PRESIDENTIAL ELECTION Trump vs. Biden
Apr 29, 2020
New April polls between Donald Trump and presumed Democratic nominee Joe Biden still show a substantial lead for the former Vice President.
New polls from trusted polling organizations show a healthy six-point lead average for Biden over Trump in the general election. USA Today/Suffolk shows a large 10-point lead, while a FOX News poll from the beginning of the month shows the two candidates tied at 42 percent.
Approval ratings for Trump have been falling since he began public press conferences surrounding the country’s response to COVID-19. Biden’s numbers have remained steady despite an accusation of past sexual misconduct that many deem credible.
The Democratic National Convention starts on August 17, where Biden’s candidacy for the general electionwill be made official. Many are eagerly anticipating his choice for a running mate, which Biden has said will be a woman.
A new study from the Centre on Research on Energy and Clean Air has found that Europe's lockdown is resulting in fewer deaths from air pollution. Even though COVID-19 is inflicting a terrible death toll around Europe, the research found that an estimated 11,000 premature deaths were avoided due to improvements in the continent's air quality.
PM 2.5 levels are down 10 percent on the same period last year which is allowing people with conditions like asthma to breathe more easily. The research estimated that 2,083 premature deaths from air pollution have been avoided in Germany, along with 1,752 in the UK and 1,490 in Italy.
US: 84% of US small firms are paying less than 50% of rent due in May, and 40% are skipping rent altogether this month (based on a survey from Alignable)
US: Missing rent is going to generate tremendous losses for commercial real estate firms.
For many small and medium-sized enterprises (SMEs), PPP loan amounts will be insufficient to replace lost revenue, according to Moody's.
US: some updates on the epidemic.
Part of the reason for this persistently high rate is improved testing.
European bank shares remain under pressure.
European share valuations are near record lows relative to the US.
South Korea is headed for deflation.
Commodity funds posted their largest total monthly flow ever in April, mostly in gold and energy-focused ETFs.
Without government support, the survival of the US shale sector is now in question.
Many US shale companies are relatively small and are unlikely to weather this shock.
With shale production expected to collapse, speculators are betting on natural gas (gas production will decline with oil).
World: Which manufacturing sectors will be hit the hardest?
(I apologize for typos, if any. Please consider the environment before printing this mail.)
Closing Stock Market SummaryThe S&P 500 advanced 0.4% on Monday, closing near session highs, as strength in the mega-cap technology stocks helped the market overcome an increase in U.S.-China tensions and cautious commentary from Warren Buffett.
The tech-sensitive Nasdaq Composite rose 1.2% to climb past the benchmark index, Dow Jones Industrial Average (+0.1%) and Russell 2000 (+0.3%).
Over the weekend, the Trump administration stepped up its accusations against China for covering up the coronavirus outbreak, and Warren Buffett said he has yet to find any attractive opportunities in the market. Mr. Buffett, instead, used the uncertainty and volatility in the market to dump Berkshire Hathaway's (BRK.B 177.95, -4.72, -2.6%) holdings of airline companies.
These events helped send the S&P 500 down 1.2% shortly after the open, but the market gradually regained its familiar resiliency, guided by leadership from Microsoft (MSFT 178.84, +4.27, +2.5%), Amazon (AMZN 2315.99, +29.94, +1.3%), Apple (AAPL 293.16, +4.09, +1.4%), and Facebook (FB 205.26, +2.99, +1.5%).
Eight of the 11 S&P 500 sectors finished in positive territory, paced by the energy (+3.7%) and information technology (+1.4%) sectors. The industrials (-1.3%) and financials (-0.9%) sectors lagged the broader market.
The major U.S. airlines Berkshire sold -- Delta (DAL 22.57, -1.55, -6.4%), United (UAL 25.26, -1.36, -5.1%), American (AAL 9.82, -0.82, -7.7%), and Southwest (LUV 27.56, -1.67, -5.7%) -- took noticeable hits (again) and weighed on the Dow Jones Transportation Average (-2.0%).
Tyson Foods (TSN 55.32, -4.69, -7.8%) was a notable earnings laggard after the company missed top and bottom-line estimates.
U.S. Treasuries posted small gains to begin the week, pushing yields slightly lower. The 2-yr yield declined three basis points to 0.17%, and the 10-yr yield declined one basis point to 0.64%. The U.S. Dollar Index increased 0.5% to 99.54. WTI crude increased 3.0%, or $0.60, to $20.37/bbl.
Monday's economic data was limited to the Factory Orders report, which declined 10.3% m/m in March (consensus -9.1%) following a downwardly revised 0.1% decline (from 0.0%) in February.
- The key takeaway from the report is that it shows how quickly manufacturing activity dropped off as shutdown initiatives increased. That drop off should be even more pronounced in April.
Looking ahead, investors will receive the ISM Non-Manufacturing Index for April and the Trade Balance report for March on Tuesday.
