Strong general falls in the airline sector on Monday due to the spread of the coronavirus in Italy. According to Morgan Stanley data, 70-100% of the European airlines profits are made in the period from April to September, so a fall in demand or flight cancellations can have a strong negative impact.
Equity markets tumbled worldwide following the wide spread of the coronavirus epidemic beyond China. European stocks dropped most since 2016, with Italy’s MIB index dropping 5.43%, while the declines were more contained in Asia. Elsewhere, implied volatility increased further (VIX 23+6 points).
The current economic expansion now more than 10 years old, long by historical standards, as well as signs of overleverage in the corporate sector, combined with geopolitical uncertainty, suggest the next recession is not far off. According to a new study by Bain & Company, Beyond the Downturn: Recession Strategies to Take the Lead, companies that were well prepared emerged victorious from previous crises. These companies managed to survive, controlling costs and at the same time reinvesting in growth.
Misheck Mutize via The Conversation | There is renewed concern about the sustainability of rising debt levels in many African countries. Much of this debt is being incurred through foreign currency denominated Eurobonds issued on international financial markets. The total value of Eurobonds issued between 2018 and 2019 was more than the value of all bonds sold between 2003 to 2016.
Manuel Moreno Capa | From a practical point of view for the investor, Tesla is not really a car company. As opposed to selling cars, what it actually sells are expectations, future, potential. More or less the same as what many “dotcom” firms sold. That’s why its stock price is so crazy. But if at some point it became a simple car manufacturer, it would end up being valued as rigorously as the rest of the sector, irrespective of how advanced its models were.
BBVA Research / U.S. stock exchanges reopened after President’s Day holidays, in an environment where markets traded in a risk–off mood fashion. Apple Announced forecasts for 1Q20 sales are not going to fulfill expectations amid coronavirus impact, while its share value dropped 2.13 %. Furthermore, HSBC also warned about the impact of the coronavirus on its Asia business. In this context, investors sought shelter in safe-haven assets, while equities halted…
Investors worldwide are trembling at the epidemic that is currently crippling China. With good reason? This is a guest commentary by Frank Sieren. The best-selling author has lived in Beijing since 1994 and reports exclusively from China for Flossbach von Storch AG.
Europe’s tech sector has long been overshadowed by the “superstar” tech firms in the US and Asia. Arguably no tech stock in Europe is a household name, certainly not one with the instant recognition of Apple, Samsung, Microsoft or Google. Nokia once came close when it was famed for its handsets. It lives on, albeit as a less conspicuous networks provider.
Unigestión | Whether it is called QE or not, buying bills (swapping reserves for short-term bonds), injecting liquidity into the market place and growing the balance sheet affects risky assets. Market conditioning (the Pavlovian effect) since the GFC is that stock markets cannot go down when the Fed is growing the balance sheet. Additionally, the Fed’s extremely aggressive response to the repo blowout in September is another signal to markets that it has a very low tolerance for market fluctuations.
Growing concerns from US and European investors and regulators over the sustainability of integrated oil and gas companies’ business models have brought forward their potential impact on the sector’s credit quality to the medium from long term. Scope Ratings says the near-term, 2020 credit outlook for the integrated oil & gas sector remains stable.