trade deal. Especially, as Bloomberg Economics expect policy makers to step up stimulus in response to stabilise the mainland economy.

If so, will that make China equities an asset class that become less correlated to the direction of Wall Street and global stocks? Would it trigger an asset swicth away from China bonds that spills over to other fixed income markets?

My assessment is that Firstly.  China’s GDP growth is going to be slowing due to reasons of growth. It is not the norm for developed countries to have double digit growth in the GDP. As China joins those developed nations it is only normal that GDP slows in pace.
Secondly, on a more general note, I think that the US-China deal matters more than the GDP figures. No deal – bad GDP would have been the worst outcome. With the US and China together making up 40% of the world’s GDP and the US on it own about 25% a good deal between those two countries should ultimately put positivity back into asset classes. It feels like the disaster outcome has avoided for now.
What is your take on it?
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