The Covid-19 | 03 April 2020

#WTI:

Activity in the oil and gas sector declined significantly in first quarter 2020, according to oil and gas executives responding. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—plunged from -4.2 in the fourth quarter to -50.9 in the first, the lowest reading in the survey’s four-year history and indicative of significant contraction. Exploration and production and oilfield services firms both saw large decreases. The index for capital expenditures dropped from 9.1 in the fourth quarter to -49.0 in the first quarter, indicating a reduction in capital spending among firms.

Trading recommendation: Sell 22.60 and take profit 20.00

#SP500:

The University of Michigan's Consumer Sentiment Index fell to a reading of 89.1 this month, the lowest level since October 2016. It was the largest monthly drop in the index since October 2008, during the height of the financial crisis. A measure of consumers' perceptions of current economic conditions dropped to 103.7 this month from a reading of 114.8 in February. The survey's gauge of consumer expectations tumbled to reading of 79.7 from 92.1 in February. The highly contagious virus, which causes a respiratory illness called COVID-19, is wreaking havoc on the economy. The United States now has the most coronavirus cases in the world, with more than 125,000. Governors in more than half of the nation's 50 states have ordered residents to stay mostly indoors, affecting over 100 million people.

Trading recommendation: Sell 2600 and take profit 2500

#HSI:

The Chinese city of Wuhan, where the coronavirus COVID-19 outbreak first emerged, began lifting a two-month lockdown. This is a positive factor for the China stock market. Wuhan accounts for about 60% of China's coronavirus cases, but they have fallen sharply in recent weeks, a sign that the measures are working. The last confirmed locally transmitted case of the virus in Wuhan was on Monday. China suspended the entry of foreign nationals with valid Chinese visas and residence permits. This is additional insurance.

Trading recommendation: Buy 23100 and take profit 23550.