FTSE 100 closed at 5791 on Tuesday, losing 51 points over the day to finish 0.9% below its opening levels
- FTSE 100 tumbles 40 points
- Gold at its highest level in seven years
- Hyve Dives While Thinking About Fundraising
5:00 p.m .: FTSE closes in red as index underperforms against continental European and American counterparts
The FTSE 100 closed at 5791 on Tuesday, a loss of 51 points over the day to finish 0.9% below its opening levels.
“British bulls are clearly still in holiday mode today, the FTSE 100 and FTSE 250 both underperforming their European and American continental counterparts,” wrote Joshua Mahony, senior market analyst at IG.
Mahoney said home builders were the biggest losers, with the prospect of an economic collapse and a general halt in real estate transactions leading to the downturn in the sector.
“The recent decline in house prices amid Brexit uncertainty has prompted many builders to adopt a rental-build strategy, which is now under pressure as the long-term rental market is overwhelmed by vacation rentals and rentals. The collapse in rental yields across the country highlights how difficult home builders are, with many homeowners having to accept rents that are 30% below expectations. The Centers for Economics and Business Research pointed to a potential 13% drop in house prices this year. , the bulls of the market are shifting their attention elsewhere for the moment. “
4:00 p.m .: Attempt of rally founders
A late afternoon rally ran out of fizz just when it looked like the Footsie would reach par.
Just under half an hour away, the FTSE 100 lost 40 points (0.7%) to 5,802.
The mid-cap FTSE 250 was less successful, plummeting 231 points (1.4%) to 16,177, in part thanks to an 11% drop to 26p for the event organizer, (LON: HYVE), which confirmed media speculation that he planned to raise some money.
READ Hyve is considering raising equity funds to guarantee long-term prospects
3:00 p.m .: American indices open much higher
As what could be an interesting profit season starts in the United States, the Wall Street indices opened much higher.
The Dow Jones industrial average was up 567 points (2.4%) to 23,958 while the S&P 500 was up 65 points (2.4%) to 2,827.
“The turnaround among Wall Street strategists is also to be seen as the end-of-year targets for the S&P 500 are revised upwards after having been significantly reduced just a few weeks ago. It is a perfect demonstration of the idea that “price is feeling” because rising prices cause a wave of optimism just as falling inventories have caused a general decline. Such a flip-flop is of little use to long-term investors, but may warn short-term traders that too much good (or “less bad”) news is now embedded in stocks, 2 said analyst Chris Beauchamp market leader at IG.
In London, the FTSE 100 fell 46 points (0.8%) to 5,796, with manufacturers being among the hardest hit; PLC () was down 8.1% to 130.4p while PLC () lost 6.1% to 481.3p.
Break: the IMF says the world will experience the biggest recession this year since the Great Depression.
– Reduces global growth forecasts to -3%
– United States has weakest year since 1938
– UK’s weakest year since 1921
– IMF warns that much of the lost economic output in advanced economies will NOT return
– Ed Conway (@EdConwaySky) April 14, 2020
1:45 p.m .: Gold peaks in seven years
Good gold, bad oil, is the mantra of the markets today.
The price of the yellow metal is up US $ 5.90 (0.3%) on the futures market to US $ 1,767.30 an ounce – the highest in seven years.
Brent crude oil for June delivery was down 35 cents to US $ 31.39 per barrel.
“While the gold safety net relates to the decline in real yields, the idea that the impression of the central bank will lead to inflation seems a step too far given the deeply deflationary shock of Covid-19. However, despite inflation and inflation expectations, the impact of easing from the Fed and other central banks could see real yields fall further into negative territory, “suggested Neil Wilson of market.com.
“Crude oil futures (WTI for the first month) were even weaker with $ 22 cracked. The massive contango still leaves the June contract at over $ 29. The spread means that Spot Oil on the platform is trading at a huge premium over the normal futures contract, “said Neil Wilson, a man who obviously knows when he was contagious.
“While OPEC has reduced production and US production is dropping sharply, the massive build-up of stocks will likely take time to cool off and we do not see a sudden rebound in demand as economies take time to break out of the deadlock, “said Wilson.
“Additional reductions in a series of non-OPEC countries, including the United States, have increased the number of titles, although these reductions are not mandatory,” said broker, SP Angel.
“Instead, the market will force closings, a trend for which the Trump administration takes credit, since the United States has since billed the deal as a reduction of nearly 20 million barrels a day.” ; however, in reality, the figure will be more in the range of 15MBbdj at most.
