Bets on the spreads indicate that the Dow Jones will open 626 points less at 23,024 while the S&P 500 should drop by 64 points to 2,759.
- FTSE 100 lost 143 points
- US markets open sharply lower
- Admiral offers discount to auto insurance policy holders
2:15 p.m .: US markets open much lower
Traders are preparing for another punch in the US markets today.
Bets on the spreads indicate that the Dow Jones will open 626 points less at 23,024 while the S&P 500 should drop by 64 points to 2,759.
In London, the FTSE 100 was at its lowest point of the day – 5,670, down 143 points (2.5%).
Despite the bombardment of stocks, attention remains firmly focused on the oil market, where the rout continues.
In fact, the word “rout” seems to supplant “unprecedented” as the word most used by talking heads.
“The Oil Rout continues to grab all the attention in world markets as investors move from the Covid-19 crisis to the complete collapse of normalcy in one of the most vital components of the economy global, “said Chris Beauchamp at IG.
“While the May contract is now banned from history books, it seems that the June contract is going in the same direction, falling below $ 20 and then subscribing $ 19 and $ 18 in a short time for WTI, while Brent Brute suffered the same fate, ”he added.
“We observe that the markets are finally catching up with the reality on the ground in the oil market – a huge and nonexistent excess supply has combined with almost full storage facilities to cause a complete dislocation in the crude oil market and this is happening also felt on the stock markets, which could not remain indifferent to the chaos for a long time, but as the appetite for risk disappeared, the carnage spread beyond oil stocks, hitting mining stocks, banks and, in fact, almost every other sector of the FTSE 100, “continued Beauchamp.
To paraphrase Jaws II, just when you thought it safe to go public, Beauchamp had a warning for investors.
“Having decided that they could get through the coronavirus crisis, stocks now face an entirely different problem.”
Under normal circumstances it would be a good time to go out and fill up with gas, except for most people there is no reason to drive anywhere which is why the auto insurer PLC () offered their customers a £ 25 discount on their car insurance policies.
Reduced traffic equals lower claims equals windfall profits for insurance companies,
Admiral shares rose 2.6% to 2,252p, but not all parties (third parties or not) were satisfied; “The incumbent car insurance operators could make up to £ 1 billion in profit thanks to a reduction in claims of up to 50%. It is only fair that these funds be returned automatically to clients in accordance with individual policies, ”said Freddy Macnamara, founder of the insurance lobby group Cuvva.
“There is no doubt that this is a step in the right direction, but a month’s vacation leave spread over the months of April and May would more accurately reflect the use of the engine during lockout and long periods of isolation, ”muttered Macnamara.
If nothing else, the move brought Admiral to Twitter to the UK.
Admiral gets off to a good start – will other auto insurers follow suit? https://t.co/Nzt16f5gbw
– Steve Nowottny (@stevenowottny) April 21, 2020
12:30 p.m .: Red Sea
A mid-morning wake-up call has died down as investors continue to worry about the disruption in the oil market.
The FTSE 100 is down 105 points (1.8%) to 5,708, largely due to resource stocks and fellow travelers, such as the steelmaker (), which is down 8.7% from 240.5p and currently occupies the cellar position in Footsie.
The price of Brent crude for June delivery is $ 4.43 US to $ 26.33 US per barrel while for the US benchmark West Texas Intermediate (WTI), buyers of the June contract are invited to pay US $ 16.38 per barrel, down US $ 4.05 a day.
According to David Winans, credit analyst for PGIM, at these prices, the entire oil industry is under water.
“The focus is entirely on liquidity. How long can each of these companies hold their breath? The price movement of yesterday gives the impression that oil is passing a kidney stone. A very painful decision, but one that cannot last long, because the producers are cutting the wells right now. First quarter earnings matter little for oil / gas right now. Emphasis will likely be placed on the level at which firms can reduce capital spending without seeing production slow down.
