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OPEC + finalized the largest production reduction agreement in history on Sunday (12.) A total of 23 oil-producing countries agreed to reduce daily production to 9.7 million barrels between May and June.
Additionally, White House health consultant Anthony Fauci said Sunday (12) that the pneumonia epidemic in the United States is showing signs of slowing down, and economic activities are expected to reopen as soon as possible from may.
However, due to the uncertainty about the development of the epidemic, US stocks ended last week’s gains on Monday (13), and the four main opening indexes fell, of which Caterpillar fell -6.11% and dragged the Dow Jones Open General Index. Dropped over 100 points.
Wuhan pneumonia epidemic
According to Johns Hopkins University data, the cumulative number of confirmed cases in the United States is close to 550,000, deaths have exceeded 21,000, and more than 189,000 confirmed cases in New York State, the most affected area.
Furthermore, although the European epidemic remains serious, some European countries have begun to consider the gradual relaxation of closure measures. The Italian Prime Minister announced the extension of the blocking order until May 3, but some companies that have been closed since March 12 may reopen on Tuesday (14). In addition, Spanish non-core industry staff will gradually resume production activities from April 13.
OPEC + Production Reduction Agreement
The Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries held an emergency video conference on Sunday (12) and agreed to reduce daily production by 9.7 million barrels starting in May. This is the largest production cut in the history of OPEC + and represents 13% of world oil production.
Among them, Mexico will reduce daily production by 100,000 barrels, which is less than the 400,000 barrels previously forecast. But the United States reached out and promised to cut 300,000 barrels a day to make up for Mexico’s deficit.
Starting Monday, Monday (13) at 10 o’clock Taipei time:
- The Dow Jones index fell 179.85 points or -0.76%, temporarily reporting 23539.52 points
- Nasdaq fell 36.73 points or -0.45%, temporarily reported 8116.85 points
- S&P 500 fell 17.92 points or -0.64%, temporarily reported 2,771.90 points
- Fees and a half fell 12.99 points or -0.81%, temporarily reported at 1588.99 points
- TSMC ADR increased 0.77% to $ 48.71 per share
- The performance of the US Treasury. USA At 10 years it increased to 0.754%
- New York light crude rose 2.59% to $ 23.35 a barrel
- Brent crude fell 0.16% to US $ 31.43 per barrel
- Gold fell 0.96% to US $ 1,736.05 per ounce
- The US dollar index rose 0.06% to 99,567 points
Focus actions:
Caterpillar (CAT-US)
Caterpillar fell 6.11% in early operations to hit $ 117.36.
Bank of America Merrill Lynch (BofA) analyst Ross Gilardi downgraded Caterpillar’s stock rating on Monday (13), dropping from “neutral” to “outperforming,” with a price target of $ 115 per share.
Although in the past, large-scale fiscal stimulus policies, as well as the central bank’s monetary easing policy, were beneficial to the company’s stock price. However, because both energy companies and mining companies face substantial cuts in capital spending, Gilardi said it is expected to have a severe impact on the market for heavy industrial equipment manufacturing company Caterpillar.
Boeing (BA-USA)
Boeing rose 1.40% in the first operations to 154.00 USD. A
According to the Wall Street Journal, Boeing is expected to cut staff salaries by 10% due to the pneumonia epidemic plaguing the aviation industry. Boeing has a total of approximately 160,000 employees worldwide, due to severe financial pressures in the commercial aviation sector, the plan of salary reductions will apply mainly to this sector.
Due to the drastic decrease in the number of air passengers caused by the epidemic, Boeing does not currently produce any commercial aircraft. Boeing’s competitor Airbus said last week that declining global demand is expected to result in order cancellation or delivery delays, so it plans to cut commercial aircraft production by a third.
Disney (DIS-US)
Disney fell 0.37% in the first operations to US $ 104.08.
To prevent the spread of the epidemic, the Disney theme park in the USA. USA It has been closed since mid-March and announced on Sunday (12) that it will implement an unpaid leave for 43,000 employees starting April 19. Disney has also reached an agreement with the Union of the Council of Commerce of Services of EE. USA To keep paying health insurance and other benefits while employees are on vacation without pay.
Key economic data for today:
None
Wall Street Analysis:
Marc Chaikin, Executive Director of Chaikin Analytics, said that several anti-epidemic efforts adopted by various countries have gradually achieved results. However, the timetable for the reopening of economic activities and the impact of the epidemic on the economy is still unknown, so investors are urged to remain vigilant.
In addition, Chaikin also said that although the actions of EE. USA They showed an upward trend last week, with the start of the US financial reporting season. USA This week, the company’s financial performance is expected to disappoint investors again.
Goldman Sachs Group strategist David Kostin said Monday (13) that he benefited from unprecedented political support from the United States government and eased risks to the economy and financial markets. If the United States reopens its economic activities, a second wave will not occur. The infection, the possibility that the stock market reaches a new low will be greatly reduced.
Goldman Sachs Group had previously estimated that the S&P 500 index could drop to 2,000 points in the short term, but benefited from the economic stimulus policies of the Federal Reserve Board and Congress, Goldman Sachs said the probability of that this estimate occurs is quite low.
Additionally, although US companies are expected to perform poorly in the first quarter, Goldman Sachs said the company’s financial performance will not have a significant negative impact on the stock market, and maintained the estimated value of the S&P index. 500 at the end of the year at 3000 points. .
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