“In any event, the drop in world demand exceeds the cuts so much that oil prices were unchanged yesterday and today. That’s not to say the deal won’t have any effect – instead, it could prevent a more catastrophic merger, even if it doesn’t bring prices up anytime soon, “said Sam Angel, Sam Wahab .
The London market is near its lowest point of the day, despite expectations that the Dow Jones will open around 300 more points and about an hour.
The FTSE 100 was down 49 points (0.8%) to 5,794, with economists and traders picking the bones from the reflections on the Office for Budget Responsibility’s three-month shutdown scenario.
12:15 p.m .: OBR forecasts a 35% drop in GDP if the UK is closed for three months
The “illustrative scenario” published by the Office for Budget Responsibility on the economic disruption caused by the spread of the coronavirus did not scare the horses very much.
The “what if?” The scenario calls for a 35% drop in the UK’s gross domestic product in the second quarter of the year and a two million rise in unemployment if UK PLC is shut down for three months.
Break: @OBR_UK publishes a scenario showing a 35% drop in UK GDP in the second quarter of the year. Unemployment up 2 million.
Extraordinary. More information on this soon.
– Ed Conway (@EdConwaySky) April 14, 2020
The FTSE 100 lost 38 points (0.7%) from 5,804.
11:20 a.m .: Market awaits news on foreclosure scenarios
The second half of the morning saw the Footsie slowly reduce its losses as the market awaits news of the UK closure.
The FTSE 100 index is down 20 points (0.3%) to 5,822.
Today at noon today, we will be releasing the results of a coronavirus scenario illustrating the possible effects on the economy and public finances of a 3-month shutdown and government policy responses. This is * not * a forecast, just 1 scenario out of many that could unfold. #OBRcovidscenario pic.twitter.com/znxkoDXBOW
– Office of Budget Responsibility (@OBR_UK) April 14, 2020
“The FTSE 100 is underperforming compared to its counterparts in the eurozone, and BP has been dragged into the red by the fall in the underlying oil market. Mining stocks like BHP and Rio Tinto are higher thanks to better than expected Chinese import data. Imports fell 0.9% in March, but economists expected a 9.5% drop, so stocks reacted well to the update, “said David Madden of the CMC.
9:35 am: sadly reassuring
The FTSE 100 made a reassuring and lackluster start to the shortened week, with the halo effect of dynamic Asian markets fading rapidly.
The index of main London stocks fell 28 points (0.5%) to 5,815, which was not the bull of performance stocks expected, but at least they can be reassured that the size of the movement does not looks nothing like the fluctuations we saw at the end of March.
Some familiar names were at the head of the retreating troop; The cruise ship operator () was the biggest bearer, down 7.3% to 895.6p, while another travel-related title, the hotelier InterContinental Hotels Group PLC () fell 5.2% to 3,517p.
“The closings are extended,” reported Neil Wilson, which explains why travel-related inventory is undergoing barge processing.
“The more bitter the pill, the stronger the medicine. At least that is what many governments are hoping for by prolonging the blockades and looking for a way out of the mess. France will only gradually reopen the country from May 11, while the foreclosure of India will be extended until May 3. The UK appears to be extending the lockdown for another 3 weeks until May 7. The hope is that the more pain there is now, the faster you can reopen the economy. We will need it – the French Minister of Finance, Le Maire, said that the GDP would decrease by 8% in 2020, “noted Wilson.
“Coronavirus: Some European Countries Relax Lockout Restrictions” #Coronavirus https://t.co/iFaeyaD4gF
– RAJESH RAJESH (@ RAJESHR98803206) April 14, 2020
On the positive side, the fashion retailer () is reopening its online operations “in a very limited way” from today after responding to workers’ comments in its warehousing and distribution operations.
“Next’s decision to gradually increase the capacity of its online industry seems prudent and suggests that it takes its responsibilities as an employer seriously,” said Russ Mold, chief investment officer of AJ Bell.
“By consulting unions, selling only limited items such as children’s clothing and using staff who won’t need to travel on public transport, this should avoid the kind of negative headlines that could damage the brand in the long term.
“This decision will also mean that the company generates at least a small turnover while the current containment measures remain in place, which stops bleeding by reducing the level at which it empties out of its cash.
“While some competitors have kept their online operations open during the lockdown, moderate demand means they are unlikely to have stolen much of Next’s market,” said Mold.
8:40 a.m .: Moderate progress after Easter
The FTSE 100 saw the new trading week begin with a groan rather than the expected roar, as the British blue chip index defied early bullish forecasts to open almost unchanged.