“Liquidity and credit quality are now paramount, almost any dividend in the sector should be taken with a grain of salt. Most companies have already cut. The last cycle, the majors had a tailwind of refining and chemical margins, and they can’t count on that this time. There may be painful choices ahead depending on the length of this down cycle.
“The” supply shock “from the OPEC + collapse in March was truly a mirage, the demand shock from COVID-19 crushes everything. Ultimately, the path of oil prices will follow the path of this virus. Until demand shows signs of life, oil prices are likely to remain on life support, “predicted Wynans.
Sébastien Galy, senior macro strategist at Nordea Asset Management, believes that the pressure to reduce global oil production will intensify.
“In the coming days and weeks, we will see increased pressure for a new agreement with OPEC + and to reduce global production, potentially involving the Americans. This could potentially have a huge impact on oil prices, ”he suggested.
Crude oil prices: Why is a barrel of WTI oil cheaper than coke? – https://t.co/TvphkBishVhttps://t.co/e0hVkh5JEJ
– DeskTrading (@desktrading) April 21, 2020
10:30 am: Blue-chips protects against losses
The main stocks cut their losses after UK employment data, which was a bit difficult to understand given the foreclosure situation.
The FTSE 100 lost 75 points (1.3%) to 5,738.
Employment figures released this morning showed some signs that the effects of the coronavirus (COVID-19) epidemic were already starting to be felt in March, as the number of paid workers fell by 0.06% compared to the previous month, based on estimates.
The employment rate in the United Kingdom in the three months to February 2020 was estimated to be a record high of 76.6%, 0.4 percentage points more than a year earlier and 0.2 percentage points percentage higher than the previous quarter, said the Office for National Statistics (ONS).
The ONS added the warning that this morning’s estimated press release covers the period before the implementation of social distancing measures against coronaviruses (COVID-19).
The unemployment rate in the United Kingdom for the three months ending February 2020 was estimated at 4.0%, practically unchanged from the previous year and up by a tenth of a percentage point compared to the previous quarter .
In real terms (after adjusting for inflation), annual growth is estimated at 1.2% of total wages and 1.3% of regular wages over the three months until February 2020, both down from the recent 2.0% high recorded in the three months ending in June. 2019.
9:45 a.m .: Employment growth slowed in March
The number of paid workers in the United Kingdom in March increased by around 0.8% year-on-year, after an increase of 1.1% in February.
According to initial estimates in March, the number of paid workers fell 0.06% from the previous month, said the Office of National Statistics (ONS).
Median monthly wages increased 3.6% in February 2020, compared with the same period a year earlier.
– Howard Archer (@CommentArcherUK) April 21, 2020
9:00 am: Resource stocks under the cosh
Resource stocks are dragging the first gates of Footsie – which includes miners as well as oil tankers.
The FTSE 100 is down 116 points (2.0%) to 5,697 with (), down 5.4% to 1,272.6p, leading to retirement.
The owner of Primark (LON: AB) also received the treatment this morning after withdrawing his interim dividend and announcing a decrease in half-yearly profits from the effects of the coronavirus pandemic (COVID-19).
“AB Foods has produced a measured response to the effects of the pandemic, mitigating cost increases where possible and consolidating those areas of its business where some profit visibility is still possible,” said Richard Hunter, market manager at interactive. investor.
“Unfortunately, its flagship retail operation cannot be overlooked. Primark accounts for approximately 65% of the group’s adjusted operating profit, and since the store closings, all progress has been completely derailed, leaving a gaping hole in overall revenue. Previously, with sales of £ 650 million a month in its stores, that figure has now completely evaporated. For the moment, it is of course impossible to estimate the date of reopening of the stores – some Europeans being probably the first – and even in this case, the pursuit of social distancing should lead to a reduction in the number of people in these stores at any time, which in turn would continue to reduce revenues and profits, “he added.
