The big news this morning is that oil futures are reading record lows. Crude is currently priced below $12 a barrel! Yes, $12 a barrel. It has not been this price since 2002. The primary reason for this is because supply has dried up due to the coronavirus. However, the Russians and Saudis can thank themselves for starting the oil price collapse by initiating a price war at the outbreak of the coronavirus. Oil producers have tried to decrease production, but it doesn’t appear to be working. This is only going to make matters worse for oil and energy companies.
“The historic contango is a reflection of physical barrels that can’t easily find buyers and are being sold at distressed prices,”
Michael Lynch, president of Strategic Energy & Economic Research, told MarketWatch. “The implication is that storage might be more full than thought, or that buyers expect it to be very soon.”
The S&P futures are pointing 41 to 42 points. Key reasons:
- Treasury Secretary Steven Mnuchin is said to be close to reaching a deal with Democratic leadership on extending small-business funding.
- The White House said it would temporarily postpone some tariff payments for 90 days, but that wouldn’t apply to those implemented due to enforcement.
- Earnings kick into high gear as ninety-six of the S&P 500 Index companies and six of the thirty Dow Jones Industrial Average report earnings this week.
Central banks and governments everywhere have said they will do whatever it takes to support the global economy. Leaders of the Group of 20 – finance ministers and central bank governors from the world’s largest economies – have pledged they would introduce at least $5 trillion in economic stimulus.
The US Federal Reserve and the European Central Bank each said they had a limitless capacity to buy more bonds, including the corporate variety.
The Fed has cut interest rates to zero. Other global central banks made similar moves. And they are all prepared to take further action, as well… They aren’t going to let the system crumble.
Also, countries are increasingly discussing the reopening of their economies. Germany is allowing small businesses to open their doors again today. Other European nations are also considering the matter as the number of new daily infections is stabilizing. In the US, President Donald Trump introduced guidelines last week for a state-by-state restart.
But talk is cheap. If the situation isn’t going to fall apart and the markets are going to stabilize, we need to see action. Consequently, we’ll want to follow just precisely what those central banks and governments are doing to ensure a rebound when the global community is through the worst of the economic damage caused by COVID-19. Already, the Fed has told us it’s putting roughly $4 trillion to work to try and stem the tide.
Weekly Stock Earnings Report
ALLY, BMRC, BOH, CBU, HAL, KALU, LII, MTB, ONB, TFC before the open.
ACC, ADC, BMTC, BXS, CCK, CDNS, EFX, FFBC, GSBC, HXL, IBM, PNFP, RBB, SFBS, STLD, TBK, TSC, ZION after the close.
CIT, CMA, CTG, DOV, EDU, ELS, EMR, FHN, FITB, GPK, HCA, KO, LMT, MAN, MBWM, NTRS, PCAR, PEBO, PLD, PM, POL, SCL, SFNC, SNA, SYF, TRV, WBS before the open.
CB, CMG, CSL, FULT, HCSG, IBKR, MANH, MIND, NAVI, NBHC, NFLX, OCFT, PZN, RLI, SNAP, TER, TRST, TXN, UCBI, USBNA, WRB after the close.
APH, BIIB, BKR, BOKF, CPF, DAL, DGX, EVR, FCFS, KMB, KNX, LAD, NDAQ, NEE, NEP, SLGN, T, TDY, TMO, WWW before the open.
AMTD, AXTI, BDN, CASH, CDE, CLB, CNS, CSX, CVBF, DFS, ECHO, EGBN, FFWM, FNF, FR, GGG, HLX, ICLR, INBK, KMI, LOB, LRCX, LSTR, LVS, MC, MMLP, NEU, NTGR, NEW, OBNK, ORLY, OSBC, PFBC, PHR, PLXS, PUB, ROIC, RUSHA, SAM, SLG, SLM, SNBR, SRE, STC, STRM, STX , SUI, TCBI, UFPI, UMPQ, UVSP, VMI, WRE, XLNX, after the close.
