TODAY ON WALL STREET: A few positive signs lift indices
|04/28/2020 | 09:04 am|
There is an improvement on markets today after a couple of good corporate results such as Pfizer and 3M. Investors are also more upbeat as they see an easing of lockdown restrictions across the globe.
Futures linked to the Dow Jones are up 1.5% today. The week also got off to a great start in Europe yesterday, with the DAX and Bel20 gaining more than 3%, while the CAC40 gained 2.55%. In the United States, the close was positive but less spectacular.
This morning, there is still talk of support plans, with an extension of Bank of Japan and Fed support in their respective countries. Financial newspapers are making their headlines about the glitches in the computer system responsible for collecting requests for support for SMEs in the United States, which has crashed in the face of the flood of requests. The relapse of the WTI barrel is also making headlines, after the world's leading oil ETF sold off its June contracts massively.
Investors are on the lookout for the many corporate publications expected this week, including Alphabet (today), Microsoft & Facebook (tomorrow) and Apple & Amazon.com (Thursday). They also know that the Fed and ECB are holding their regular meetings this week.
Since the beginning of the pandemic, there has been much speculation about the origin of the disease and its spread. From conspiracy theorists to deniers, the field is wide... Nevertheless, the scientific community is increasingly inclined to accuse states of minimizing the spread of the virus. The Chinese government recently admitted having forgotten a few thousand victims in the province of Wuhan. More recently, the Financial Times pointed out that the scientific data and statistics at its disposal show that the number of victims was probably 60% higher than the official figures.
Clearly, the death toll is more than approximate in countries without pharmacovigilance or at war, and there is no doubt that some governments are trying to minimize the health impact of the virus.
In Europe, away from the Dodd-Franck, Basel agreements and other regulatory frills, the health crisis has given free rein to the imagination of central banks and regulatory bodies to compensate for the economic slowdown through various monetary experiments. But the banking bodies should not be left out in the cold. Indeed, according to Reuters, the sector, which is being hit hard by the fall in interest rates and the growing risk of insolvency of its clients, should soon benefit from a new accounting easing. The European Commissioner for Financial Services is expected to propose a series of measures this week, inspired by those taken in the U.S., aimed in particular at limiting provisions for bad debts, in order to support the credit market.
Some U.S. stats are on the agenda today, such as the trade balance, because March's reading promises to be unprecedented, as well as wholesalers' inventories, the index of real estate price evolution in the metropolises by S&P Case-Shiller, then the Conference Board's consumer confidence index and the Richmond Fed's manufacturing index. Note that the U.S. central bank has extended its local government debt buyback program.