Market Report 4th May 2020

Market Report 4th May 2020 981 980 Realm
European markets are sharply lower this morning as tensions increase between U.S. and China over the source of coronavirus.

  • European stocks ended the week lower as dismal euro zone economic data and fears of a deep recession due to the ongoing corona virus pandemic weighed on sentiment and triggered a selloff almost across the board.
  • U.S. stocks moved sharply lower over the course of the trading day, extending the pullback seen in the previous session. With the steep drop on the day, the major averages continued to give back ground after ending Wednesday’s trading at their best closing levels in well over a month.
  • Asian stocks fell in thin holiday trade on Friday after Apple Inc. and Inc. warned of uncertainty ahead due to the coronavirus pandemic.

Global Macro

  • The US Federal Reserve on Wednesday left the target range for its federal funds rate unchanged at 0-0.25% and reiterated it is committed to using its full range of tools to support the economy hit by the coronavirus crisis. Policymakers said that the ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.
  • The US earnings season continues this coming week with over 1,300 companies reporting first-quarter results. On the economic data front, US non-farm payrolls are seen falling by 21 million in April and the jobless rate will likely jump to its highest since 1939 as the coronavirus pandemic hit the economy. Elsewhere, central bank policy meetings in the UK, Australia and Brazil will be in the spotlight as well as worldwide manufacturing and services PMIs. Other releases include trade figures for the US and China and GDP data for Hong Kong, Indonesia and the Philippines..
  • The number of people infected with the corona virus across the world hit 3.42 million, of which at least 240 thousand people have died and 1.09 million people have recovered. In the US, the epicenter of the disease, the number of infections surpassed 1.13 million, around 33% of cases globally. Across the Atlantic, Spain, the worst affected European country, registered more than 243 thousand cases, followed by Italy, the UK, France and Germany. The highest total for any country outside Europe or the United States was recorded in Turkey, with more than 122 thousand confirmed infections. The US is the country with more deaths caused by the virus with over 66 thousand, followed by Italy, the UK, Spain and France.
  • WTI crude futures rose above $20 a barrel in a volatile session on Friday, before erasing some gains to settle 5% higher at $19.78 a barrel, as major oil producers embark on the world’s largest-ever supply cut deal to offset a collapse in demand hit by the coronavirus crisis. The US oil benchmark found additional support late in the day after US oil companies cut oil rigs for a seventh straight week. Meantime, Brent crude settled at $26.31 a barrel. Both oil benchmarks snapped a three week losing streak, with WTI crude increasing nearly 17% and Brent gaining more than 20%.
  • The Baltic Dry Index, which measures the cost of shipping goods around the world, has lost some ground to 635, as the full impact of COVID-19 on supply chains is still unknown, with business leaders expecting problems to remain even as countries start to reopen their economies. However, the index increased above 700 points for the first time in three months in April, amid a gradual restart of industrial activity in China, whose demand accounts for almost 40% of total dry seaborne imports.

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