Top daily news
Investors are awaiting comments from Moderna regarding criticism of data on its vaccine against coronavirus. This morning, futures on US stock indexes are being traded higher. Market participants note that news about a possible drug and vaccine from Covid-19 is now the most significant for quotes of almost all assets, since the speed of quarantine cancellation in the world depends on it.
The US dollar index fell slightly today. Several physicians questioned the efficacy of the Covid-19 vaccine developed by the American company Moderna. The statement by Fed Chairman Jerome Powell to the Senate Banking Committee that his agency would continue to print money in order to support the US economy became another negative factor. The euro rose after the announcement of a fund of 500 billion euros to help the European countries most affected by coronavirus. It will be financed by the French and German governments, not by the ECB emissions. The unexpectedly good indicators of the German economy according to the ZEW (Zentrum für Europäische Wirtschaftsforschung) report were an additional positive development. The British pound strengthened thanks to good labor market data for April released yesterday. The number of new jobs far exceeded forecasts and was the highest for the year. Unemployment in April decreased compared to March. Earlier, the UK published positive data on inflation and GDP. Inflation data will be released in the Eurozone and Canada today, as well as the United States are going to publish the Fed’s April meeting proceedings.
Stock Market news
|Dow Jones Index||-1.55%|
On Tuesday, US stock indexes fell amid doubts about the rapid development of a Covid-19 vaccine by Moderna. The weak reports of Home Depot (-2.6%) and Kohl’s Corp (-7.7%) trade networks, as well as data on housing starts were an additional negative factor. In April, new housing construction in the US declined by a record 30.2%. However, the oil and gas, telecommunications and financial sectors became the top losers. Exxon Mobil and Chevron stocks collapsed by 3% due to lower oil prices. Securities of Bank of America (-3%), Citigroup (-2.7%), JPMorgan Chase (-1.8%) and Goldman Sachs (-2.2%) fell in price amid the risks of a negative Fed rate. Yesterday good growth was demonstrated by the shares of the companies providing services to the population in quarantine: Facebook (+ 1.8%), Spotify (+ 8.4%) and Walmart (+ 2.2% due to online orders). In general, investors are in no hurry to buy at current levels. The US S&P 500 stock index has already grown by 35% from its minimum on March 23. It is only 13% below the historic high of February 19 (at closing).
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Commodity Market news
Brent crude oil prices are traded at about the psychological level of $ 35 per barrel. The Independent American Petroleum Institute (API) forecasts U.S. crude reserves decline by 4.8 million barrels for the week. Official data from the U.S. Energy Information Administration (EIA) as usual will be published in 15-30 SET. The EIA forecast a decrease in shale oil production in the United States in June to a minimum since 2018. The Citigroup International Bank expects that a significant excess of oil on the world market in the 2nd quarter of 2020 may be replaced by a similar large deficit in the 3rd quarter due to the lifting of quarantine.
Gold Market News
Gold rises in price for the 2nd day in a row amid investors’ doubts about the rapid development of a vaccine against coronavirus, large-scale monetary emission of the world’s major central banks to support their economies and the risks of a negative rate by the US Federal Reserve, which now stands at 0.25%. The proceedings of the Fed’s April meeting, which will be published this evening, may have an impact on the dynamics of gold and oil.
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