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Get up to date on what’s moving global markets this morning.
(Bloomberg) --
The coronavirus has now infected 1 million people across the world. Oil markets are jolted by a dubious Trump tweet. And demand for alternative data is surging as investors try to predict the pandemic’s effect on markets. Here are some of the things people in markets are talking about today.
The new coronavirus has now infected a million people across the world, a milestone reached just four months after the pathogen first surfaced in the Chinese city of Wuhan. More than 51,000 have died and 208,000 recovered in what has become the biggest global public health crisis of our time. The highly contagious virus has rapidly eclipsed all recent outbreaks in scale and size, with fewer than 20 countries in the world remaining free of reported infections. But, with some virus carriers presenting few outward signs of illness, and many countries unable or unwilling to conduct wider testing, the true number of global infections is likely higher — some say far higher — than 1 million. The U.S. now has the most officially recorded cases at more than 234,000, according to Johns Hopkins University. Next is Italy, which also has the highest death toll with almost 14,000 virus fatalities, followed by Spain. Meanwhile, China rejected yesterday’s U.S. intelligence claims that it fudged its virus numbers to downplay the extent of the contagion. Elsewhere, in India, the situation is starting to look dire: Numbers of cases are set to climb as thousands of health officials race to identify people connected to at least 10 virus hotspots across the world’s second most populous country, which finds itself at the back of the line for virus test kits. And in another setback on the testing front: Highly anticipated five-minute testing kits may actually give inaccurate results.
Asian stocks looked poised to open higher following a volatile session in the U.S., with oil producers well supported after President Donald Trump said Russia and Saudi Arabia would cut production. The S&P 500 ended close to its session highs, up 2.3%. Energy shares were the best performers, while consumer discretionary stocks lagged after jobless claims doubled from last week to 6.6 million. Futures in Japan and Australia climbed. Treasuries retreated amid a slew of corporate supply. West Texas crude gained 22%, though the advance was pared as officials from both sides watered down expectations. The dollar pushed higher and yen and euro fell.
President Donald Trump said that he had brokered a deal that would have Saudi Arabia and Russia dramatically reduce their oil production, sending prices surging. But the claim was met with immediate skepticism. Trump, who had been working the phones over the past two days after oil prices plunged to a near 20-year low, tweeted that he expected Saudi Arabia and Russia to cut output by as much as 15 million barrels. And even though Trump didn’t say the cut would be per day, markets interpreted the tweet as such. Immediately following the tweet, Saudi Arabia said it had called an “urgent meeting” of the OPEC+ alliance that includes Russia to discuss a “fair agreement,” signalling it would only cut output if others do so. One person familiar with the Trump administration’s discussions with the Saudis said there was widespread internal confusion about what the president meant by his tweet and that the figures he posted may not be reliable. Meanwhile, these are the Asian currencies set to benefit from an oil price collapse.
One hedge fund’s big short shows why demand for alt-data is surging: Before the coronavirus sent stock markets tumbling at the fastest pace since the 2008 financial crisis, Dymon Asia Capital was combining information on past outbreaks with a raft of so-called alternative data, including Google searches in the U.S. and daily readings from China on everything from road congestion to flight schedules and test-kit availability. The numbers convinced Dymon to take short positions against the S&P 500 and an index of Chinese stocks in Hong Kong, trades that would become its biggest money makers in February and March. The firm’s flagship $2 billion Dymon Asia Macro Fund has climbed about 40% this year. “It was clear the market was under-pricing the impact of Covid-19,” Danny Yong, Dymon’s chief investment officer, said. Interest in Chinese data has been particularly strong as money managers try to get an early read on efforts to contain the virus.
Another activist investor has bought a stake in SoftBank, betting the recent stock plunge makes it a bargain that’s too good to ignore. Asset Value Investors, a U.K. money manager known for its activist campaigns at smaller Japanese firms, has invested about 5 billion yen ($46.6 million) in Masayoshi Son’s company, Chief Executive Officer Joe Bauernfreund said. That comes after Elliott Management took a large position and called on SoftBank to buy back shares. SoftBank was sucked into the coronavirus sell-off, losing more than half its value from a high in mid-February before paring some of the decline. The reversal came as founder Son decided to do what investors had been urging for years — sell holdings to fund shareholder returns and pay down debt. “It’s very, very cheap,” Bauernfreund said in an interview. “It trades at a massive discount to the value of its assets. And on top of that, the planned asset disposal and buyback will be massively accretive to the net asset value.”
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- The virus is boosting rich Asian interest in the sustainable investing trend.
- Singapore's richest man makes $3.3 billion selling ventilators.
- This office worker’s epic journey home shows China isn’t normal yet.
- Hong Kong faces a troubled future after coronavirus.
- Zoom is grappling with security flaws.
- Poorer countries are least prepared for pandemic lockdown.
- This professor sees climate mayhem lurking behind the Covid-19 outbreak.
- Here are some tiny luxuries to keep you sane in dark times.
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