The PLC () engineer, focused on security controls, defied the trend, increasing by 1.2% to 2,166p after announcing to investors that he planned to achieve “relatively resilient” performances in the middle of the crisis coronaviruses.
8:40 a.m .: A brutal fall hits Footsie
The FTSE 100 opened sharply lower Tuesday after a session of unprecedented volatility in the oil market which saw the trading price of West Texas Intermediate (WTI) in negative territory. In other words, “buyers” were paid to remove the barrels of oil from traders.
At the start of trade in London, this was still the case with the WTI at $ 4.51 per barrel. At the same time, the British blue chip index fell 101 points to 5,711.64.
WATCH: Morning Report: FTSE 100 Dives After US Crude Turns Negative for the First Time
“The historic drop in US oil prices into negative territory yesterday made headlines and divided opinions on the importance of a contract which should expire today, has little volume and is traded on very liquidity. weak, but he cannot hide what he is telling us about the state of the world economy, as well as the oil market, “said Michael Hewson of CMC Markets.
“The very fact that the May contract was even traded in negative territory tells us a truth that gives food for thought on the amount of supply available versus demand and, while June prices are still trading at $ 21 a barrel, that does not mean that they will not go in the same way, and fall sharply in the coming days, given that yesterday we saw net entries in the American oil ETFs. How long before these long positions also start to bail out? ” he added.
On the stock market, BP () and () each fell by 4%.
But the miner BHP () dominated the losers with a drop of 4.2% after cutting its 2021 budget due to the drop in demand from the United States.
However, precious metal stocks, led by Fresnillo () up 4.4%, were well bought after gold frankly surpassed US $ 1,700 an ounce as investors sought investments in paradises . Egyptian researcher Centamin () was also among the winners with an increase of 4% after a production update.
Proactive news headlines:
() has signed a contract with YaLLa Esports, one of the leading Middle East and North Africa (MENA) esports teams, to expand its RealGaming101 website in the region. Media company esports said the partnership will see a new MENA Arab region-focused website, RealGaming101.me, launched later this month targeting 93 million players engaged in the region.
(), the B2B banking and electronic payments group, said first quarter 2020 revenues were up 32% year-on-year to 8.3 million pounds. In an update, the company said its business-to-business (B2B) business accounted for 67% of revenue, up from 46% in the same quarter of 2019 and 52% for all of 2019. The group said that the “robust The first quarter performance was driven by its international payments operations, where revenues increased 116% year-over-year (YOY) and corporate banking, where revenues increased 30% year-over-year.
() Announced that it has received a Queen’s Award for Enterprise for its contribution to international trade. The radiation detector supplier said it was known for its “exceptional” growth in overseas sales, up 52% in the three-year period ending April 30, 2019. “It’s an honor to receive this prestigious award after a period of significant international growth for Kromek, ”said managing director Arnab Basu in a statement.
() said he “remains very confident” after a solid operational and financial year, although he acknowledged that locking the coronavirus would have some impact on the business. The company, which derives its commercial revenues from its expertise in cell engineering, saw its revenues for the year to December 31, 2019 jump 30% to US $ 21.6 million.
(), the UK employee services provider, has confirmed that its underlying profits were above expectations in 2019. The group had winked last month about better than expected performance and revealed on Tuesday that its adjusted underlying profit (EBITDA) was £ 11.0 million for 2019, down 4% from £ 11.4 million the previous year, but a little better than investment analysts had expected. Pre-tax profit increased 3% to £ 10.5 million from £ 10.2 million the previous year on revenues which jumped 28% to £ 70.9 million from 55.3 millions of pounds.
PLC () said that the ground position of the Alamo gold project had been significantly expanded, following a staking campaign by its local partner in the United States. The additional claim areas are registered with the County and the Land Management Office and the expanded land position will now cover an area potentially containing a proximal rock gold source for the 60 ounces of nugget mineralization already identified near the surface. has an option on the project and is currently undertaking due diligence.
