- FTSE 100 closes 214 points lower
- US stocks plunge
- wanted to hope he could have coronavirus treatment ready next year
5.30 p.m .: FTSE 100 closes deep in red
The FTSE 100 index closed down 3.5% on Thursday as traders took off and financial stocks were the big losers in London.
Wall Street stocks also fell sharply, new data showing that about 3.8 million workers in the United States had applied for unemployment benefits last week, bringing the level to more than 30 million since the start of the pandemic.
Footsie closed more than 214 points at 5,901 that day. The mid-cap FTSE 250 was also down, losing more than 380 points to 16,454.
On Wall Street, the Dow Jones lost more than 368 points to 24,271, while the S&P 500 lost more than 39. Nasdaq, a techie, lost more than 63 points to 8,850.
The main laggard in the FTSE 100 was the investment group Hargreaves Lansdown (), which lost 12.64% to 1,440.50 points. Banking giant Lloyds () fell 7.25% to 32.24p after releasing its first quarter results this morning.
CMC Markets analyst David Madden said the pandemic is likely to trigger a jump in bad loans to the bank.
“It is fair to say that the economic situation will get worse in the short term, but at least Lloyds is in good health, as the CET1 ratio has climbed to 14.2%. The stock price has drifted lower as traders realize that loan spreads are likely to be further tightened, while loan impairments are about to increase, “he suggested.
3:45 p.m .: Risk day for equities
It is definitely a “risk” day today, in London and elsewhere.
The FTSE 100 lost 171 points (2.8%) to 5,945, with companies heavily invested in world markets being among the hardest hit.
(LON: JL.) Was down 12% at 1450.5p, () was 6.3% at 224.6p, Aviva PLC () was 6.0% lighter at 244.2p and () was 5.9% lighter at 281.9p.
Less than a dozen Footsie stocks were in positive territory, including favorite defensive stocks, such as pharmaceutical giant PLC (), up 3.1% to 8,463p, and public utility companies PLC (), () and United Utilities PLC (), which obtained small gains.
AstraZeneca was more optimistic than he hoped to have treatment for the COVID-19 coronavirus ready by next year.
“Yesterday’s risk evening left participants with a hangover: risky assets took a bit of a hit today in the midst of a slew of pretty rotten economic data and an ECB bailer that may not have been all of that, “said Neil Wilson in the markets. .com.
“There is also the feeling that the stock markets have acted too aggressively on Gilead news and need to see more evidence, while the FTSE has significantly underperformed thanks to the oil majors,” he said. added.
2:55 p.m .: Suddenly optimism comes to an end
In the United States, stocks started off badly after sluggish jobs.
The Dow Jones industrial average fell 283 points (1.2%) to 24.351 while the S&P 500 was down 25 points (0.8%) to 2,915.
“Initial jobless claims in the United States fell to 3.8 mln in the week ending April 25 from 4.4 mln the previous week, bringing its total in the past six weeks to 30 , 3 mln, “reported Berenberg Capital Markets.
“Although initial demands are down 44% from their peak in late March, the pace of declines has slowed, suggesting that unemployment will continue to increase at least until May.
* Continued UI claims, which are reported with a two-week lag, climbed to 18.0 mln in the week ending April 18 from 15.8 mln the previous week, almost tripling its level pre-COVID compared to the Great Recession of 2008-2009 ”, he added.
James Knightley, the international chief economist at ING, noted that “With an additional third of economically inactive 16-65 year olds, less than half of the working age population in America will earn a salary in May. “
“In an election year, that means calling on politicians to reopen the economy will only get stronger, regardless of health advice,” he suggested.
In Europe, Christine Lagarde, the governor of the European Central Bank (ECB) did not exactly have stingray at the ECB’s monthly press conference.
It had forecast a 15% drop in the European economy in the second quarter.
ECB economists estimate that the economy will contract between 5% and 12% this year.
