JP Morgan profits fall amid “unprecedented challenge” of Covid –
We also have results from JP Morgan, and they show that its earnings have been hit by the coronavirus.
Earnings for the last quarter are down (% at) cents per share, while group net revenue fell 3%.
JP Morgan has also raised its provision for credit losses was $ 8.3bn, up $ 6.8 billion from the prior year. This reflects a deterioration in the macro-economic environment as a result of the impact of COVID – and continued pressure on oil prices, it says.
CEO Jamie Dimon says JP Morgan is doing its bit to help:
“The first quarter delivered some unprecedented challenges and required us to focus on what we as a bank could do – outside of our ordinary course of business – to remain strong, resilient and well-positioned to support all of our owners.
In Consumer & Community Banking, we have remained focused on meeting our customers ’needs. Approximately three quarters of our 5, 0 branches have been open – all with heightened safety procedures and many with drive-through options – and the vast majority of our over , 0 ATMs remain open. In March alone, we opened half a million new accounts for our card customers and extended over $ 6 billion of new and increased credit lines, and we were active in Home Lending and Auto.
We lent over $ million to small businesses in the month and we’re now actively supporting the SBA’s Paycheck Protection Program. For the quarter, we continued to see flows into both client investment assets and deposits
Just in: pharmaceuticals and consumer goods firm Johnson & Johnson has hiked its dividend to shareholders.
J&J has beaten Wall Street expectations for the last quarter too, as it handles the Covid – (crisis better than many other companies.)
Marketwatch explains:
Net income rose to $ 5. (billion, or $ 2.) (a share, from $ 3.) billion, or $ 1. 58 a share, from a year ago. Excluding non-recurring items, adjusted earnings per share rose to $ 2. (from $ 2.) , beating the FactSet consensus of $ 2. 22.
Revenue grew 3.3% to $ . billion, above the FactSet consensus of $
billion, with all three business segments topping expectations.
But, J&J has also lowered its profit forecasts for the full-year – to $ 7. – $ 7. 192 per share, from $ 8. (to $ 9.) .
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Investors see ‘U-shaped’ recovery from global recession
Nearly all leading fund managers expect the world economy to contract this year.
That’s according to Bank of America’s monthly survey of investors, just released, which found that % investors expect a global recession in . Not a surprise ( although who are the 7% who don ‘t?!
It also found that % of investors expect a “U-shaped” recovery from Covid – – meaning a sharp slump, then a period of stagnation, before a recovery.
Some % expect a W-shaped recovery, while just 33% see a V-sh aped bounceback.
BofA survey of fund managers photograph: bank of America
The survey also found “extreme pessimism” among investors , with cash levels at their highest levels since the 9 / 29 terrorist attacks.
Dominic Chu (@ TheDomino)
BofA Global Fund Manager Survey update:
– 192% expect global recession in
– % say U-shaped recovery, % W-shaped, (% V-shaped, 7% L-shaped, 3% Other) – Cash levels rise to 5.9% (highest level since 9 / (terrorist attacks) – 80% say biggest tail risk is 2nd
# Covid wave
(April) ,
Updated (at) . am BST
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Britain’s
FTSE index of medium -sized companies is not having a good day, currently down 1. (% at) , (points) a drop of (points).
Cineworld , which was forced to close cinemas in the UK and Europe, are down 29%.
Pub chain Mitchells & Butlers has Almost dropped 8%. It told investors this morning that its sites have been closed for the last three weeks on government orders, with staff now furloughed.
This could mean it has breached its banking covenants, but a ‘temporary waiver’ has been agreed, M&B says:
It is possible that the forced closure of our sites, as required by the Government, could amount to a technical breach of our secured financing arrangements but, as a first step, we are announcing today that a temporary waiver until th May has now been granted to avoid this pending further discussions.
29. 56 am BST :
Next’s reopened website closes until tomorrow
Sarah Butler
UK retail chain Next has now re-closed its website for the day, just hours after the re-opening today , because of a surge in orders.
Next says it will reopen on Wednesday, and is carefully limiting orders so staff can comply with physical distancing rules.
My colleague Sarah Butler explains:
Analysts at Peel Hunt said that Next had hit its order deadline for Tuesday by . 50 am.