The plumbing companies of Franchise Brand PLC (), Metro Rod, Metro Plumb and Willow Pumps, have found “continuous demand” for the majority of their services, which have been designated as “essential” by UK government rules in the event pandemic. In a business update released Monday after closing, the franchise company said it expects the B2B division, which includes Metro Rod, Metro Plumb and Willow, to continue trading profitably during the Coronavirus lockout, adding that in the first quarter of the year, the division’s profit (EBITDA) increased 42% year-over-year, while sales growth of the Metro Rod system continued accelerated to 19%, compared to 14%. Meanwhile, the company’s B2C division, which includes its brands ChipsAway, Ovenclean and Barking Mad, was 5% ahead of the previous year in the first quarter, although the company said it had “significantly reduced or eliminated ”franchise fees because the pandemic has affected the client. Franchisee product demand from early March. Franchise Brands also unveiled plans for a share placement to issue up to 19.9% of its currently issued share capital, with the participation of certain directors and senior managers for a minimum of £ 2 million.
(), the genetics, health and nutrition sector in aquaculture, announced that Alex Raeber is stepping down as Scientific Director. In a statement, the company said that Raeber would cease to be a director of the company effective July 31, 2020. He added that he had decided that as the company went from an investment phase into research and development at a commercial execution, the moment is right to move to new pastures.
PLC () (NASDAQ: TLSA), the US and UK-listed biotechnology company, has focused on the discovery and development of new molecules to treat human diseases in oncology and immunology, said having convened a general meeting to examine proposals to increase the powers to allocate shares; consider replacing the allocation of stock options and adopt new articles of association. The meeting will take place on Wednesday May 6, 2020 at 11:00 am and, as the company expects that significant restrictions on personal movement will still be in place due to the coronavirus (COVID-19), it will only be an electronic meeting.
(), the global healthcare advisory group, has announced that its annual general meeting (AGM) will be held at 12:30 p.m. on Wednesday May 20 at the offices of Cello Health Consulting, Cello House, West Street, Farnham GU9 7EQ. The group noted that, following its April 9 announcement, the board of directors decided that it was prudent to withdraw the recommendation to pay the final dividend of 2.95p per share, so that, the dividend resolution mentioned in the AGM notice will not now be brought to the meeting. The company also indicated that, if the home support measures remain in force, the meeting will be a procedural meeting and participation will be limited to a naked quorum composed of two director shareholders. In light of these measures, shareholders will not be allowed to attend the AGM and are strongly encouraged to vote by proxy on all business matters by appointing the chairman of the meeting as their proxy by submitting the form. He said he had also arranged for shareholders holding their certified shares to be able to vote electronically. Copies of AGA Notice, Cover Letter and 2019 Accounts are available for Company Website.
(), the developer of new generation proton therapy systems for the treatment of cancer, announced that following its announcements on April 9, it had convened a general meeting of shareholders to propose resolutions to finalize the subscription of ‘proposed actions. The meeting will take place at 2:00 p.m. on May 11, 2020, and in light of current restrictions imposed by the British government on public gatherings in response to the coronavirus epidemic (COVID-19), it will not be possible for shareholders to attend in person so they are strongly encouraged to vote by proxy before the deadline with the proxy circular and form available on the Company Website.
Baker Steel Resources Trust Limited () has declared that its audited annual financial report for the year ended December 31, 2019 is available for the company’s website.
6:50 am: Fall of Footsie expected
The FTSE 100 is expected to drop on Tuesday after extraordinary crude oil movements overnight, as US prices fall into negative territory.
The London benchmark was heading for a decline of around 92 points or 1.6%, according to the best betters on the IG platform, presumably driven by the oil giants Shell () and BP ().
Overnight, the US oil benchmark, West Texas Intermediate (WTI), fell to – $ 37.63 per barrel, after closing Friday at $ 18.27.
