• Major European indices finished deeply in red
• Warren Buffett dumps airlines shares
• President Trump revives trade war concerns
• 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.
Tomorrow's session looks interesting in terms of macroeconomic publications. Reserve Bank of Australia will announce rate decision in the morning but no change is expected. US ISM Non- Manufacturing PMI index for April and Trade Balance from Canada and US for March are likely to draw bigger attention. Also investors will get to know CPI figures from Switzerland. Oil Traders will be looking at weekly API Crude Oil Stocks numbers. Last but not least, a lot of US companies will release earnings tomorrow, including Walt Disney, Activision Blizzard Inc., Newmont Mining Corp., Electronic Arts Inc.
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: xStation5This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
