* A look at the day ahead from Senior Correspondent, EMEA
Markets,
Dhara Ranasinghe. The views expressed are her own.
LONDON, March 27 (Reuters) - Interactive graphic on global
coronavirus spread:
https://tmsnrt.rs/3aIRuz7
We are in a world where luxury perfumiers and haute couture
houses are switching to producing sanitising gel, facemasks and
medical overalls -- Italy's Armani being the latest to make that
announcement.
Still, after weeks of pain and volatility, world markets
were looking set for a calm, even upbeat end of the work week.
Wall Street has enjoyed three straight days of gains, with the
S&P 500 set for its biggest weekly jump since 1974, with
a rise of 14% so far. European shares are on track for their
best week since 2008 and in Asia, Japan's blue-chip
index just logged its biggest weekly gain on record.
But despite a G20 pledge today to inject over $5 trillion
into the global economy and more emergency interest rate cuts
(India slashed its main rates by 75 basis points), the mood
seems a bit hesitant. Markets in Britain, France and Spain are
all down more than 2% and S&P 500 futures are down some 1.3%.
The dollar has inched up (though on track for its biggest weekly
fall in a decade.
Maybe not unsurprising given the astonishing gains of recent
days. And bull markets can occur within bear markets. So this
week's market gains could evaporate as quickly as they
materialised.
For one, the coronavirus headlines remain disturbing. The
United States is now the country with the most coronavirus
cases, surpassing China and Italy. On the corporate front, aside
from headlines about premium luxury houses switching production
lines, there are signs of stress -- carmaker Daimler seeking a
credit facility of at least 10 billion euros to cope with the
outbreak and Nestle pledging to pay full salaries to employees
affected by work stoppages for a minimum of three months.
Singapore Airlines said it had secured up to $13
billion of state funding to help see it through the crisis.
Morgan Stanley, Goldman Sachs Group, Wells Fargo &
Co, Deutsche Bank, HSBC and
Citigroup have also reassured staff that job cuts are not
on the table.
And if Thursday's U.S. weekly jobless claims data was
anything to go by, there is a chance policymakers will need to
stump up even more stimulus as the coronavirus slams the brakes
on economic activity and increases healthcare spending. Profits
at China's industrial firms slumped in the two months of 2020 to
their lowest in at least a decade.
India became the latest to slash rates in an emergency move,
lowering its benchmark repo rate by 75 basis points. In the euro
zone, while the European Central Bank has made it clear it will
certainly do "whatever it takes" to shore up the economy and
prevent government borrowing costs from spiralling out of
control, politicians are wavering again, failing on Thursday to
agree on the scale of support for their economies.
Reflecting that dire economic outlook, oil is missing out on
the general world market rally this week; Brent crude is set for
a fifth straight week of losses.
DATA AND EVENTS
Fri March 27
China industrial profits
India central bank meeting
France March consumer confidence
Italy March consumer confidence
ECB’s Klaas Knot speaks
US Feb personal consumption
US Feb PCE price index
US University of Mich sentiment final – March
Fitch to review UK ratings
Moody’s to review South Africa, Hungary
(Reporting by Dhara Ranasinghe, editing by Larry King)
Tesco (TSCO)
HSBC Holdings (HSBA)
