The spread of coronavirus in the world slowed down last week. In some countries, it was decided to partially lift restrictions, which in most cases applies only to certain sectors of the economy. The number of confirmed cases of coronavirus in the world exceeded 2.35 million, and the number of deaths exceeded 162 thousand.
Donald Trump presented a plan to remove restrictions and resume the functioning of the economy gradually. This process is supposed to be carried out in three phases. The decision to start the process of lifting the restrictions and moving to the next phase will be made by state authorities. Texas and Vermont plan to reopen certain businesses since Monday. The decision to reopen certain sectors was also made in Spain, Italy and Germany. The weakening of quarantine measures has also been announced in Israel and South Korea.
Stock markets continue to recover amid expectations of gradual resumption of economic activity, as well as due to the financial support provided by the governments in developed countries and monetary stimulus provided by central banks.
In the United States, negotiations have continued between Republicans and Democrats regarding the allocation of additional funds for a small business lending program in the amount of $250 billion. The distribution of previously allocated funds in the amount of $ 350 billion was completed last week.
Earnings season kicked off in the United States last week. Traditionally, banks were the first to present quarterly reports. Banking sector profit declined in the first quarter due to a lower interest rate and increased credit default risks.
Shares of the largest banks (Bank of America, JPMorgan, Well Fargo, Citigroup, Goldman Sachs) fell after the publication of reports.
Johnson & Johnson shares rose after the publication of earnings report, as financial results were better than analysts’ forecasts. The company’s revenue growth was fueled by an increased demand for healthcare products manufactured by Johnson & Johnson.
Intuitive Surgical, a manufacturer of robotic surgical systems, also reported better than expected results due to a significant share of recurring revenue in the company’s revenue structure.
Streaming giant Netflix will report earnings on April 21 after market close. Netflix reached a new historical maximum last week amid expectations of a significant increase in the number of subscribers around the world due to stay-at-home orders.
In March, Netflix registered a record network traffic, as well as a record number of Netflix application downloads.
Coca-Cola will present a quarterly report on April 21 before the market open. In the first quarter, a significant drop in the company’s sales is expected due to the closure of restaurants and other food establishments, amusement parks, schools and the cancellation of sports events.
Intel will report earnings on April 23 after market close. The introduction of quarantine in most countries can have a positive impact on Intel’s financial results amid growing demand for the company’s products due to the need to work remotely.
Quarterly earnings reports this week will also be presented by Peugeot, SAP, Procter & Gamble, Alcoa, Credit Suisse, American Express, Nestle.
The price of oil reached a new 18-year minimum, holding below $20. The price of oil fell due to a significant imbalance in supply and demand, which persists even after OPEC + decided to cut production. According to updated OPEC forecasts, global oil demand will decline by 6.85 million barrels per day this year. Such circumstances may force OPEC+ to further production cuts in order to stabilize the price of oil.
The price of gold updated 7-year maximum, reaching $1,747 per ounce. The price of gold increased as a result of a shortage of physical gold that arose due to quarantine restrictions, as well as amid weakening dollar.
Main events of the week
- On Monday, the consumer price index in New Zealand will be published.
- On Tuesday, data on the UK labour market, economic sentiment index in Germany, retail sales in Canada and existing home sales in the United States will be presented. The minutes of the meeting of the Reserve Bank of Australia will also be published.
- On Wednesday, data on the consumer price index in the UK and Canada will be presented, as well as data on crude oil inventories in the United States.
- On Thursday, data on manufacturing and services purchasing managers’ indices in Germany and the UK will be published, as well as jobless claims and new home sales in the United States.
- On Friday, data on retail sales in the UK and durable goods orders in the United States will be published, as well as German business climate index.
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