04May2020 Pre-Market Commentary: DOW Futures Slump As Markets Fret Over US Pressure On China Over Coronavirus, DOW Down 190 Points, WTI At 22.08, Gold Slipping At 1700

Here is the current market situation from CNN Money

European markets are lower today as French and German shares fall. The French CAC 40 is off 3.47% while the German DAX is down 3.26%. The FTSE 100 in London is not trading.

France rejects Amazon’s request for unemployment schemes at six sites

The French government has rejected Amazon ‘s request to tap a state partial unemployment scheme for employees at its six warehouses in the country, a spokeswoman for the labour ministry said on Monday.

Tyson faces safety costs, sales hit from coronavirus

Tyson Foods Inc said on Monday it would temporarily close plants as needed in the battle with the coronavirus outbreak and expects meat sales to fall in the second half of this year as shutdowns hammer restaurants and other food outlets.

J. Crew files for bankruptcy as preppy retailer succumbs to COVID-19 fallout

J. Crew Group Inc filed for bankruptcy protection on Monday with a plan to hand over control to lenders, adding to a list of brick-and-mortar retailers pushed to the brink by widespread store closures in response to the COVID-19 pandemic.

Oil falls on renewed U.S.-China tensions, global glut

Oil prices fell on Monday on worries that a global oil glut may persist even as coronavirus pandemic lockdowns start to ease and amid a fresh spat between the United States and China over the origin of the virus.

Telefonica shares rise on O2-Virgin Media merger talks

Shares in Spain’s Telefonica SA rose on Monday to post the only strong gains on an otherwise almost entirely red Madrid index, after the company confirmed it was in talks with billionaire John Malone’s Liberty Global Plc over a possible merger of their respective businesses in Britain.

Factbox: Connecting Britons: Major telecom players in the UK

Telefonica is in talks with billionaire John Malone’s Liberty Global to explore a merger of its British mobile operator O2 with Liberty’s Virgin Media cable network company, the Spanish company said on Monday.

Futures hit by U.S.-China tension; airlines tumble as Berkshire pulls away

U.S. stock index futures retreated on Monday after a fresh spat between Washington and Beijing over the origin of the novel coronavirus, while airlines slumped as Berkshire Hathaway dumped its holdings in the sector.

‘Like watching a train wreck’: The coronavirus effect on North Dakota shale oilfields

Oil executive Bill Kent was with fellow managers in the Colorado board room of Resource Energy headquarters on April 20 when benchmark U.S. crude prices collapsed to minus $37 a barrel. Sitting six feet apart because of the coronavirus, they knew the pandemic was not only a personal matter.

Ferrari cuts FY guidance due to coronavirus, sees slight drop in core profit

Ferrari said on Monday it had cut its core profit estimates for the year to reflect the impact of the coronavirus crisis, expected to mainly affect second-quarter results.

‘Economic Fallout Accelerated’ - Hong Kong Records Worst Contraction In History Â

‘Economic Fallout Accelerated’ - Hong Kong Records Worst Contraction In History Â

Hong Kong’s economy in the first quarter suffered its deepest annual contraction on record, plunging 8.9% YoY as the coronavirus pandemic dealt a heavy blow to business activity in the city, already suffering from a collapse in tourism and retail industries due to months of anti-government protests in late 2019.Â

The Census and Statistics Department published 1Q GDP figures on Monday, revealing a decline in YoY growth trend for the third consecutive quarter. Preliminary data showed the 8.9% print was worst than 3Q98 when GDP plunged 8.3% during the Asian financial crisis, reported South China Morning Post. The final print is expected in late May.

Spain’s Push To Extend Lockdown Sparks Political Standoff As Global Coronavirus Deaths Decline For 5th Day: Live Updates

Spain’s Push To Extend Lockdown Sparks Political Standoff As Global Coronavirus Deaths Decline For 5th Day: Live Updates

Summary:

Deaths decline for 5th day

Japan extends state of emergency

Spanish opposition threatens to torpedo vote to extend lockdown

Iran to allow Friday prayers

UK defense secretary says China owes the world ‘an explanation’

*Â Â Â Â *Â Â Â Â *

As most of the US and most of Europe start yet another week under lockdown, the FT reports that the rate of global coronavirus deaths slowed for the fifth straight day: The worldwide single-day total of deaths reported yesterday (typically, those deaths occurred during the prior 24 hour period) hit 3,481, falling for the fifth day in a row.

Sunday’s total represents the smallest daily increase in deaths since the end of March, reflecting trends seen in New York, the UK, Italy and elsewhere on Sunday.

Why Assets Will Crash

Why Assets Will Crash

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is how it happens that boats that were once worth tens of thousands of dollars are set adrift by owners who can no longer afford to pay slip fees.

The increasing concentration of the ownership of wealth/assets in the top 10% has an under-appreciated consequence: when only the top 10% can afford to buy assets, that unleashes an almost karmic payback for the narrowing of ownership, a.k.a. soaring wealth and income inequality:Â assets crash.

Most of you are aware that the bottom 90% own very little other than their labor (tradeable only in full employment) and modest amounts of home equity that are highly vulnerable to a collapse of the housing bubble. (The same can be said of China’s middle class, only more so, as 75% of China’s household wealth is in real estate, more than double the percentage of wealth held in housing in U.S. households.)

Global Stocks Tumble On Renewed US-China Tensions; US Airlines Plunge On Buffett Exit

Global Stocks Tumble On Renewed US-China Tensions; US Airlines Plunge On Buffett Exit

US equity futures, European stock markets and oil prices all fell on Monday as an escalating war of words between top U.S. officials and China over the origin of the coronavirus fuelled fears of a new trade war, derailing a rebound in global markets, while Buffett’s admission he had liquidated all his airline stocks sent the sector tumbling.

European shares – which were closed on Friday – slumped 2.5% in mid-morning trading, catching up to the Friday drop in the US with sectors sensitive to economic growth including oil and gas, automakers and banks falling between about 4% and 5.5%. Volatility gauges for European and American blue-chip stocks shot up to a two-week high while U.S. stock futures were about 1% in the red.

India offers land twice Luxembourg’s size to firms leaving China

India offers land twice Luxembourg’s size to firms leaving ChinaLand has been one of the biggest impediments for companies looking to invest in India.

Ambani plans a coup amid the lockdown

Ambani plans a coup amid the lockdownJioMart is ramping up operations, intensifying the grocery wars through WhatsApp.

The gorilla in India’s coronavirus war room

The gorilla in India’s coronavirus war roomA fresh surge in bad debt could hit growth and delay India’s recovery from the pandemic.

Tax Guy: Watch out for this red flag if you take cash out of your IRA under the CARES Act

You can now take up to $100,000 out of your IRA and pay it back within three years with no tax hit. But there can be tax consequences in the interim.

With a second wave of coronavirus in the fall, there could be one big problem for workers who get laid off again

The CARES Act’s $600-a-week boost expires at the end of July.

Economic Preview: Millions of layoffs set to push unemployment rate to highest level since Great Depression

Unemployment in the U.S. this year might not match the 25% peak during the Great Depression of the 1930s, but it could come pretty close.