* LAGARDE: THE EURO ZONE’S ECONOMY COULD SHRIN 12% IN 2020
* LAGARDE SAYS THAT THE ECB IS PREPARED TO EXTEND THE PEPP FOR THE NECESSARY DURATION
* LAGARDE: THE SAVING COULD REDUCE BY 15% AT 2TQ ON A QUARTERLY BASIS
* LAGARDE SAYS THAT THE ECB HAS NOT DISCUSSED THE APPLICATION AT THE MEETING TODAY
* LAGARDE:… https: //t.co/uixfitTOjU
– Alfonso Ricciardi (@ricciardi_maria) April 30, 2020
“Given the sharp contraction of euro area GDP in the first quarter of -3.8% from one quarter to the next and a much worse dip in prospect for the second quarter, this is only a matter of time before the ECB acts again, ”predicted Anna Stupnytska, head of Global Macro at Fidelity. International.
“The complication of the ECB’s dilemma is – no doubt without surprise – the persistent delay in daring budgetary action by the European Commission. As the details of the area-wide crisis instruments, including the MES lines and the stimulus fund, have yet to be finalized, the ECB must continue to do the heavy lifting. As things stand, it is unlikely that these instruments will be available before the end of the year or – in the case of the stimulus fund – early next year, “she added.
No wonder London investors are licking their wounds, with the FTSE 100 down 153 points (2.5%) to 5962.
1:45 p.m .: first jobless claims in the United States increased by 3.8 mln
US indices are expected to open lower after another bleak weekly job report.
Spread betting prices suggest the Dow Jones industrial average will open around 24,490, down 144 points from last night’s close, while the S&P 500 is expected to lose 12 points to start at 2 928.
The first time last week in the United States, jobless claims totaled 3.8 million, which is at least a slowdown from 6.9 million claims in late March, but it means that the the number of people applying for unemployment benefits for the first time has increased by around 30 million. in just about six weeks.
NEW UNEMPLOYED CLAIMS: About 3.8 million more workers applied for benefits for the first time last week, bringing the national total of the unemployed to 30 million – about 18% of the workforce. https://t.co/v9rkbCYznN
– WRCB-TV (@WRCB) April 30, 2020
In Europe, the European Central Bank (ECB) has announced additional liquidity operations, but has stopped using quantitative easing (QE).
“There will be a new round of longer-term, non-targeted pandemic (PELTRO) refinancing operations. There will be seven PELTROs and they will be made at 25 bp below the refi rate until September 2021. After several adjustments to the TLTROs at the last meeting, this is a new attempt to provide the banking sector and therefore the real economy more cash, “said Carsten Brzeski, chief economist of the euro area at ING.
“The decision to keep all the other instruments unchanged shows that the ECB first wants to take stock of all the measures recently taken. He probably also wants to keep some powder dry. And, this dry powder is necessary, because today’s GDP data gave us the first impression of the severity of the crisis in the euro area, “he added.
In London, the FTSE 100 posted a three-digit loss to 6,013, down 102 points (1.7%).
12:45 p.m .: Lloyds and fight against the wooden spoon
The Footsie was at its lowest point of the day halfway through the luncthime strading session, with a feeling touched by updates from two heavyweights in the index.
The London peak share index lost 81 points (1.3%) to 6,034, with oil giant PLC () on the verge of refusing PLC () the wooden spoon.
The first is down 7.7% to 1,339.2p after announcing a dividend drop this morning while the lender Lloyds was down 7.6% to 32,115p after the drop in profits in the first quarter.
“Often seen as a barometer of the UK economy, this Lloyds update highlights the magnitude of the challenges ahead,” said Richard Hunter, an interactive investor.
“Overall, the 1.4 billion pound depreciation allowance is up from the previous figure of 275 million pounds, and almost wiped out first quarter profit,” he noted.
Q1 20 revenues:
– Net interest income: 2.95 G GBP, -4.3% over one year
– Underlying profit: 558 M GBP, -74% over one year
– Remove directives
– LiveSquawk (@LiveSquawk) April 30, 2020
11:30 am: the downward drift continues
Euro area real gross domestic product (GDP) fell 3.8% quarter on quarter in the first quarter, in line with market expectations.
On a yearly basis, GDP fell 3.3% after increasing 1.0% in the fourth quarter of 2019.
Unemployment in the euro area rose to 7.4% in March, from 7.3% in February; the consensus forecast was for an unemployment rate of 7.8%.
The overall inflation rate in the euro area fell to 0.4% in April from 0.7% in March, which thwarted economists’ forecasts for a fall to 0.1%.
“It’s almost funny that in a quarter where estimates are probably as uncertain as they have ever been, the initial title of GDP is exactly in line with consensus. The revisions are guaranteed – we think they will be downward – but by and large, these numbers are likely to accurately reflect the situation on the ground in the first quarter, “said Claus Vistesen, chief eurozone economist at the Pantheon Macroeconomics.
