Bassanese Bites: Eye of the storm – April 06 2020
Global markets are still trying their best to “look through” the horrible economic data we’re now going through as a consequence of the COVID-19 lock downs. Last week, another 6 million were added to US jobless claims and 700,000 Americans lost their jobs in March. Yet a Trump tweet suggesting major oil producers (apart form the US!) might agree to cut production was enough to lift oil prices and even US equities for a time. China also reported an encouraging rebound in manufacturing and service sector indices in March as a result of some lifting in social distancing restrictions. And at least according to official data, there’s been no second wave of Chinese infections!
Looking at the week ahead, a potential deal to cut oil production might provide some further reprieve to the oil market, but most experts suggest even a cut of 10 million barrels per day (the number suggested) will still leave the global market over supplied. Wall Street has another opportunity to react to weak data with job (“jolts”) opening data on Wednesday and consumer confidence on Friday. Markets may also start to focus on earnings as the Q1 earnings reporting season begins next week.