- Nasdaq Composite -2.9% YTD
- S&P 500 -12.0% YTD
- Dow Jones Industrial Average -16.8% YTD
- Russell 2000 -24.2% YTD
Exclusive: Internal Chinese report warns Beijing faces Tiananmen-like global backlash over virus
BEIJING (Reuters) - An internal Chinese report warns that Beijing faces a rising wave of hostility in the wake of the coronavirus outbreak that could tip relations with the United States into confrontation, people familiar with the paper told Reuters.
FILE PHOTO: A woman wearing a protective mask is seen past a portrait of Chinese President Xi Jinping on a street as the country is hit by an outbreak of the coronavirus, in Shanghai, China March 12, 2020. REUTERS/Aly Song/File Photo
The report, presented early last month by the Ministry of State Security to top Beijing leaders including President Xi Jinping, concluded that global anti-China sentiment is at its highest since the 1989 Tiananmen Square crackdown, the sources said.
As a result, Beijing faces a wave of anti-China sentiment led by the United States in the aftermath of the pandemic and needs to be prepared in a worst-case scenario for armed confrontation between the two global powers, according to people familiar with the report’s content, who declined to be identified given the sensitivity of the matter.
The report was drawn up by the China Institutes of Contemporary International Relations (CICIR), a think tank affiliated with the Ministry of State Security, China’s top intelligence body.
Reuters has not seen the briefing paper, but it was described by people who had direct knowledge of its findings.
“I don’t have relevant information,” the Chinese foreign ministry spokesperson’s office said in a statement responding to questions from Reuters on the report.
China’s Ministry of State Security has no public contact details and could not be reached for comment.
CICIR, an influential think tank that until 1980 was within the Ministry of State Security and advises the Chinese government on foreign and security policy, did not reply to a request for comment.
Reuters couldn’t determine to what extent the stark assessment described in the paper reflects positions held by China’s state leaders, and to what extent, if at all, it would influence policy. But the presentation of the report shows how seriously Beijing takes the threat of a building backlash that could threaten what China sees as its strategic investments overseas and its view of its security standing.
Relations between China and the United States are widely seen to be at their worst point in decades, with deepening mistrust and friction points from U.S. allegations of unfair trade and technology practices to disputes over Hong Kong, Taiwan and contested territories in the South China Sea.
In recent days, U.S. President Donald Trump, facing a more difficult re-election campaign as the coronavirus has claimed tens of thousands of American lives and ravaged the U.S. economy, has been ramping up his criticism of Beijing and threatening new tariffs on China. His administration, meanwhile, is considering retaliatory measures against China over the outbreak, officials said.
It is widely believed in Beijing that the United States wants to contain a rising China, which has become more assertive globally as its economy has grown.
The paper concluded that Washington views China’s rise as an economic and national security threat and a challenge to Western democracies, the people said. The report also said the United States was aiming to undercut the ruling Communist Party by undermining public confidence.
Chinese officials had a “special responsibility” to inform their people and the world of the threat posed by the coronavirus “since they were the first to learn of it,” U.S. State Department spokeswoman Morgan Ortagus said in response to questions from Reuters.
Without directly addressing the assessment made in the Chinese report, Ortagus added: “Beijing’s efforts to silence scientists, journalists, and citizens and spread disinformation exacerbated the dangers of this health crisis.”
A spokesman for the U.S. National Security Council declined to comment.
REPERCUSSIONS
The report described to Reuters warned that anti-China sentiment sparked by the coronavirus could fuel resistance to China’s Belt and Road infrastructure investment projects, and that Washington could step up financial and military support for regional allies, making the security situation in Asia more volatile.
Three decades ago, in the aftermath of Tiananmen, the United States and many Western governments imposed sanctions against China including banning or restricting arms sales and technology transfers.
China is far more powerful nowadays.
Xi has revamped China’s military strategy to create a fighting force equipped to win modern wars. He is expanding China’s air and naval reach in a challenge to more than 70 years of U.S. military dominance in Asia.
In its statement, China’s foreign ministry called for cooperation, saying, “the sound and steady development of China-U.S. relations” serve the interests of both countries and the international community.
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It added: “any words or actions that engage in political manipulation or stigmatization under the pretext of the pandemic, including taking the opportunity to sow discord between countries, are not conducive to international cooperation against the pandemic.”
COLD WAR ECHOES
One of those with knowledge of the report said it was regarded by some in the Chinese intelligence community as China’s version of the “Novikov Telegram”, a 1946 dispatch by the Soviet ambassador to Washington, Nikolai Novikov, that stressed the dangers of U.S. economic and military ambition in the wake of World War Two.
Novikov’s missive was a response to U.S. diplomat George Kennan’s “Long Telegram” from Moscow that said the Soviet Union did not see the possibility for peaceful coexistence with the West, and that containment was the best long-term strategy.
The two documents helped set the stage for the strategic thinking that defined both sides of the Cold War.
China has been accused by the United States of suppressing early information on the virus, which was first detected in the central city of Wuhan, and downplaying its risks.
Beijing has repeatedly denied that it covered up the extent or severity of the virus outbreak.
