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$18.14 -0.3  -1.4%

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Sector
Technology
Size
Large Cap
Market Cap £6.68bn
Enterprise Value £7.56bn
Revenue £16.99bn
Position in Universe 984th / 6841

LIVE MARKETS U.S.-Coronavirus infects global trade

Tue 7th April, 2020 5:47pm
* Major indexes up, Dow out front * All sectors green: energy leads, staples lag * Dollar, gold drop; U.S. crude edges up * U.S. 10-Year Treasury yield ~0.78% April 7 (Reuters) - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by April Joyner. Reach her on Messenger to share your thoughts on market moves: april.joyner.thomsonreuters.com@reuters.net CORONAVIRUS INFECTS GLOBAL TRADE (1240 EDT/1640 GMT) U.S. imports of Chinese goods fell 31.3% year-over-year in February as the COVID-19 pandemic caused by the novel coronavirus slammed China and other Asian countries, according to Panjiva, the supply chain research unit of S&P Global Market Intelligence. Meanwhile, China purchased just $4.43 billion in U.S. goods that month, far short of its commitment to $11.9 billion a month under the phase 1 trade agreement. As a result, Panjiva says, "the latest data suggests that there's a risk of trade hostilities returning." A U.S. plan to defer import tariffs would not apply to Chinese or European goods subject to Section 301 tariffs or to steel and aluminum subject to Section 232 tariffs urn:newsml:reuters.com:*:nL1N2BO2SY. The biggest slump in imports among products on the 4A tariff list for U.S. imports from China was for network devices and televisions, including a 78.6% drop in large-screen TV shipments. Shipments associated with Best Buy BBY.N and Walmart WMT.N fell to near zero, according to Panjiva. U.S. vehicle exports to China also fell sharply, down 54.9%, in large part because Tesla TSLA.O is now producing vehicles in Shanghai. Meanwhile, Malaysia and Mexico may be beneficiaries of the shake-up in trade. Gojo Industries, the maker of Purell hand sanitizer, has received exemptions from tariffs on Chinese imports for pump housings and collars, but it has readjusted much of the rest of its supply chain. In the first quarter of 2020, Malaysia accounted for 45.5% of its imports, as compared to 36.4% from China, Panjiva said. Demand for ventilators has also boosted U.S. imports from Mexico, with a 36.2% year-over-year rise in February. Respiratory care equipment maker Fisher & Paykel FPH.NZ accounted for much of the increase. Panjiva also linked some shipments to electronic components maker Flex FLEX.O , which reportedly has committed to producing ventilator parts in response to high demand. urn:newsml:reuters.com:*:nL4N2BS00R (April Joyner) ***** DATA BEFORE AND AFTER CORONAVIRUS: JOLTS VS NFIB (1120 EDT/1520 GMT) Data released on Tuesday provided a stark contrast between the U.S. economic landscape prior to and following the brunt of the COVID-19 pandemic caused by the novel coronavirus. U.S. jobs market churn USJOLT=ECI eased a bit in February, before COVID-19-related shutdowns and anxieties yanked the rug from under the economy, according to a report from the U.S. Labor Department. Job openings and hires decreased from the previous month, with layoffs and discharges increasing modestly. Job quits, seen by economists as a gauge of consumer confidence given workers are unlikely to walk away from employment in times of uncertainty, tellingly inched downward as coronavirus stormclouds gathered. Small business confidence unsurprisingly took a dive in March, according to the National Federation of Independent Business (NFIB). The NFIB Business Optimism index USOPIN=ECI posted its largest drop in the survey's history, falling 8.1 points to a reading of 96.4. Sales expectations over the next six months sank to a net -12%, also the largest-ever monthly decline. About half of the small businesses responding to NFIB's March surveys said they can survive for no more than two months under current business conditions. Wall Street lingered in the black following Monday's rally as signs of a light at the end of the coronavirus tunnel kept bargain hunters at the party. All three major U.S. stock averages were posting solid gains, albeit off earlier highs. (Stephen Culp) ***** BRUSH ASIDE SHORT-TERM SWINGS AND FOCUS ON THE LONG TERM (1010 EDT/1410 GMT) LPL Financial Research has put out a note emphasizing that after a major decline in stocks, it may be wise to brush aside the daily headlines and instead focus on the long term. Indeed, they believe long-term investors can take solace in the historical performance. "The recent market volatility presents an opportunity for investors to assess their current portfolios in the context of their long-term plans," said LPL Financial Senior Market Strategist Ryan Detrick. "For many investors with a long-term investment horizon, this means considering adding equities to true up allocations to their targets, and we believe investors with long-term horizons can do so with confidence." LPL says that short-term volatility comes in waves, but stocks have an extremely attractive track record over the long term. According to their research, over all rolling periods since 1928, stocks have risen 76% of the time across a three-year horizon, and that percentage increases to 96% when zooming out over a 20-year horizon. Thus, LPL argues, when starting from levels as depressed as current market prices are, the risk-reward trade-off is even more appealing. (Terence Gabriel) ***** S&P 500: CLAW BACK TO CONTINUE (0915 EDT/1315 GMT) With CME e-mini S&P 500 futures EScv1 suggesting about an 80 point jump for the S&P 500 index .SPX at the open urn:newsml:reuters.com:*:nL1N2BJ0S6, the broad-market average is poised to continue to claw back losses from its February peak. (Click on chart below.) On Monday, the SPX ended back above its 200-week moving average (now about 2,647). urn:newsml:reuters.com:*:nL1N2BU0JS It was the first day the index closed above that moving average since Mar. 13. A close above the moving average to end the week (on Thursday, given the Good Friday market holiday) would provide further support for a recovery, as washed-out market internals continue to pick themselves off the mat. urn:newsml:reuters.com:*:nL1N2BI0M0 That said, the SPX still has work to do, since the recovery off the March trough could still just be a pause in a bear trend. Indeed, it may prove to be an a-b-c or 3-wave structure (Elliott Wave basis) off the low. The next resistance hurdles the SPX faces are 2,722.59, a c-wave Fibonacci projection, and 2,792.69, the 50% retracement of the February-March slide. Meanwhile, one important test for the SPX may be whether its daily RSI, which ended Monday at about 55, can muster enough strength to move back into overbought territory (>70.00). A stunted RSI could add credence to the recent rally being a bear-market bounce. urn:newsml:reuters.com:*:nL1N2BO117 A reversal below support in the 2,650/2,641 area could threaten to fill Monday's gap (2,538.18) as downside pressure may then once again intensify. (Terence Gabriel) ***** ANOTHER FUTURES BOUNCE ON HOPES OF CORONAVIRUS SLOWDOWN (0910 EDT/1310 GMT) S&P 500 e-minis EScv1 are on the advance again this morning, up about 3%, after governors of three U.S. states expressed hope that the coronavirus outbreak was beginning to plateau. urn:newsml:reuters.com:*:nL1N2BU0KB In a similarly optimistic vein, Treasury Secretary Steven Mnuchin said that President Trump was looking at areas of the United States where the economy could be re-opened and would seek to do so as soon as health experts gave a greenlight. urn:newsml:reuters.com:*:nW1N27101P Still, both health and government officials have warned against complacency as the U.S. death toll approaches 11,000. Here is a premarket snapshot: (April Joyner) ***** <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Live Markets April 7 2020 preopener IMAGE https://reut.rs/2Xj3VNx SPX04072020JPG IMAGE https://reut.rs/2UTiXZ7 JOLTS IMAGE https://reut.rs/2Ve3AcF NFIB IMAGE https://reut.rs/2XhIexF ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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