ADS, ALLE, APD, ARCH, ARD, BB, BX, CNTG, CTS, CTXS, DPZ, ENTG, EWBC, FAF, FNB, FRME, GTLS, GWW, HBAN, HSY, IPAR, IVZ, LITB, LLY, LUV, LYTS, MTRN, NURO, ODFL, ORI, PHM, POOL, PTEN, RS, SAFE, SASR, SBNY, SQNS, TSCO, UNP, WNS, WSO, WST, WTBA before the open.
ABCB, ACBI, ASB, BGG, BOOM, COF , CSFL, CYBE, EHTH, ESRT, ETFC, EW, FE, FOR, GBCI, IEX, INDB, INTC, LLNW, MLNX, MMSI, MSBI, OCFC, OZK, PBCT, SBFG, SEIC, SIVB, SSB, TPH, VCRA, VICR, VLRS, VRSN, WWE after the close.
ALV, AXP, B, CIVB, FHB, GNTX, POR, SNV, VNE, VZ before the open.
AFMD, STRT after the close.
Weekly Economic Calendar (all times are EST)
Japanese Preliminary Export, Import for March
Japanese Preliminary Trade Balance for March
German PPI for March (2 a.m.)
Eurozone Trade Balance for February (5 a.m.)
Chicago Fed National Activity Index for March (8:30 a.m.)
UK Claimant Count Change, Rate, for March (2 a.m.)
UK Employment Change for February (2 a.m.)
UK ILO Unemployment Rate for February (2 a.m.)
UK Average Weekly Earnings Excluding, Including Bonuses for February (2 a.m.)
German ZEW Economic Sentiment, Current Situation for April (5 a.m.)
Existing Home Sales for March (10 a.m.)
American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)
UK CPI for March (2 a.m.)
UK PPI for March (2 a.m.)
UK Retail Price Index for March (2 a.m.)
UK RPI for March (2 a.m.)
French Manufacturing, Business Climate Index for April (2:45 a.m.)
French Production for April (2:45 a.m.)
MBA Mortgage Applications (7 a.m.)
FHFA Home Price Index for February (9 a.m.)
Eurozone Preliminary Confidence Indicator for April (10 a.m.)
Energy Information Administration Crude Oil Inventory Data (10:30 a.m.)
Markit/JMMA Japanese Preliminary Manufacturing PMI for April
Japanese Final Leading, Coincident Index for February
German GfK Consumer Confidence for May (2 a.m.)
UK Public Sector Net Cash Requirement, Borrowing for March (2 a.m.)
Markit French Preliminary Manufacturing, Composite, Services PMI for April (3:15 a.m.)
Markit German Preliminary Manufacturing, Composite, Services, PMI for April (3:30 a.m.)
Markit Eurozone Preliminary Manufacturing, Services PMI for April (4 a.m.)
UK Preliminary CIPS Manufacturing, Services PMI for April (4:30 a.m.)
UK CBI Industrial Trends Total Orders for April (6 a.m.)
Final Building Permits for March (8 a.m.)
Initial Jobless, Continuing Claims (8:30 a.m.)
Markit US Preliminary Manufacturing, Composite, Services PMI for April (9:45 a.m.)
New Home Sales for March (10 a.m.)
Kansas City Fed Manufacturing Index for April (11 a.m.)
Japanese CPI for March
Japanese Corporate Services, All-Industry Price Index
German IFO Current Assessment, Business Climate, Expectations for April (4 a.m.)
Preliminary Core Capital Goods, Durable Orders, Shipments for March (8:30 a.m.)
Final University of Michigan Sentiment for April (10 a.m.)
Baker Hughes Rig Count Data (1 p.m.)
CFTC Commitment of Traders Report (3:30 p.m.)
Evidence-based financial writer with 9 years of experience specializing in earnings, economic data coverage, and bond markets. I combine fundamentals, technicals, and macro to identify low-risk, asymmetric opportunities.