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Market Report 20th April 2020

Market Report 20th April 2020 981 980 Realm
Global equities had a strong week and Europe higher today. Oil weak again today.
  • European stocks ended sharply higher on Friday, as stocks from across several sectors surged up after a report said a drug developed by Gilead Sciences showed promising early signs in coronavirus treatment.
  • US stocks moved sharply higher over the course of the trading day on Friday, adding to the gains posted in the previous session. With the continued upward move, the major averages reached their best closing levels in over a month.
  • Asian stocks posted strong gains on Friday as reports of promising early data related to a potential Covid-19 treatment from Gilead Sciences and U.S. President Donald Trump’s plans to reopen businesses helped investors shrug off weak economic data from China. 

Global Macro

  • The coronavirus will continue to dominate the headlines as well as first-quarter earnings, with nearly 500 US companies reporting their results and updating guidance on full-year expectations. Elsewhere, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will be keenly watched, while central banks in China, Russia and Turkey are seen cutting rates to help mitigate the negative impact of the pandemic. Other releases are US durable goods orders, UK retail trade and business optimism, Eurozone consumer morale, Japan trade balance and inflation, and South Korea Q1 GDP.
  • The price of US crude settled down 8.1% to $18.27 a barrel on Friday, the lowest level since January 2002, amid concerns about major oil producers’ ability to stabilize the market due to the collapse of fuel demand and after data showed the Chinese economy shrank 6.8% yoy in Q1, the first contraction ever due to the coronavirus pandemic. WTI prices were also pressured by the expiration of the current May contract. On the week, US crude prices declined 19.7%, as OPEC expects global oil demand in 2020 to contract 6.9 million barrels per day, compared to last month forecast of a small increase of 60,000 bdp, while data showed a larger-than-expected build-up in US crude stocks.
  • The number of people infected with COVID-19 around the world rose above 2.2 million, of which more than 150 thousand have died while nearly 570 thousand have recovered. In the US, the epicenter of the disease, the number of infections surpassed 700 thousand, equivalent to 31% of cases globally. Across the Atlantic, Spain, the worst-affected European country, registered 188,068 cases, while Italy, France, Germany and the UK also reported high numbers. The US is the country with more deaths caused by the virus, with at least 35 thousand, followed by Italy, Spain, France and the UK.

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