Wall Street was naturally thrown by this, the stock markets all being in the red, led by the Dow Jones Industrials Average down 592 points or 2.4% to 23,650.4. The broad S&P 500 fell 1.8% and the tech-rich Nasdaq Composite lost 1%.
Asian markets were also in the red on Tuesday, with the Nikkei 225 down 1.9%, the Hang Seng down 2.3% and the Shanghai Composite down 1.4%.
“I never thought I would see the day when oil would be this low,” market analyst Neil Wilson told Markets.com.
Oil prices are in a “super contango” state, which means that prices in the future will be higher than next month’s contract, demand having collapsed in the short term, but agreed production cuts Saudi Arabia, Russia and the United States have not yet taken effect.
“The world is awash with crude oil, with nowhere to put it,” said Wilson, with storage capacity close to longshoremen.
“The market hopes that WTI will be higher in the coming months, but demand will not rebound and already the glut of the first quarter threatens to overwhelm storage capacity. The destruction of demand is so huge and the storage already so tight that I would be hard pressed to see anyone wanting to take delivery in June or in Jule, “he added.
But with the expiration of the WTI May futures contract on Tuesday, David Madden of CMC said that the WTI June contract was “a better representation of the underlying oil market” and although it lost about 18% of its value, it stood above $ 20.00 a barrel.
“Once the May contract expires, things should stabilize in terms of monumental price fluctuations. “
Pending the day’s events, the main macro data for Tuesday in the UK is the labor market report, where some of the data will reveal the magnitude of the fallout from the coronavirus in March.
Although overall unemployment figures refer to the three months ending in February, before the government’s coronavirus lockout came into effect, the report will include data on the number of beneficiaries in March, including when UK has entered lockout.
The number of job seekers could be pushed to around 2 ml compared to 1.25 ml last month and the unemployment rate of applicants to around 5.5%, according to economists at RBC Capital Markets.
In the company news there will be updates on exchanges like BHP, London Stock Exchange and Associated British Foods.
Around the markets:
- Brent crude down 1% to US $ 25.32
- WTI up 104% to US $ 1.65
- Pound sterling down 0.3% to US $ 1.2408
- Gold down from $ 0.4 to $ 1,704.80
Important announcements expected on Tuesday:
Interim: (), ()
Finals: (), (), PLC group (), (), (), PLC ()
Trading announcements: BHP PLC (), London Stock Exchange Group PLC (), PLC (), (), Integrafin Holdings PLC (), ()
Economic data: Unemployment in the United Kingdom
- US oil prices have returned to above zero after historic plunge – concerns persist over crude demand as coronavirus strikes global economies
- Trump vows to temporarily halt immigration to U.S. – President says move is part of efforts to fight coronavirus as death toll reaches 43,000
- Mutations card holds key to mastering coronaviruses – scientists are creating a large family tree that will be crucial to stopping the pandemic and developing drugs
- Spain calls for 1.5 billion euro stimulus fund to “protect the internal market” – Economy Minister Nadia Calviño told FT that rich countries should not be able to support their economy more generously
- Few people will seek solace in retail therapy after coronavirus shutdown ends – survey shows only one in five Britons will hit stores after quarantine restrictions end
- A shipment of vital protective equipment from Turkey for NHS personnel had not been officially secured when the government announced on Saturday that it would arrive the next day.
- The economy is caught between a “pincer movement” of business closings and a collapse of start-ups, warned academics
- The number of vehicles on the road exceeded 40 million for the first time last year after the popularity of online shopping led to a sharp increase in delivery vans
- British households will have £ 43 billion less for essential spending between April and June, as the UK plunges into its deepest recession in decades
- Sales of baking ingredients, frozen vegetables and alcohol are up while make-up, garden plants and newspapers have taken a hit as the UK changes its buying habits during the crisis coronavirus
- One million people were put on leave on the first day, and about 140,000 businesses applied for the program within hours, with government pressure to extend the program until August.
- McLaren F1 millionaire father ace prepares electric bike revolution with rescue of Halfords stores