Business Maverick

Business Maverick

April 16: Five Things You Need to Know to Start Your Day

YONKERS, NEW YORK - APRIL 14: (EDITORIAL USE ONLY) Yonkers Fire Department EMTs, clothed in full personal protective equipment (PPE), assist Empress EMS EMTs to transport a patient with COVID-19 symptoms to a hospital on April 14, 2020 in Yonkers, Westchester County, New York. Different emergency services, even within the same cities, follow varying PPE protocols in responding to COVID-19 calls. Located adjacent to New York City, Westchester County is considered part of the epicenter of the coronavirus pandemic in the United States. (Photo by John Moore/Getty Images) Photographer: John Moore/Reuters

Covid-19 has now infected 2 million people around the world. Economists are predicting the scale of China's likely slump in first quarter gross domestic product data. And watchers will be waiting for a key reading of the tech market when TSMC hosts its first earnings call since the pandemic. Here are some of the things people in markets are talking about today. 

Two Million

The number of coronavirus cases has hit a new grim milestone —  2 million. Governor Andrew Cuomo ordered people in New York to start wearing masks in public, and introduced an antibody test to identify medical personnel and other essential workers who have already had the coronavirus and therefore have some immunity. The European Commission has drawn up plans for a partial lifting of restrictions, but they warned that some will remain until a vaccine or cure is found, and Germany is set to extend curbs even after new cases fell for a sixth day. India, now possibly facing its first contraction in 40 years, will lift some curbs to allow makers of information technology hardware, farmers and industries in rural areas to resume operations after April 20 as Prime Minister Narendra Modi crafts a plan to exit the world’s biggest lockdown and revive stalled economic activity. Still, India’s next problem looks like it could be convincing frightened workers to return. Indonesia, on the other hand, will bring 34 million people under partial lockdown as authorities stepped up efforts ahead of the nation’s biggest festive season next month. And a puzzling development, China’s data on symptom-free cases is showing that most people who test positive for the virus never actually get sick. Here’s how Bloomberg is mapping the spread.

Markets Slump

Asian stocks looked primed for losses after a weak session on Wall Street, as bleak retail, manufacturing and home building data added to concerns about a severe U.S. recession, with the Fed now saying the economy has contracted sharply. Treasuries surged and futures fell in Japan, Hong Kong and Australia. The S&P 500 lost more than 2% with all major sectors dropping. Financial shares slid as Goldman Sachs’s investment portfolio took a hit from the coronavirus pandemic, while Bank of America and Citigroup followed rivals in setting aside billions for loan losses. Oil plunged to the lowest in two decades amid a record collapse in U.S. fuel demand. The dollar jumped, and elsewhere, oil tumbled anew amid a record collapse in fuel demand and the biggest ever weekly increase in domestic crude supplies.

There’s Work Ahead

The scale of the recovery task facing China’s policy makers will be laid bare Friday when first quarter gross domestic product data is expected to show a  historic slump. The median forecast of economists surveyed by Bloomberg is for a 6% contraction in the first three months of the year, when the coronavirus outbreak forced an unprecedented lockdown of factories, stores and schools across the country. Bloomberg Economics warns the dive may be as deep as 11%. At the same time, the government will also release data for retail sales, fixed asset investment and industrial output for March, offering the most complete picture yet of the economic destruction since the virus outbreak. Unlike the rapid-fire policy response seen in the U.S. and Europe as the disease shuttered economies there, Chinese authorities have offered targeted support and modest monetary easing as they focused on containing the virus’s spread. The first quarter data will provide policy makers a clearer picture of what’ll be needed if they’re to meet long-term economic growth goals.

Exposed

HSBC, along with a clutch of other banks, have a combined exposure of at least $3 billion to Singapore’s beleaguered oil trader Hin Leong and talks are underway over shoring up its finances, according to people with knowledge of the matter. A group of about 10 lenders including HSBC, Singapore’s three largest banks, Standard Chartered and Deutsche Bank held a virtual meeting with the oil trader and its advisers on Tuesday, the people said, asking not to be identified because they aren’t authorized to speak publicly. Before crude’s spectacular crash due to the coronavirus crisis, it would have been almost unfathomable that a company of Hin Leong’s status could be in such a position, and now Singapore’s closely-knit oil trading community is gripped by the predicament and the potentially far-reaching impact the difficulties could have on the market and trading partners.

Tech Check

If you are wondering how the tech industry has been faring lately amid the crisis, look to Taiwan Semiconductor Manufacturing Co.’s earnings call. The firm, a supplier to tech behemoths like Apple and Huawei, is poised to give watchers a key reading of the market as it convenes its first earnings call since the virus pandemic was declared. The two main questions that analysts and investors want answered on Thursday are how orders from Apple are doing and how TSMC is navigating the risk that the U.S. will curb its sales to Huawei. While TSMC will provide first-quarter results including net income, it is the guidance for the current quarter and rest of the year that will get the most attention. Both Citigroup and Credit Suisse say they expect the company to at least temper the high expectations for sales it set in January, citing the impact of the virus. Citi said it may even “withdraw its guidance without giving a specific view” for the year. The chipmaker accounts for nearly a quarter of the Taiex gauge, which Wednesday entered a bull market by climbing 20% from its March low.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

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