15/04/20

EUROPE: Stocks edge lower as pandemic uncertainty continues.

As published on irishtimes.com, Wednesday 15 April, 2020.

Stocks in Europe edged lower while American equity-index futures retreated as investors scoured corporate earnings to gauge the impact of the coronavirus outbreak.

The Stoxx Europe 600 index declined for the first time in five trading days, falling 0.2 per cent. ASML, a crucial supplier to Samsung Electronics, reported a 40 per cent drop in first-quarter earnings and refrained from providing guidance for the next three months amid uncertainty caused by the pandemic. The Irish index of shares fell 2 per cent after the open.

Contracts on all three major US gauges fell after the S&P 500 closed at a one-month high on Tuesday, following earnings from Johnson and Johnson, JPMorgan Chase and Co, and Wells Fargo that provided a mixed picture. Goldman Sachs, Citigroup and Bank of America are up next.

Shares in Tokyo erased earlier losses to finished little changed. Chinese and Hong Kong stocks slipped, while Australian equities fell as a record slump in consumer confidence reminded investors of the impact of the pandemic on spending. The yuan dipped after China’s central bank eased policy further.

The earnings season should provide more of a sense of how the pandemic will affect global commerce. Investor pessimism over the economic damage of the virus is at “extreme” levels with cash positions at the highest since the 9/11 terrorist attacks, according to a Bank of America survey, while the International Monetary Fund said the “Great Lockdown” recession would be the steepest in almost a century. Meanwhile, federal officiahave reportedly started drafting plans to reopen the world’s biggest economy even as global virus infections edge closer to the 2 million mark.

“It’s really going to be about forward guidance,” Erin Gibbs, president and CEO at Gibbs Wealth Management, said on Bloomberg TV. “What we’re really going to be looking for is, are companies giving us an idea of when they think they’ll return to profitability, or, are they talking about more layoffs?”

Elsewhere,West Texas oil was steady above $20 a barrel after clawing back some of Tuesday’s slide. Gold declined. – Bloomberg