Top 5 Things to Know in the Market on Monday, April 27th
By Geoffrey Smith
Investing.com -- New York and Italy, among others, outlined steps to reopen their economies as the peak of the Covid-19 pandemic passes. The Bank of Japan increased its stimulus measures to address the "grave" threat the economy. Crude oil prices tumbled again in anticipation of more carnage at the next futures settlement. Deutsche Bank (DE: DBKGn ) posted a surprise profit, helping European bank stocks to build on gains after S&P chose not to downgrade Italy's credit rating on Friday evening. Here's what you need to know in financial markets on Monday, April 27th.
1. New York, Italy, lead reopening trend
New York Governor Andrew Cuomo outlined Sunday a phased reopening for the state in the second half of May. Construction and manufacturing will be the first businesses allowed to reopen and others considered “more essential” would follow in due course.
Europe also moved further towards reopening over the weekend, as Italy’s Prime Minister Giuseppe Conte outlined a gradual lifting of lockdown measures. Bloomberg reported that Europe’s electricity consumption rose for the first time in eight weeks last week.
U.K. Prime Minister Boris Johnson returned to work and is expected to consider plans for a phased reopening of the British economy later Monday.
Elsewhere, schools in Shanghai and Beijing finally reopened fully.
2 Bank of Japan ups stimulus; yen rises
The Bank of Japan stepped up its efforts to support the Japanese economy, removing its self-imposed cap on government bond-buying and announced plans to quadruple its purchases of corporate debt.
The move will allow the BoJ to push government yields further below zero if it sees fit. Its previous policy was to cap yields at around 0%, but it had not needed to buy actively to ensure that, as private demand alone had kept yields below that level.
The yen rose 0.3% against the dollar to its highest in nearly two weeks, at the start of a week when both the Federal Reserve and the European Central Bank have policy meetings.
3. Stocks, gold set to open higher
U.S. stocks are expected to rise at the opening in response to the trend of easing lockdown measures, coupled with the prospect of further central bank support.
By 6:30 AM ET (1030 GMT), the Dow Jones 30 Futures contract was up 237 points or 1.0%, while the S&P 500 Futures contract was up 0.9% and the Nasdaq 100 futures contract 100 was up 1.2%
The benchmark 10-year Treasury yield was up three basis points at 0.62% while gold futures ticked down to $1,734,70 an ounce.
4. Deutsche Bank reports surprise profit, but Airbus slips
A relatively light start to the week for earnings in the U.S. allowed Europe’s blue-chips to take the spotlight. Deutsche Bank (DE: DBKGn ) led the region’s banks higher after reporting a surprise first-quarter profit despite a sharp rise in provisions.
Italy’s banks benefited from the reprieve given to their sovereign by Standard & Poor’s on Friday.
Lufthansa (DE: LHAG ) and Air France KLM (PA: AIRF ) shares rose sharply on reports of state aid, but Norwegian Air Shuttle (OL: NWC ) stock fell 5.2% on the terms of a new debt restructuring proposal from the government.
Airbus Group SE (PA: AIR ) stock also fell after a leaked internal memo hinted at deeper cuts to jobs and aircraft production. Airbus rival Boeing (NYSE: BA ) had walked away from its deal to buy Brazil’s Embraer at the weekend.
5. Oil prices tumble again on futures settlement fear
Crude oil was laboring again as traders priced in more stress when the current front-month futures contract settles. West Texas Intermediate futures were down 16.6% at $14,10 a barrel, while Brent futures were down 4.4% at $23.71 a barrel.
Analysts expect the U.S. to run out of physical storage within a month. South Korea said on Monday its commercial storage facilities were already full
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