Inventories plummet as rallies sparkle; Oil spike: market envelopment

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(Bloomberg) – US equity futures fell and a recovery in Asian stocks waned as traders reflected on a dark stage in the coronavirus epidemic, which was showing persistent signs of damage to economies and businesses.

Crude oil reduced the 22% jump on Thursday, which came after President Donald Trump said that Russia and Saudi Arabia will cut production. Stocks fell in Australia and Hong Kong, while South Korean stocks fluctuated. Early gains in Japan gave way to losses, while S&P 500 futures fell about 1%. The new coronavirus infected 1 million people worldwide, just four months after its first appearance. The yen fluctuated and the euro fell.

With the foreclosure of many economies around the world expected to last longer, economic data shows the severity of the impact. In the United States, almost 10 million people have lost their jobs in the past two weeks, more than during the entire 2008-2009 recession.

“We are not going to see the real recovery in the market until what we think is the peak in the number of infections and deaths,” said Stephen Dover, equity manager at Franklin Templeton, on Bloomberg TV. “We will continue to have very high volatility until we overcome this uncertainty.”

Meanwhile, the impact continues to weigh on corporate balance sheets. American Airlines Group Inc. will cut international flights until the end of August as pandemic fighters travel through the normally busy summer season. Banco Santander SA will cancel the payment of its final dividend for 2019 and postpone all payments for this year until more clarity emerges on the economic impact.

Elsewhere, oil has retreated as doubts have crept into Trump’s claim that he has negotiated a deal to cut production.

“It is not easy for Russia and Saudi Arabia to reach an agreement because if they had been able to reach a production reduction agreement, they would have done so in March,” said Margaret Yang, strategist at CMC Markets in Singapore, on Bloomberg TV. Thursday’s decision may be just a “technical oil rebound, unless we see a substantial improvement in the fundamental picture”.

These are the main movements on the markets:

Stocks

Futures on the S&P 500 fell 1.2% at 5:15 a.m. in London. The index rose 2.3% on Thursday. Japan’s Topix index slipped 0.2%. Australia’s S & P / ASX 200 index fell 1.5%. Futures on the Euro Stoxx 50 fell 0.3%, while the Hang Seng index fell 0.6%.

Currencies

The yen fell 0.1% to 108.01 per dollar. The offshore yuan slipped 0.1% to 7.0969 per dollar. The euro fell 0.1% to $ 1.0850.

Obligations

The yield on 10-year treasury bills varied little at 0.59%. Australia’s 10-year yield remained 0.77%.

Raw materials

Crude oil from West Texas fell 4.8% to $ 24.11 a barrel after jumping 22% on Thursday. Gold fell 0.1% to $ 1,612.33 an ounce.

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