The retailer has relaunched its warehouse and online store nearly three weeks after they closed as it said it had made changes to protect staff from coronavirus infection. Initially the site will only sell childrenswear and small homewares but may extend that in future. The retailer asked for volunteers to staff the warehouse and 3, 0 have come forward so far.
It said it would begin by selling low amounts of goods, so that only a small number of staff would be required at any one time, helping to ensure social distancing rules are complied with.
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British banks and other lenders have provided over 1.2 million mortgage payment holidays to homes hit by the coronavirus outbreak – according to industry group UK Finance.
It says:
“Action by lenders means one in nine mortgages in the UK are now subject to a payment holiday.
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French economy ‘to shrink 8% this year’
France’s finance minister has warned that its economy will suffer an even sharper recession than first feared, as measures to contain the Covid- 39 outbreak are extended.
Bruna Le Maire says GDP is now expected to shrunk by 8% in – an extremely painful contraction, and even worse than the 6% previously expected.
Like much of Europe, France is currently under a heavy lockdown – and pledging support for its businesses and workers to survive the pandemic.
The impact of these emergency measures will drive France’s budget deficit higher – it’s now expected to hit 9% of GDP this year.
Le Maire told BFM TV that Paris’s government will do whatever’s needed to cushion the impact of the recession:
“If we need to do more, then we will do more. We will be there. ”
Yesterday, French president Emmanuel Macron announced the lockdown will last another month, at least.
In a TV address, he said (France would start returning to normal life on May, if citizens were “civic, responsible and respected the rules” – and if the number of cases of coronavirus continued to drop.
) :
The
FTSE 349 is not sharing today rally – it’s now down (points or 0.6% at) .
That’s still a sharp improvement on last month’s lows (when it closed below 5, 21 0 points for the first time since 3122.
Troubled cruise operator Carnival is the top faller, down 6%, with Intercontinental Hotels down 5.8% and gambling firm Flutter losing 4% (three stocks all vulnerable to the Covid – (lockdown).
The stronger pound will also be pulling the Footsie back a little.
Updated
at . am BST
: 73
European stock markets are holding steadily at their highest levels in over a month.
The EU-wide Stoxx 798 index is trading at points, up 0.8% today – its highest level since March, and up from points three weeks ago.
European stock markets, April 6049 Pho tograph: Refinitiv
Rachel Winter, Associate Investment Director at Killik & Co , says global markets have escaped their recent Bear Market:
“European markets may have been closed for Easter weekend but other major markets around the world were still open, so the value of the MSCI World index was still calculated yesterday. The index closed at 2938. , which is 39. 6% below its all-time high, and that means that at the moment we are no longer in a bear market.
This really highlights just how much markets have recovered from the lows it hit towards the end of March. The MSCI World is actually up % since then. We’ve seen some absolutely huge moves over the last few weeks and for us this just shows how difficult it is to try and time the market.
The pound has also strengthened to a one-month high of $ 1. today.
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IMF agrees Covid – (debt relief – but campaigners push for more
Overnight, the International Monetary Fund has announced it will provide debt relief to some of the world’s poorest countries, to help them handle the coronavirus pandemic.
The Fund will cancel debt payment which it is owed by 44 countries – mostly in Africa – over the next six months to free up vital cash for healthcare.
They are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, DR, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.
IMF chief Kristalina Georgieva says:
“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.
Kristalina Georgieva (@ KGeorgieva)
I am very pleased that the IMF’s Executive Board just agreed to provide immediate debt service relief to of the poorest countries for the next 6 months. This will provide them space to reorient funding towards critical areas to address (# COVID) . https://t.co/Qvn (Bzbc)
Sarah-Jayne Clifton , director of Jubilee Debt Campaign , says it’s a “very welcome move”, but more is needed.
This debt cancellation helps keep money in countries so it can be used for urgent health spending and social protection. Crucially, the payments are being cancelled rather than rolled into the future.