China has managed to contain domestic spread of the virus and has been trying to assert a leading role in the global battle against COVID-19. That has included a propaganda push around its donations and sale of medical supplies to the United States and other countries and sharing of expertise.
But China faces a growing backlash from critics who have called to hold Beijing accountable for its role in the pandemic.
Trump has said he will cut off funding for the World Health Organization (WHO), which he called “very China-centric,” something WHO officials have denied.
Australia’s government has called for an international investigation into the origins and spread of the virus.
Last month, France summoned China’s ambassador to protest a publication on the website of China’s embassy that criticized Western handling of coronavirus.
The virus has so far infected more than 3 million people globally and caused more than 200,000 deaths, according to a Reuters tally.
Gapping down
In reaction to disappointing earnings/guidance:
- L -3.3%, PBI -2.3%, MCY -1.7%, CNA -1.2%, BRK.B -1.1%
M&A news:
- SMLP -18.7% (Summit Midstream Partners acquires Summit Midstream Partners in transformational simplification transaction; suspends common & series A preferred unit distributions; provides updated 2020 guidance)
Select ETFs showing early weakness:
- USO -2.8%, XLE -2.4%, XLF -1.3%, SMH -1.1%, DIA -1%, IWM -1%, SPY -0.8%, QQQ -0.6%, IGV -0.6%
Other news:
- SPR -6.2% (announces workforce reduction at sites supporting commercial programs)
- SPCE -6% (files for 150,464,840 share common stock offering by selling shareholders)
- BJRI -4.1% (to sell $70 million of common stock to Act III Holdings, LLC. and funds and accounts advised by T. Rowe Price Associates)
- SFL -3.1% (files mixed securities shelf offering)
- USAS -2.7% (provided an operations update, withdraws FY 20 guidance)
- DBI -2% (amends $400 mln revolving line of credit, co is now restricted from paying dividends and making share buybacks)
- XAIR -1.4% (files for 172,187 share common stock offering by selling shareholders)
- AVDL -1% (files for 9,167,839 share common stock offering by selling shareholders in the form of ADSs)
- TEF -1% (Telefonica S.A. confirms it is in discussions with Liberty Global (LBTYA) on a potential integration of their respective telecommunications businesses in the United Kingdom)
Analyst comments:
- CI -2.7% (downgraded to Mkt Perform from Outperform at Bernstein)
- DIS -2.2% (downgraded to Neutral from Buy at MoffettNathanson)
- QCOM -1.5% (initiated with an Underweight at Wells Fargo)
- HON -1% (downgraded to Hold from Buy at Deutsche Bank)
- CTSH -0.9% (downgraded to Market Perform from Outperform at BMO Capital Markets)
Gapping up
In reaction to strong earnings/guidance:
- WAB +7.6%, PFGC +2.2%, STWD +1.8%
M&A news:
- STML +148.4% (to be acquired by the Menarini Group in a transaction valued up to $677 million)
- KLXE +37% (KLX Energy Services and Quintana Energy Services (QES) to combine in an all-stock merger); QES +15.7%
Other news:
- APDN +43.6% (Applied DNA Sciences and Takis Biotech reports the production of neutralizing antibodies against SARS-CoV-2 after DNA vaccination in animals)
- CODX +8% (Logix Smart Coronavirus COVID-19 Test has been approved for sale in Mexico by the Mexican Department of Epidemiology)
- MNK +6.3% (announces positive findings in INOmax (Nitric Oxide) gas, for inhalation phase 4 observational registry in neonates with pulmonary hypertension; ends trial early)
- VIR +4% (Alnylam Pharma and Vir Biotechnology (VIR) announce the selection of a development candidate (DC) for VIR-2703, an investigational RNAi therapeutic targeting the SARS-CoV-2 genome)
- VXX +2.7% (rising with futures trading lower)
- MRNS +2.5% (provided an update on its clinical development activities and reported its financial results for the first quarter ended March 31, 2020)
- ALNY +1.6% (Alnylam Pharma and Vir Biotechnology (VIR) announce the selection of a development candidate (DC) for VIR-2703, an investigational RNAi therapeutic targeting the SARS-CoV-2 genome)
- GILD +0.7% (confirms that the FDA has granted EUA for remdesivir to treat COVID-19)
Analyst comments:
- LBTYA +0.8% (upgraded to Neutral from Underperform at Exane BNP Paribas)
Early premarket gappers
- Gapping up:
- KLXE +53.7%, APDN +28.5%, QES +17.7%, BJRI +9.1%, CODX +3.9%, VXX +3%, GILD +2.4%, GDX +1.7%, L +1%, GLD +0.6%
- Gapping down:
- SPCE -5.1%, SMLP -4.9%, SPR -4.3%, USO -3.5%, SFL -3.5%, TEF -2.7%, XLE -2.2%, CNA -2%, XLF -1.6%, XAIR -1.4%, DBI -1.3%, DIA -1%, IWM -1%, AVDL -1%, SPY -0.9%, WLK -0.9%, QQQ -0.6%, BRK.B -0.6%, WLKP -0.6%