NEW YORK (Dow Jones) – After the strong plus on Tuesday, the US stock markets are steeply down again at midweek. Shortly after the start of trading, the Dow Jones index fell 2.3 percent to 23,403 points. The S&P 500 also loses 2.3 percent and the Nasdaq composite 1.9 percent. While hopes recently supported share prices that the corona pandemic may have peaked, doubts and fear of the economic consequences are now gaining the upper hand.
Last but not least, sobering economic data contribute. For example, the Empire State Manufacturing Index for economic activity in the US state of New York plummeted to its lowest level ever in April. At minus 78.2 points, it was well below the previous record low of minus 34.4 that was recorded during the financial crisis. Economists had only seen the index drop to minus 32.5 after hitting minus 21.5 points in March. Retail sales and industrial production also declined more than expected in March. Shortly after the start bell, inventories from February and at 8:00 p.m. CEST are followed by the economic report “Beige Book” by the US Federal Reserve.
Banks disappoint with slump in profits – Unitedhealth positively surprises
In the meantime, the balance sheet season in the USA is entering a new round. Before the start of trading, Bank of America, Goldman Sachs and Citigroup, three other major US banks reported on the course of the first quarter. JP Morgan and Wells Fargo’s figures released the previous day were initially well received, but later the two banks’ shares came under pressure as investors focused on the high provisions.
Bank of America is also putting in billions of dollars to prepare for potential credit losses due to the Corona crisis. The bank’s profit slumped 45 percent in the quarter, more than expected. The share falls 5.8 percent.
At Goldman Sachs and Citigroup, profits also almost halved in the quarter. Goldman Sachs’ share price is down 4.1 percent, Citigroup’s share is down 4.8 percent.
Against the negative trend, the share of the health insurer Unitedhealth tends to rise. The latter performed slightly better than expected in the first quarter and confirmed its annual targets.
Airline stocks are also in demand after industry companies agree with the U.S. Treasury Department for grants to help companies survive the corona crisis. United Airlines is 1.2 percent higher, Delta is 2.5 percent higher.
A gloomy demand forecast depresses oil prices
Oil prices are under pressure, according to the International Energy Agency (IEA) monthly forecast. The IEA sees a record slump in oil demand from the corona shock. The agency expects demand to drop to 1995 levels. The price of a barrel of US WTI light oil drops 1.2 percent to $ 19.87. Thus, the hope expressed by analysts at the beginning of the week has been dashed for the time being that the recent cut in production volumes by the Opec + countries could at least keep the WTI price above $ 20. Brent oil fell 4.4 percent to $ 28.30.
Commodity currencies like the ruble come under pressure in the wake of oil prices. The dollar rose from 73.03 the previous evening to 74.60 rubles. The situation is similar with the Australian and Canadian dollars and the Norwegian krone. Here, the losses range from 1.1 to almost 2 percent against the US dollar.
However, the experts at UBS’s wealth management department see the ruble as a short-term burden from falling oil prices and expect a recovery if the corona pandemic subsides. “In the longer term, an increase in economic activity should support oil prices and in turn help the ruble make up for losses,” says UBS expert Tilmann Kolb. At the end of the year, UBS is expecting a level of 66.00 rubles per dollar.
The dollar is also making up ground in other currencies. The greenback benefits from its reputation as a safe haven currency in times of crisis. The euro drops to around $ 1.0880. It had traded just under $ 1.10 during the day’s high.
The bond market as a supposedly safe haven is also experiencing brisk growth. Rising prices drop the ten-year yield by 7.6 basis points to 0.68 percent.
At the gold Meanwhile, after the recent increase, there are smaller profit taking. The price of a troy ounce drops 0.8 percent to $ 1,716. Here, too, the somewhat firmer dollar is likely to be a burden.
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INDEX last +/-% absolute +/-% YTD
DJIA 23,402.94 -2.28 -546.82 -18.00
S & P-500 2,779.95 -2.32 -66.11 -13.95
Nasdaq Comp. 8,354.07 -1.90 -161.67 -6.89
Nasdaq-100 8,550.22 -1.63 -141.93 -2.09
US bonds
Maturity Yield Bp to VT Yield VT +/- Bp YTD
2 years 0.21 -0.4 0.21 -99.5
5 years 0.37 -5.1 0.42 -155.6
7 years 0.54 -7.7 0.61 -171.0
10 years 0.68 -7.6 0.75 -176.9
30 years 1.30 -10.2 1.40 -176.7
CURRENCIES last +/-% Wed, 8: 24h Tue, 5.30pm% YTD
EUR / USD 1.0877 -0.96% 1.0961 1.0961 -3.0%
EUR / JPY 117.22 -0.38% 117.31 117.48 -3.9%
EUR / CHF 1.0534 -0.12% 1.0547 1.0537 -3.0%
EUR / GBP 0.8723 + 0.28% 0.8706 0.8709 + 3.1%
USD / JPY 107.76 + 0.58% 107.03 107.20 -0.9%
GBP / USD 1.2469 -1.24% 1.2591 1.2583 -5.9%
USD / CNH (offshore) 7.0736 + 0.37% 7.0619 7.0488 + 1.5%
Bitcoin
BTC / USD 6,737.51 -1.78% 6,912.51 6,901.26 -6.6%
ROHOEL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 19.87 20.11 -1.2% -0.24 -66.9%
Brent / ICE 28.30 29.60 -4.4% -1.30 -55.9%
METALLE last day before +/-% +/- USD% YTD
Gold (spot) 1,715.92 1,729.00 -0.8% -13.08 + 13.1%
Silver (spot) 15.50 15.85 -2.2% -0.35 -13.1%
Platinum (spot) 781.15 779.15 + 0.3% + 2.00 -19.1%
Copper future 2.30 2.33 -1.5% -0.03 -18.2%
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DJG / cln / raz
(END) Dow Jones Newswires
April 15, 2020 09:45 ET (13:45 GMT)
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