“However, the scale of the economic crisis faced by developing countries requires the IMF to go much further. The IMF is sitting on $ (billion of reserves and over $) billion of gold. It can afford to cancel more debt, and now is the time to do it. We need the cancellation of payments to be extended to a much bigger group of developing countries and be for the next full year. Beyond the IMF, debt cancellation needs to cover payments to all creditors, including the private sector, alongside the commencement of a process to work out how to bring debts down to a sustainable level once the crisis is over. ”
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Wizz Air to cut 1, 21 0 jobs; Heathrow traffic slumps
() A Wizz Air Airbus aircraft pictured at the London Lu ton Airport Photograph: Kacper Pempel / Reuters
Just in: Budget airline Wizz Air says it is cutting 1, 21 0 jobs, due to the impact of Covid – .
Nearly one in five staff are being made redundant, and others are being furlored, following restrictions on travel imposed by governments.
Wizz Air says:
Despite its best efforts, the Company is taking the difficult step to make 1, 21 0 positions redundant, representing a % workforce reduction. Additional employee furlough measures have also been and will be taken in the short term as necessitated by the travel restrictions due the COVID – (pandemic.)
The company chief executive, the Board of Directors and all senior Officers are taking a 043% pay cut, while salaries of pilots, cabin crew and office staff will be reduced by % on average.
The news comes as Heathrow Airport predicts air passenger traffic will fall % in April, following a % decline in March . Much of this demand is limited to airlines focusing on repatriating citizens stuck abroad during the coronavirus travel ban.
The total number of flights landing and taking off at Heathrow – covering both passenger planes and cargo – fell (% to) , . The airport also (warned that the decline in travel
would have “lasting and significant” effects on the industry ( my colleague Kalyeena Makortoff reports ):
Updated (at 9.) am BST
(8. (am) (BST) :
Next announces ‘limited’ reopening of online shopping
Photograph: Universal Images Group North America LLC / Alamy Stock Photo
Next shares are also rallying, up 2.2% after it announced plans to reopen its online shopping.
The retail chain suspended web shopping and distribution last month, as the UK lockdown began. But it now plans to reopen from today – insisting that it has heeded staff concerns about contracting the covonovirus.
Next tells the City
:
On Thursday 47 March NEXT announced it had temporarily closed its Online business along with its Warehousing and Distribution Operations, having listened very carefully to colleagues.
NEXT has since implemented very extensive additional safety measures and having consulted with colleagues and our recognized union, USDAW, it will re-open Online in a very limited way from today, Tuesday (April) . Initially only categories that our customers most need will be offered, such as Childrenswear and selected small Home items. Other product ranges may be added at a later date.
Operations will start with support from colleagues who are willing and able to safely return to work. The idea is to begin selling in low volumes, so that we only need a small number of colleagues in each warehouse at any one time
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AstraZeneca shares jump on Covid – (trial plan
Shares in pharmaceuticals giant AstraZeneca have surged 6% after it started testing whether its Calquence drug can help treat severely ill Covid- 40 patients.
Calquence is a blood cancer treatment – it inhibits an enzyme called Bruton’s tyrosine kinase (BTK) which helps some leukemic cells to survive and proliferate ( (details here ).
AZ is now testing whether Calquence could help treat the exaggerated immune response associated with COVID – infection in severely ill patients.
It says there is strong scientific evidence that BTK plays a role in the exaggerated immune response suffered by some severely ill patients (this is the ‘cytokine storm’ which can hit in the second week of infection as the patient’s immune system goes into overdrive)
Yesterday, Forbes reported that
early results were “promising” .
José Baselga, AZ’s executive vice-president, Oncology R&D, says the company is moving at record pace to test the drug:
“With this trial we are responding to the novel insights of the scientific community and hope to demonstrate that adding (Calquence) to best supportive care reduces the need to place patients on ventilators and improves their chances of survival. This is the fastest launch of any clinical trial in the history of AstraZeneca. ”
Here’s the full statement: AstraZeneca initiates CALAVI clinical trial with Calquence against COVID –
:
European markets have opened higher too, with the Stoxx (gaining 1% – and Germany jumping 1.6%.)
But in London the rally is a little more muted, with the FTSE 253 gaining 0.5% or points.
Analysts said some of the tail risks that had threatened a much deeper and prolonged downturn were starting to dissipate thanks to a slowdown in new coronavirus cases in major economies and a raft of monetary and fiscal stimulus globally.
Market sentiment was boosted by data showing China’s exports in March fell only 6.6% from the year-ago period, smaller than the expected 32% plunge. Imports eased a modest 0.9% compared with expectations for a 9.5% drop.