The benchmark London just managed a gain of 4 points to 5,846.18
WATCH: Morning report: flat start for the FTSE 100; Next to the reopening of online and distribution operations
It was thought that better-than-expected trade figures from China, which helped lift the stock markets in Asia, would have a similar impact on activity in London.
Instead, the mood was cautious with Square Mile’s price setters keeping their powder dry. They probably have an eye on Wall Street, where the Dow Jones Industrial Average ended Monday down almost 400 points as it prepared for a bloody first quarter earnings season.
“We are likely to see a number of canceled dividends, missed profit forecasts and almost completely wiped out futures,” said James Hughes, analyst at Scope Markets.
“With the epidemic causing chaos around the world, investors appear to have been flying blind when it comes to individual stocks,” he added.
Oil prices have not exactly started to rocket following the agreed reduction in production by the OPEC cartel, analysts saying the latest restrictions are simply not enough to support the market, which has been overwhelmed by millions of barrels of excess crude per day.
Footsie’s top ranking was (), which rose 6.5% after announcing the launch of a trial of its blood cancer drug Calquence as a treatment for coronavirus (COVID-19).
A sharp rise in the price of gold to more than US $ 1,700 per ounce had an impact on the silver miner Fresnillo () and the Russian polymer (), which increased by 5% and 6% respectively. The actions of Centamin (), which digs for yellow metal in Egypt, and of Petropavlovsk (), were also in demand.
After the sugar spike created by recent Saudi investments, the cruise company Carnival () was in diabetic territory, losing 6.6%. Reality has hit home with a second potential wave of reported coronavirus outbreaks over the weekend and blockages in the west are expected to continue well into the next month.
Proactive news headlines:
Silence Therapeutics PLC () president Iain Ross said the gene knockout specialist “has clearly become of age” after entering into two major trade deals in less than a year. His comments accompanied the drug developer’s results for the year ended December 31. During the period, he signed a research and collaboration agreement with Mallinckrodt Pharmaceuticals, which resulted in an initial payment of £ 16 million. The group’s biggest deal with was announced on March 25.
() has unveiled its new direction by announcing a reverse transaction in a “well-established” plastics recycling and reprocessing company. The company, which launched the process several months ago amidst comprehensive changes in direction, said the new vehicle would act as a consolidator in the industry. It has so far entered into a non-binding terms agreement for the transaction, which will see up to £ 60,000 in fees payable to the counterparty.
() has signed a “substantial new contract” for a late-stage, open-label Huntington’s disease (HD) study worth £ 10.5 million. The neuroscience data analytics company said the four-year contract will extend to 2024, with the majority of revenues to be generated in 2022 and 2023, bringing the total value of the new deals signed during its current year at £ 15 million. . Meanwhile, the company said it plans to report revenue growth “at least 25%” year-over-year during the six months ended March 31.
() said that its IO # 8 iodine plant in western Oklahoma is now in production. In a statement, the group said the plant was delivered on time and on budget and is expected to increase production levels to reach full skin over the next six weeks. The company said production of crystalline iodine in the first quarter of 2020 was 129.7 tonnes, more or less in line with the 134.4 tonnes produced in the same quarter of 2019.
() has signed a partnership agreement with the American company VictoryXR for the use of the company’s ENGAGE platform. The Virtual Reality (VR) group has said that VictoryXR, which specializes in scientific program content development and dissections of virtual animals in VR and augmented reality (AR), will import its content library to ENGAGE and provide its remote services to school children across the United States as part of an income-sharing agreement. In a separate announcement, VR Education also stated that it had appointed Shard Capital Partners as a joint broker with immediate effect.
(), the regional office property specialist, said it has seen a substantial increase in the value of its real estate portfolio. In a statement, the company said its investment and development portfolio was independently valued at the end of March at £ 139.5 million, up from £ 124.6 million a year earlier. . Net asset value (NAV) per share increased by 4.7% to 290p, compared to 277p at the end of March 2019; the company’s shares are currently trading at 170p.
Bluejay Mining PLC () said that it had signed a memorandum of understanding with a multinational commodity trading company and a major player in the ilmenite market, with a target of 200,000 tonnes per year of ilmenite production in the part of ongoing business discussions. At the same time, the group added, the first bulk sample of heavy mineral concentrate was produced at the Bluejay pilot plant in Contrecoeur for Rio Tinto Iron and Titanium. The pilot plant began operating in February 2020 and had been operating at full capacity for several weeks until the coronavirus epidemic (COVID-19).
