The US stock markets closed Thursday’s session flat, while Gilead shares tumbled past 4% after the company’s Covid-19 drug remdesivir gave
poor clinical results in a Chinese trial according to the Financial Times report based on accidentally released draft documents by the
World Health Organization.
New cases in Europe seem to be on a falling trend as attention turns toward the winding down of the economic
shutdowns across the continent. But news is mixed in the US, with reports pointing at significantly higher contagion numbers in New York
compared with the official counts. Fatalities in California rose the most during the last 24 hours.
WTI crude recovered to $18 a barrel
as Iran joined Trump’s strategic battleship game to wreak havoc in the Mid-East to support oil prices, as cutting production - which would be
the most gentle way of dealing with the oversupply issue, seems to be an unachievable dream for distressed oil producers. Iran responded to
Trump’s yesterday tweet by saying that they would bring down any US vessel that endanger the Iranian ships in the Persian Gulf. But the
recovery in oil prices are expected to remain capped as geopolitical tensions could hardly threaten supply in a meaningful way provided the
broadly flooded oil market. Resistance should come in play near the $20 level and above.
Still, energy companies are poised to react to any
sign of recovery in the oil markets. Exxon Mobile (+3.31%) was among the leading stocks in the Dow Jones, as BP closed 2.20% higher in London.
But
improved oil prices didn’t improve mood in FTSE futures (-1.58%) that hint at a bearish open in London today.
DAX futures (-2.52%) are
also expected to fall as the conclusions of Thursday’s EU summit fell short of investor expectations. EU leaders agreed on a
540-billion-euro rescue package to combat the coronavirus-led economic slowdown, to work towards a Recovery Fund and increasing the EU
budget to finance it by around 2% of gross national income, but they failed to agree on details around this package and sent the ball to the
European Commissions (EC) camp, which is now asked to come up with a proposal. The release gave little insight on the 2-trillion aid
investors were looking for. The EURUSD slipped below 1.08 on worries that the coronavirus crisis could tear the European block apart, as
core countries would be tempted to save themselves first before saving the others. Released yesterday, April flash PMI data showed
important contraction in activity, but given a near-complete economic shutdown, the numbers - though significantly lower than analyst
expectations, weren’t a shocker.
12.3. The British services PMI fell to a never-seen 12.3 low as businesses shut down to contain the
coronavirus contagion in late March.
Released this morning, core retail sales in the UK sank 5.1% m-o-m in March versus a 4.0% decline
penciled in by analysts amid shop and business shutdowns took a heavy toll on activity. Figures were lower than analyst estimates, but the
pound remained resilient faced with the terrifying data pointing that the UK is heading toward a historic economic recession, while
preparing to part ways with the EU as soon as the end of this year. Still, the dampened mood could drag sterling toward the 1.23 mark against a
gradually strengthening US dollar across the board.
By Ipek Ozkardeskaya