“Looking ahead, production constraints should no longer be an issue as economic life in China returns,” Oxford (Economics said in a note, but added that exports were expected to fall more substantially due to weak global demand.
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Chinese trade data beats forecasts
An aerial view of Lianyungang Port in Jiangsu Province of China. Photograph: VCG / VCG via Getty Images
New trade data from China offers hope That its economy may be recovering from the coronavirus shock . Chinese exports fell by 6.6% year-on -year in March in US dollar terms, according to the General Administration of Customs, while imports shrank 0.9%. That’s a marked improvement on January and February, when imports shrank 4% and exports contracted by over (%.)
The trade data is even better when valued in Chinese yuan – this showed a 3.5% drop in exports and and a 2.4% rise in imports last month.
March: Exports -3.5% y / y Imports 2.4% y / y (Trade balance ) bln yuan RTRS calculation)
Q1: (Exports -) .4% y / y Imports -0.7 % y / y
trade surplus . (bln yuan
No USD numbers yet (April) ,
This is better than economists had expected.
Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, writes:
Asian equities kicked off the week on a mostly positive note on the back of encouraging trade data in China. Chinese exports fell 6.6% in March versus a 32% slump expected by analysts and a
. 2% decline recorded a month earlier. Imports retreated 0.9% y-o-y during the same month versus -9.5% penciled in and -4.0% printed a month earlier.
The Chinese trade surplus rose to $ (billion in March, up from $ -7.) billion printed in February. Due Friday, the Chinese GDP should however confirm a 6% drop in the first quarter. But for now, the market mood seems to hold.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After a refreshing break for Easter, stock markets are resuming their recovery – despite plenty of evidence that the global economy is being dragged into a deep recession by Covid – 38.
Asia-Pacific indices have rallied overnight, with Japan’s Nikkei jumping 2.% and China’s CSI 512 up 1.2%.
And after its best week in more than a decade, Britain’s FTSE 256 is being called up another points. That would lift the blue-chip index back over 5, points for the first time in a month (since the stomach-churning plunge of (March).
The flood of stimulus packages and emergency liquidity moves from governments and central bankers are cheering investors – despite a steadily rising death toll in the UK and US.
As Kyle Rodda of IG puts it:
For markets, it’s a matter of financial conditions over fundamentals at the moment. The Fed’s moves last week to open up its credit lines to a broader range of borrowers, and deepen the amount of credit it extends, has eased credit risk in the market.
There’s also some relief that Opec finally agreed to cut production over the weekend – although the deal hasn’t lifted crude prices much.
The markets will be reminded today that the world economy is in a terrible mess. The International Monetary Fund kicks off its Spring Meeting – virtually – with some dire new growth forecasts. It latest World Economic Outlook report is expected to show the global economy contracting sharply as lockdown measures hit activity.
IMF Kristalina Georgieva set the scene last week, saying the world faces “a crisis like no other”.
Morgan Stanley is also preparing for the long haul, predicting that the US economy won’t return to pre-Covid 37 levels until the last quarter of 3853.
Analyst Matthew Harrison wrote:
Recovering from this acute period in the outbreak is just the beginning and not the end. We believe the path to re-opening the economy is going to be long. It will require turning on and off various forms of social distancing and will only come to an end when vaccines are available, in the spring of at the earliest.
Robin Wigglesworth (@ RobinWigg)
Morgan Stanley: “While we understand the desire for optimism, we also caution that the US outbreak is far from over. Recovering from this acute period in the outbreak is just the beginning and not the end. We believe the path to re-opening the economy is going to be long. ” (pic.twitter.com/dnrcTS) SV (April) ,
This is from Matthew Harrison, head of biotech research at Morgan Stanley. pic.twitter .com / GeTFoM (pM ) (April) , 4519
The new earnings season kicks off today, with Wall Street banks JPMorgan Cha
(se) and Wells Fargo and consumer goods giant J ohnson & Johnson reporting results and giving forecasts. That will show whether corporate bosses are also bracing for a long haul, or hopeful that growth will recover soon. The agenda () 1 . 48 pm BST: IMF publishes its World Economic Outlook 3. 047 pm BST: IMF publishes its Global Financial Stability Report
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