Meanwhile, the still useful Coronavirus daily update from the Pantheon notes that deaths in UK hospitals continue to drop, but the government has been pushed to include deaths in nursing homes in the figures, which increased the number of deaths by 3811.
“Confirmed cases in the United States rose 2.7% yesterday, compared to a 3.5% increase the same day last week. The rate of decline in cases has slowed but is now stable, “said Ian Shepherdson, Chief Economist of the Pantheon.
Later, a day when many market players were surprised by reducing their precious dividend, Christian Nolting (CEO of Global Investments) and Markus Müller (Global Director of Investments) predicted that “the post-coronavirus world is likely to ‘be characterized by even lower yields, despite higher borrowing’.
“At the corporate level, the best suited sectors will adapt better and we will likely see failures elsewhere. Corporate profits are expected to decline more than current consensus estimates. Following long-term investment themes can help navigate this difficult landscape, “they suggest.
The FTSE 100 is down 35 points (0.6%) to 6,081.
10:00 am: Good and bad news from the Anglo-Dutch giant
In the battle of the Anglo-Dutch giants, the decline of PLC () outweighs the rise of PLC ().
The FTSE 100 is down 25 points (0.4%) to 6,090 with Shell, down 6.3% to 1,359.6 points, leading to retirement after shocking the market by reducing its interim dividend.
“Although very unusual, this drop was not unexpected given that the price of oil fell 60% in the first quarter as the market reacted to the Covid-19 epidemic, to the large oversupply caused by the Russian-Saudi dispute and growing expectations of a sharp decline. in future economic activity. The market naturally reacted negatively to this decision, “said Ian Forrest, an investment research analyst at the Share Center, perhaps suggesting that this decision was unexpected at least in some quarters.
“Investors are likely to focus on how the company expects the factors behind its decision to last beyond this year and therefore may fear that dividends are likely to be at current levels for some time,” added Forrest.
– Michael Hewson ???????? (@mhewson_CMC) April 30, 2020
Fast-moving consumer goods maker PLC () was on the sunniest side of Footsie Street, up 3.9%, art 6,654p after its first quarter trade update.
Some turmoil suggested the company had benefited from unconventional medical advice from President Trump regarding the use of bleach, but Emilie Stevens, equity analyst at Hargreaves Lansdown, noted that the company has many other brands of heavy weights.
“We hope no one will inject RB products, but the public is certainly buying them in large quantities – sales of Neurofen increased by a third and cleaning products like Lysol and Dettol were not far behind,” said Stevens. .
“This growth is likely to have exceeded RB’s wildest predictions and, therefore, RB expects a better year to come. However, RB was quick to point out that this level of demand could be short-lived, at a time when the group said it was difficult to distinguish between storage, actual growth in future sales and an increase underlying the request. Given that a vaccine is at least a year away and hygiene is a serious supporter of Covid, it is not unlikely that sales will remain higher, but for how long and for how long. level, it is not clear.
“Since the recent strategic overhaul 2020 was already going to be a great year for Reckitt, Coronavirus has provided a boost but RB still has work to do,” she added.
8:45 am: bad day for news
The FTSE 100 retreated at the start of the session Thursday as (B) put the kibosh on what was supposed to be a positive start in the procedure by reducing its dividend for the first time since World War II.
The move wiped out 7% of A and B stocks, which, due to their index weighting, proved to be a major swing factor. Oil partner BP () was not affected by Shell’s shock, however, leaving its quarterly payment unchanged earlier this week.
The British blue chip index lost 12 points to 6,103.64 at the start. We expected a warmer start to the procedure, especially with the Dow Jones Industrials average closing over 500 points higher on Wednesday in optimism about Gilead’s potential treatment for acute coronavirus symptoms (COVID-19).
Shell was not alone in spreading gloom. The quarterly update to () seemed about as appetizing to the market as a bucket of sick colds with stocks down 3.6%, dragging along with them (), down 3.5%.
“Lloyds feels the pinch of not having a large investment bank,” said Nicholas Hyett, analyst at Hargreaves Lansdown.
