• Warren Buffett dumps airlines shares
• President Trump revives trade war concerns
European indices finished sharply lower today amid growing tensions between the US and China over the coronavirus pandemic. US President Donald Trump's threat last week to impose new tariffs on China over the coronavirus pandemic, while US Secretary of State Pompeo said that there was a significant amount of evidence the virus began in a laboratory in Wuhan. PMI readings showed that the manufacturing activity shrinks across Europe, even as major countries started to gradually ease coronavirus-related lockdowns. Construction and manufacturing companies will return to business in Italy and some schools will reopen in Germany. DAX 30 fell 3.6% CAC 40 lost 4.2 % and FTSE 100 finished 0.2% lower.
The S&P 500 and Dow Jones are trading lower, however the declines seem to be small compared to their European counterparts. Aside from the negative news regarding rising tensions between Washington and Beijing, investor's sentiment has been worsened by information that Warren Buffet sold its entire stake in the four largest U.S. airlines – Delta (DAL.US), American (AAL.US), United (UAL.US), and Southwest (LUV.US), saying "the world has changed" for the industry. The S&P 1500 airlines sub-index <.SPCOMAIR> dropped 5.1% and was on track for its worst day more than a month. Berkshire Hathaway, whose Chairman and CEO is Warren Buffett, also recorded a record loss of $50 billion, and the company's shares fell by 2%, which put pressure on the entire financial sector.
Tyson Foods Inc (TSN.US) shares plunged 7.5% after the company announced that it would temporarily shut down plants as needed and expects meat sales will decline in the third and fourth quarter due to the negative impact of the pandemic on restaurants and other food outlets.
US factory orders, dropped over 10% in March, however this reading did not shake the markets. It seems that investors are focusing on US labor market data which will be published at the end of the week. During today’s session Dow Jones lost 0.61%, S&P500 fell 0.25% and NASDAQ rose 0.50%.
Gold prices rose today as the potential escalation of trade wars continued to support safe-haven assets. Spot gold was up 0.3% at $1,706.18 /oz. Silver futures are testing support at $14.80 level and are still down 0.4% from Friday’s close. Platinum futures rose 0.5% at $777.75/oz.
GOLD - after an unsuccessful attempt to break through resistance level at $1747.39/oz and an upward trend line, the gold price pulled back and found support at $ 1700/ oz, which is additionally strengthened by 50MA (green line). If current risk –off sentiment prevails then gold may re-test the aforementioned resistance level. On the other hand, once sellers regain control, the support at 1.661.32 / oz may be at risk. Source: xStation5The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
