Equity markets are set to finish in positive territory as traders are hopeful about a rescue package from the US, in addition to that the G20 issued an optimistic message in relation to the Covid-19 crisis. 

The G20 have made it clear they are willing to do whatever it takes to combat the health situation. The group confirmed they will take the required steps in terms of healthcare as well as financing to tackle the emergency. The united front from the world leaders helped market confidence, because as far as the west is concerned, the battle is in its infancy.

In London, travel, transport and hospitality stocks are mostly positive – these sectors were some of the worst hit in recent weeks. The supermarket sector is mixed, as Tesco and Morrisons are higher, but Marks & Spencer are in the red. The banking industry is mixed, and Virgin Money is underperforming.    

Dixons Carphone shares are in demand today after the company confirmed that its online operation is seeing a big increase in demand on account of the pandemic. In the three weeks until 21 March, the UK and Ireland electrical division saw a 35% increase in revenue, and the online side of the operation registered a 72% jump in revenue. The firm’s shops in the UK, Ireland and Greece are closed, but the Nordic stores are open, and the e-commerce division is performing well. The group will not achieve its profit target or lower it net debt position – but these kind of updates are common in this environment.

Weir Group depend on mining and oil & gas firms for business as they provide support services to natural resources companies, so the group is preparing themselves for leaner times ahead. In the exploration and production sector of the energy industry, Weir are now anticipating that firms will cut expenditure by 30%, while their previous estimate was for a 10% fall. The group will cut costs, and it confirmed it has access to a £500 million credit facility.

Intu Properties entered the Covid-19 crisis in a weak state as footfall at retail parks was falling for years. Last month the group said it needed to raise more than £1 billion via a rights issue, but only a few weeks ago it scraped those plans on account of market volatility. Today, the firm said it only received 29% of the rent it was due for the second-quarter. As far as cash and credit facilities go, the firm has £184 million, and £95 million is in the pipeline for an asset sale. Intu will be seeking assistance from the government supported lending scheme. Today’s update was bleak, but given the price action, it seems like a lot of bad news was already baked into the price.

US

The Dow Jones and the S&P 500 are driving higher despite the dreadful initial jobless claims report.  The reading hit 3.28 million – a record high. The mammoth level highlights the impact the Covid-19 crisis is having on the US economy. Given that some businesses closed-up shop later than others, I fear next week’s reading is going to be painful too. The final reading of fourth-quarter GDP was 2.1%, but the jobless claims report caught traders’ attention. Traders are still hopeful the US government will sign-off on the $2 trillion rescue package soon – lawmakers will vote on it tomorrow.    

Signet Jewellers’ shares have surged on the back of the company’s strong quarterly figures. EPS were $3.67, topping the $3.47 consensus estimate .Same stores sales increased by 2.3%, while equity analysts were expecting an increase of 1.1%. The firm suspended its dividend, in addition to that it offered no guidance – hardly surprising in these challenging times.   

Micron Technology revealed impressive quarterly numbers after the close last night. EPS were 45 cents, exceeding the 37 cents forecast. Revenue topped expectations too as it came in at $4.80 billion, and the dealers were anticipating $4.69 billion. Looking ahead to the next quarter, group anticipates EPS to be 41-51 cents, which equates to a mid-price of 46 cents, and analysts were expecting 43 cents.  

FX

GBP/USD has been lifted by the weaker US dollar. Sterling has surged past the 1.2000 mark. The latest UK retail sales were poor, but the slide in the greenback took precedence. Last month, UK retail sales fell by 0 3%, which was a big swing from the 1.1% posted in January, it was revised up from 0.9%. If the February figures were bad, what will the March numbers look like? The pound is back above the $1.2000 mark. The Bank of England kept rates on hold at 0.1% - a record low, and that met forecasts.

EUR/USD has also benefited from the fall in the US dollar, it is back above 1.1000. The German GfK consumer confidence report tumbled to 2.7 – its lowest reading in nearly 11 years. The awful reading underlines the uncertainty in the largest economy in Europe.   

CMC Markets offer FX indices, and the CMC Dollar Index has taken a hit recently as the greenback has been hurt in the wake of the Federal Reserve announcing an open-ended stimulus package. Today’s jobless claims report didn’t do the greenback any favours. The CMC Dollar index hasn't fallen as much as the Dollar index June contract, as its euro component is smaller, and the yuan accounts for 20% of the index.   

Commodities

WTI and Brent crude are nursing losses today as traders remain fearful about demand levels. Even though there has been huge amounts of money thrown at the health crisis, and the US are tipped to approve their rescue package tomorrow, traders are taking the view that demand will tumble on account of lockdowns. The Saudi-Russian rift over price is bubbling away in the background too.

Gold has been lifted by the drop in the US dollar. The metal is quoted in US dollars so a fall in the greenback acts as a boost to the gold market. The colossal jobless claims report from the US is probably as sign of what is to come in terms of US economic indicators, so some dealers might be seeking out safe haven plays like gold. The closure of refineries in Switzerland continues to push up the gold market.  

Palladium is in the red after its monster move higher yesterday - the price surged as lockdowns in South Africa triggered supply concerns.

 

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.