“While his rivals Barclays and saw an increase in trading activity offset the drop in interest income, Lloyds must take a chin shot. The drop in the base rate and revenues are down sharply and provisions for bad debts have decimated profits.
“Fortunately, the balance sheet has been more than able to handle the pressure in the first quarter, and the cancellation of the dividend means that the bank’s main capital ratios have actually improved.”
On the positive side, the gaming giant Flutter Entertainment () grew 5.6% after confirming that the merger with Stars Group will officially end next week.
Finally, trade in the first quarter of () gave a boost of 5.4% to the stock market price of the Anglo-Dutch consumer goods giant.
Proactive news headlines:
PLC () said it discovered a new outcrop of gold mineralization on its Glenish gold target in the Longford-Down gold trend. The gold exploration and development company said that sampling of the canal in the Glenish gold target identified gold in the bedrock – 1.0 meter (m) to 0.4 grams per tonne (g / t) – an outcrop of Arenite gouge, with pyrite mineralization. This newly discovered gold outcrop is located more than 500 m northeast of gold in the bedrock previously intersected by drilling and improves the overall prospectivity of the Glenish gold target, Conroy said in a statement.
() said he is focusing on the “optimal way forward” for the company which includes the development of Phase III of its key asset, Lupuzor, but will also focus on emerging candidates in the portfolio. Its nutting and peptide programs seem to have the potential to open up three therapeutic areas: cancer, metabolism and anti-infectives. ImmuPharma also told investors, when it released its 2019 annual results, that it was considering other potential uses of autoimmune diseases for Lupuzor separate from the treatment of lupus.
BATM Advanced Communications Limited () has released a coronavirus update in which it says the pandemic has not been very bad for its business. The group expects its Bio-Medical division to perform well during the global lockout period and that the Networking & Cyber division will experience a temporary slowdown. Given the uncertainty surrounding the duration and economic severity of the crisis, it is too early to estimate the financial impact on the business for the whole of 2020, said the real-time technology provider for the solutions. networking and medical laboratory systems. As previously announced, BATM has launched a new diagnostic kit to detect coronaviruses (COVID-19) which received certification in March 2020.
PLC () (NASDAQ: VRNA) described the plans for the coming months as he updated a busy start to the year and confirmed that he was in good financial shape. The company is focused on developing discoveries such as ensifentrin for respiratory conditions such as chronic obstructive pulmonary disease (COPD). The focus in the future is on preparing for a so-called end-of-phase II meeting with the U.S. Food & Drug Administration to discuss Verona’s success in delivering the drug using d ‘a nebulizer. Scheduled for this quarter, official conversation with the US regulator will guide the design of a phase III study.
PLC posted annual growth of 11.6% in the amount loaned in the first quarter of 2020. The lender, which operates in Russia and targets borrowers underserved by traditional lenders, said the amount funded in the first quarter increased to 2, 55 million pounds sterling against 2.32 million pounds sterling a year earlier and 2.28 million pounds sterling in the previous quarter. The amount loaned dropped slightly in March as the effects of the coronavirus (COVID-19) began to take root. In April, the lender said it had seen a significant drop in demand, resulting in an expected decline of about 44% year-over-year in the amount financed, which the company attributed to reduced attendance in Moscow as a result of the measures adopted regarding COVID-19[FEMALE[FEMININE
() announced “exceptional” drilling results from the Havieron deposit in Western Australia, confirming the continuity of higher grade mineralization. Latest drilling results widen the footprint of the mineralization in an arcuate sulphide zone as well as in the surrounding proximal breccias, the company said in a statement. Highlights of the drill intersections included grades up to 9.3 grams per tonne (g / t) over 22.8 meters n (m), as well as other cuts with grades of 6.2 g / t , 4.4 g / t and 3.8 g / t.
() said it had obtained £ 250,000 in additional funding through a loan with NatWest to increase working capital and continue its construction program planned for 2020. The media company said the loan, made through the program supported by the British government, will be withdrawn. in full and reimbursable in 12 monthly installments, the first of which is due 13 months after the draw. The company also said that, in accordance with the UK job retention program, it had extended the end of half of its full-time employees until the end of June and implemented a pay cut 50% for all staff earning more than £ 2,500 per month.
