5 BIG market changes on Tuesday, May 12
Markets are keeping an eye on a number of large developments on May 12. Traders are tracking political discussions, forex and oil dynamic and a reopening of one of the world’s most famous companies. Here is the rundown of five biggest events for the day.
US Senate is preparing to hear the reports of leading health officials on the possible consequences of reopening the national economy. The hearing will include the testimony of Anthony Fauci, who is considered to be the leading specialist on viruses.
The daily death toll in the United States has been falling for a fourth day straight. Yesterday it was only 837 - noticeably lower than earlier. The number of new cases per day is also going down.
The sentiment of readiness has been further reinforced by President Trump’s statement that “we have prevailed” in enhancing the national testing system.
Despite the economic reopenings around the world, global markets are on edge as the news about the possible second wave of the pandemic appeared. New cases were registered in Wuhan, where the pandemic reportedly originated. The quarantine in the city has recently been cancelled.
According to the Robert Koch Institute’s data, the virus is picking up speed again. Only last week the r0 rate, which measures the spread of the virus, dropped to 0.65, meaning that the infection is dying off/ Now it rebounded to 1.1.
In Russia, the pandemic is still rampant with over 10000 new cases registered daily. Nevertheless, President Putin proclaimed that containment measures will soon be cancelled - the leader’s approvement ratings crashed during the quarantine.
Despite negative impulses, US stocks are headed for gains, albeit modest ones. By 10:30 GMT the Dow Jones 30 Futures contract lost 0.2% - 57 points/ S&P 500 and Nasdaq both gained.
The US dollar is gaining as well. The Federal Reserve stated that negative rates are very unlikely and called it a “weak tool”.
Ignoring the state orders, Elon Musk decided to open Tesla facility in Fremont. He demonstrated his disappointment with a forced closure of the factory even while the restrictions on manufacturing activity are being eased.
Earlier, Elon Musk tweeted that Tesla stock price was “too high”. The shares plummeted, but soon rebounded.
Oil prices continue to recover after UAE, Kuwait and Saudi Arabia announced new output cuts. The effort will take away 1.18 million barrels from the oversaturated market per day, starting June 1. The decision is supposed to help the market find new balance sooner.
Meanwhile the CEO of British Petroleum Bernard Looney stated that the pandemic’s impact on the energy market might stay for a long time, or even forever.
US crude futures gained 5.4% and reached US$25.45 per barrel. Brent gained 3.1% and reached US$30.54.