Directa Plus () has announced that it will provide a special grade of its product G + graphene, known as ITC1, to its partner Iterchimica. The G + product is the differentiating component of Gipave, an asphalt super-modifier developed by Directa Plus and Iterchimica and follows successful trials in Italy and the United Kingdom. The agreement signed by the companies provides for the exclusive supply of the product G + graphene to Iterchimica in the asphalt and bitumen sector worldwide and is for an initial duration of three years.
() (TSE: HZM), the nickel company based in Brazil, has committed to donate 300 food parcels to the municipalities of Conceição do Araguaia, Floresta do Araguaia and Xinguara, in light of the socio-economic impact coronavirus (COVID -19) pandemic. Packages are delivered in April and May, the first being sent to families this week. The donations will benefit families in the vicinity of Araguaia’s nickel project municipalities in Horizonte who have been identified as vulnerable during this unprecedented period.
Limited () said there has been little disruption to its tidal activity due to the coronavirus pandemic. In a statement, the group noted that electricity continues to be supplied by the MeyGen project in Scotland to the grid and SIMEC Atlantis plans to maintain services there and in Japan for the rest of the year.
() took stock of the companies in its portfolio, as well as its own cash position during the coronavirus pandemic. “We continue to focus on providing investors with exposure to disruptive growth opportunities that have short-term revaluation potential and that would otherwise be inaccessible. To that end, we currently have eight multi-size, multi-sector owned companies, some of which have had notable successes recently while others have not behaved as we hoped, “said FastForward President, Lorne Aborny, in the press release. He noted that the company is currently working with its recipient companies to “monitor their positions and assess any potential impact”. of the coronavirus pandemic.
() revealed the results of its induced polarization survey at the Donovan 2 copper-gold project in Mexico. The company said it has identified two robust drilling targets associated with previously described geological corridors. A drilling program incorporating survey results is currently being planned, he added. US Oil & Gas PLC (USOP) has told investors it hopes to drill a new well in the second quarter 2020 as part of its project in Nevada. The authorization process is underway and, in a statement released on Friday, the company said that despite the effects of the coronavirus, current indications are that US federal and state regulatory processes could not be significantly slowed down. Restrictions on coronaviruses can, however, have an impact on operational delays that cannot be anticipated at this stage, he added.
() told investors that the allocation of shares to its Bahamian fund and the admission of these shares to trading on AIM have been delayed. These regulatory milestones were expected on Tuesday, but have not yet been completed due to the consequences of the coronavirus pandemic. Some administrative processes are still pending in the Bahamas, the company said.
() announced the successful conclusion of a second securitized financing agreement of US $ 200 million. The arrangement is arranged Guggenheim Securities, the lead investor is TIAA (Teachers Insurance and Annuity Association of America) and the company has noted that it retains many of the same important financial characteristics as the previous arrangement.
BlueRock Diamonds PLC () said its Kareevlei mine remains under maintenance and repair after South African President Cyril Ramaphosa extended the lockout period in the country until the end of April due to the coronavirus pandemic. “The extension of the lockout period is not a surprise and is consistent with what is happening in countries around the world,” BlueRock executive president Mike Houston said in a statement.
Nektan (), the international gaming technology platform and service provider, said it had failed to raise the funds for the additional working capital needed to secure the future of the business. As a result, the company said it had started the process in the courts of Gibraltar to seek to appoint a director, whose appointment is expected to take effect on Tuesday. Nektan said he had therefore asked that trading in AIM of his common shares be suspended with effect at 7:30 am today. A new announcement will be made in due course, he added.
() (NASDAQFIRSTNORTH: FARON) has informed its shareholders that its annual general meeting (AGM) will be held on May 18, 2020 at 10:00 a.m. (Finnish time) at the company’s offices at Joukahaisenkatu 6, 20520 Turku, Finland. Due to the situation of the coronavirus (SARS-CoV-2), the group declared that the AGM will only be held if the number of participants in the meeting is low enough to allow it to proceed safely and in accordance with the regulations. by and, therefore, it encourages shareholders to participate in the annual general meeting by means of centralized proxy representation and to follow it by webcast.
6:45 a.m .: Footsie should progress further
The FTSE 100 is scheduled to reopen on Tuesday, while European markets and some Asia Pacific markets will reopen after the long Easter weekend and before the final US earnings season.
The London large-cap stock index is called around 89 points higher by spread betters, after enjoying good momentum while the previous week’s holiday had closed sharply, up almost 165 points to 5,842.66.
