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Investors are buoyed by announcements of the slow reopening of the Eurozone’s largest economies. After Germany, which started its plan last week, Italy yesterday presented its reopening schedule that will begin on May 4. Tomorrow, Spain and France will present theirs. Meanwhile, in the United States, a new group of governors have announced the resumption of activities. The exception is the United Kingdom, where Prime Minister Boris Johnson resumed his work this morning (after recovering from Covid-19) and called for “patience” to avoid hasty measures.
To the expectations that the world economy will soon be operating again, was added the announcement of new stimulus measures by the Bank of Japan. The issuer promised that will buy all the bonds that are necessary, both state and business, after the declaration of a state of emergency in Japan due to the impact of the pandemic. The market is watching what the Fed and the ECB will do this week, which will deliver their monetary policy decisions on Wednesday and Thursday, respectively.
The IMF calculates figures at US $ 5 trillion the stimulus to be injected by central banks, which would add to another US $ 9 trillion in fiscal plans. The question is whether this, or the promise to “do whatever it takes” of the Fed, the ECB, the BoJ and other central banks will suffice. Markets this morning seem to believe so, because despite troubling earnings reports from large companies, we see widespread increases.
Asian stocks are up over 2.3%, the Stoxx 600 is up 1.71% and Wall Street futures are up 1% already. Copper shoots up 2.5% in London, and reaches its highest value in six weeks, according to Reuters data. The new appetite for more risk hits the dollar, falling hard against the main currencies. Oil also starts another day of losses, and already falls almost 15%.
At the company level, the scenario is not so promising. Deutsche Bank surprised with better than expected results for the first quarter, but warned of problems ahead. The profits of Adidas they fell 95% through March and the company projects 40% less sales in the second quarter. Bayer alerted to possible liquidity problems and Lufthansa he is rushing to negotiate a rescue plan with the German government. In India, the central bank came to the aid of mutual funds, with the offer of a liquidity line for US $ 6,600 million, after the decision of Franklin Templeton to close several of its funds before the exit of investors.
In Chile the mood of the private sector was hit on Friday with the announcement of Enjoy’s request to take part in a reorganization process. It is not the only company in the casino industry in trouble. Financial Diary interview with Nicolás Imschenetzky, president of Casinos Marina del Sol, who warns: “If the dates where we lose our licenses are maintained, the companies are all dead ”. Despite the crisis, the private sector seeks to increase its contribution in the emergency. Capital Magazine reveals that Sandro Solari and the CPC are working on raising a second fund private, which will now be aimed at distributing food to the most vulnerable families throughout the country.
ATTENTION TODAY:
- Andean waters It holds its shareholders’ meeting via streaming, starting at 10:00.
- The business community connects, also via streaming, from 12 noon, to discuss the impact of the pandemic on the economy and employment. They expose: Sebastián Edwards, Matías Claro and Nicolás Eyzaguirre.
- Mexico reports (07.00 hours) its unemployment rate to March, and analysts project an increase to almost 4%. A slight rise is also projected in Japan’s unemployment rate, which reports at the end of the day.
- In the region, the Brazilian Petrobras reports its results to the first quarter.
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