() recorded an increase in its full-year turnover, its underlying losses (LBITDA) having decreased by about 50%. For the year ended December 31, 2019, the Africa-focused timber group noted that revenues had increased 45% year over year to 19.5 million U.S. dollars, while its LBITDA from continuing operations was reduced to US $ 1.9 million from US $ 3.8 million. The company also said recovery rates for its sawmill in Gabon fell to 40% from 33% over the year, while after the period it resumed operations in Mozambique after more than two years.
European Metals Holdings Limited (LON: EMH) said the Czech Environment Ministry has granted Geomet the preliminary mining permit for the northwest part of the Cinovec deposit. The group said that the permit, which is a necessary legal pre-qualification before obtaining a final mining permit, has been issued for a period of 8 years and guarantees the company the priority right to request and obtain a final mining area and final mining permitted. She noted that the preliminary approval for the northwest part of the deposit covers an area of 1.27 square kilometers and, with existing preliminary mining permits, now encompasses the entire Cinovec ore reserve.
() (), the producer of base metals and gold / silver from the Hellyer gold mine in Tasmania, announced that it has appointed Limited as a corporate broker, with immediate effect, alongside First Sentinel which is the financial advisor of Aquis Exchange. The company noted that it specializes in the natural resources sector and provides ongoing long-term advice to listed companies on all aspects of new and existing shareholder engagement, as well as equity research.
(), the listed mining company AIM, declared having chosen to pay the interest of $ 29,591.45 due on April 29, 2020, on the $ 7,101,947 bond issued to Atlas announced on January 31, 2020 by the issuance of 15,582,523 shares at the price of 0.15327 fishing. He noted that, under the terms of the Atlas bond issuance act, the company has the right to choose to pay interest on the shares at an issue price of 90% of the weighted average price based on the volume of shares on the business day preceding interest. payment date.
6:45 am: the rally continues
Stock market rally expected to resume in the face of top-notch financial results, sentiment driven more by hopes of returning to “normal” than by counting costs of coronavirus blockage (COVID-19) to date .
In London, the FTSE 100 is expected to open around 60 more points, with IG Markets priced from 6,182 to 6,185 with just over an hour before opening.
This morning brings updates from (), (), (and J Sainsbury () as well as several others – most business news and financial results won’t make reading for shareholders enjoyable.
More generally, macro attention will be paid to the first economic indicators for April.
However, this is largely news from an American company that is stimulating the global equity market, as Gilead Sciences Inc’s () trial of remdesivir has shown some effectiveness in treating patients with COVID -19.
“This news simply acted as an even stronger tailwind for stocks as markets looked beyond the data for the promised land of an economy emerging from the lockdown, and slowly rebooting in a context of treatment for Covid-19 , quickly followed by a vaccine. Said Michael Hewson, analyst at CMC Markets.
“Let’s hope that this rose-tinted vision for the rest of the year doesn’t come up against the harsh reality of income erasure, as consumer spending struggles to recover amid caution and high unemployment. “
Last night in New York, the Dow Jones Industrials Average gained 532 points or 2.21% to close at 24,633. Likewise, the broad S&P 500 index rose 2.66% to end Wednesday at 2,939 and the Nasdaq Composite further strengthened, adding 3.57% to end the session at 8,914.
On Thursday in Asia, the Japanese Nikkei rose 539 points, or 2.74%, to 20,312, while the Hong Kong Hang Seng added 0.28% to 24,643 and the Shanghai Composite gained 1, 22% to 2,857.
Around the markets:
- Pound: US $ 1.2480, up 0.09%
- Gold Price: US $ 1,712 per ounce, down 0.1%
- Crude Brent: US $ 24.62 per barrel, up 20.33%
- WTI Crude: US $ 17.16 per barrel, up 39%
- Bitcoin: $ 9,278 US, up 17%
Important announcements expected on Thursday:
Trading announcements: PLC (), PLC (), Group PLC (), PLC (), St James’s Place PLC (), PLC (), (), (), Hikma Pharmaceuticals PLC (), (), (), PLC (), (), Lancashire Holdings Ltd (), (), (), Kaz Minerals PLC (),
Finals: (), (), Ocean Outdoor Limited (), ()
Interim: Up Global Sourcing Holdings PLC (), Apax Global Alpha Limited (LON: APAX)
The FTSE 100 ex-dividends index down 0.69 points from the index: ()
Economic data: Unemployment claims in the United States, Chicago American PMI, production of cars in the United Kingdom, house prices in the United Kingdom