Asian stocks were showing the way up Tuesday morning, with the Nikkei 225 up 2.7%, the Hang Seng and the Shanghai Composite up 0.9%, boosted by Chinese trade data that didn’t weren’t as bad as we feared.
Wall Street was mixed on Easter Monday, the Dow Jones Industrials Average falling 329 points or 1.4% to 23,390.77 and the S&P 500 by 1%, but the Nasdaq Composite rose 0.5%, before that the profit season is not yet fully underway.
“Gains are under threat as the earnings season kicks off this week and no one knows what to expect,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“The companies themselves are unable to predict what will happen in the coming quarters. The only thing we know is that a global lockout weighed heavily on businesses in the first quarter of the year, but unlike past earnings seasons, we don’t have a plausible benchmark. to effectively judge and compare actual results. “
The debate rages in the United States and elsewhere during the period of closure of the coronavirus pandemic (COVID-19) as the death toll increases, but daily peaks in many countries appear to have been surpassed.
Coronavirus infections worldwide have now surpassed 1.9 mln and the death toll is approaching 120,000, compared to 1.5 mln and just under 95,000 deaths before the long weekend, according to the latest COVID-19 data. from Johns Hopkins University.
In the UK, the government has confirmed that there will be no lifting of the foreclosure at this stage, with suggestions that the measures could be in place for at least four more weeks.
There have been some encouraging developments around the world, with more data confirming that the virus has reached a plateau in Italy, Germany and Spain. Italy has started opening some businesses, and Spain has authorized hundreds of thousands of non-essential workers to return to work on Monday, while Germany will decide on Wednesday to change or extend the restrictions.
Oil prices have moved little despite a 10% reduction in oil production agreement between Saudi Arabia, Russia and the United States – the largest supply reduction in history, producers being faced with a collapse in demand caused by the pandemic.
Over the weekend, the company stories included insurer Hiscox () accused of not paying “valid” business interruption claims related to the coronavirus pandemic; retail giant Next () restarts online shopping after a two-week hiatus; pubs are preparing to throw out thousands of barrels of beer that have passed their expiration date; and the water regulator is preparing to relax the rules on leakage penalties this year.
Tuesday should be a fairly calm day in terms of macroeconomic data, apart from the string of earlier Chinese trade figures and a small survey of the CBI’s UK financial services industry overnight which has showed a rather unsurprising drop in optimism in financial services in the three months to March.
The city’s newspaper is also nearly empty, but there will likely be many unexpected announcements from companies alerting investors to how they are coping with the pandemic.
The translation provider SDL, which recently mentioned that there had been no material impact on the activities of the coronavirus, apart from a slowdown in decision-making, is on the schedule. Measures have been put in place to save £ 8 million, while 2019 ended with net cash of £ 26.3 million, alongside bank facilities of £ 120 million.
Around the markets:
- Delivered: British pound up 0.4% to US $ 1.2559
- Oil: barrel of Brent crude up 0.6% to US $ 31.94
- Gold: one ounce of yellow metal dish at US $ 1,662.50
Important announcements expected on Tuesday:
Finals: (), ()
Trading announcements: Sirius Real Estate Ltd ()
- Britain will remain stuck for another three weeks as the cabinet debates whether to encourage certain people to return to work.
- Wall Street suffered the worst coronavirus crash, as long as there is no secondary epidemic in the United States, said
- North Sea “panic” as pandemic sets off perfect storm – British offshore oil industry faces a watershed moment that could change it forever
- British American Tobacco is the subject of a criminal investigation by the regulatory authorities in the United States for suspected non-compliance with the sanctions.
- Brexit negotiators try to pick up pieces as talks resume – Coronavirus disruption has delayed UK-EU agreement on future relations
- China posts trade surplus after easing of coronavirus shutdown – authorities are cautious as export markets in Europe and the United States remain under quarantine
- European governments scramble to find agricultural workers for the harvest – coronavirus stops continent’s seasonal migration patterns
- Donald Trump has said that Opec + is looking to double cuts in oil production to 20 million barrels a day because a historic deal promising record restrictions has failed to raise prices.
- Businesses are withdrawing credit lines at a record pace as businesses enter “survival mode” to cope with a sudden downturn in economic activity.
- According to the Center for Economics and Business Research (CEBR), house prices will drop 13% by the end of 2020 as transactions weaken and home buyers are hit by a deep recession.
- Call for end to ‘triple lock’ in UK pensions after coronavirus crisis – all generations should pay enormous economic cost, thinktank says