Asian markets are showing tentative signs of life today after the sell-everything move lower yesterday. It looks more dead cat bounce than brave new world though as Beijing’s Covid-19 situation has knocked the Ukraine/Russia war, the Federal Reserve, threats of nuclear war from Russia, and even Elon Musk and Twitter off the headlines. I can’t imagine Elon is happy about that. Nothing that a 6,000 km wide (3,728.25 miles for Americans), hashtag etched on the surface of Mars won’t cure.
Covid casts pall over China’s growth
It seems that threats to China’s growth outlook thanks to its Covid-zero policy but begun by its regulatory clampdown and the property developer leverage trainwreck, trumps all as far as financial markets are concerned. That is an entirely reasonable assumption. For over two decades, China’s growth has been as solid an investment as an AAA-rated bond. China stopped the rot in the Asian financial crisis (the 1990’s kids), by not devaluing the yuan. It became the consumer of last resort through and post the GFC. If this party is about to end as leverage, a virus and stubbornness catch up with China, it is indeed a schism, and not just for China.
Part of the problem is that the rest of the world has become addicted to China hitting a stimulate button bigger than anything you could buy in Amsterdam at the first sign of trouble. This time around, China appears to be sticking to its guns and simultaneously trying to deleverage certain sectors (property), while applying targeted stimulus to specific sectors such as SMEs, energy, agricultural production, etc, as it locks down swaths of the country and keeps borders closed to play whack-a-mole with Covid-19.
Little surprise then that news of mass testing and limited lockdowns in areas of Beijing was the straw that broke the camel’s back. Unfortunately, China is finding out what other previously Covid-zero countries have. You have to be right 100% of the time, the virus only has to get lucky once. The incipient relief rally across currencies, equities, energy, and metals that we saw in New York and early Asia is likely to run into a China growth brick wall, as news emerges that China will expand mass testing to the whole of Beijing between the 26th and 30th of April. Asian currencies, including the offshore Yuan, and equities, are showing almost no reaction to the PBOC’s overnight foreign reserve cut for China banks, or further PBOC-speak around adequate liquidity and targeted support measures.
The China growth concerns have subsumed any data releases from Asia today. South Korean Advanced Q1 GDP eased to 3.10%, slightly better than expected. Similarly, Japan’s Unemployment for March fell to 2.60%. The Japanese finance minister has been on the wires denying the US and Japan were planning joint USD/JPY intervention, while also trotting out the usual watching currency markets closely rhetoric. USD/JPY hasn’t moved.
Singapore Industrial Production later today has downside risks, and a soft print may increase pressure on the Singapore Dollar once again, suffering like the Malaysian ringgit, from its high beta to China growth. The Indonesian rupiah weakened notably yesterday, breaking out of its carefully managed multi-month range after President Jokowi announced a palm oil export ban. The government has softened Pak Jokowi’s ban today to processed oils but contained a non-too-subtle warning to the country’s food oligarchs, that if cooking oil disappeared off the shelves again, the ban would be expanded. As I mentioned yesterday, food nationalism is an existential threat to social order and inflation in 2022. The rupiah’s fall won’t be enough to bring forward Bank Indonesia’s tightening schedule, for now.
Europe’s data calendar is quiet, but the US releases a swath of data. That includes Durable Goods, S&P Case-Shiller House Prices, the House Price Index, Richmond Fed Manufacturing and Service, as well New Home Sales. Soft data will ease the Fed tightening noise, possibly supporting equities. While firm data is likely to have the opposite effect. Likely we will get a mixed bag with New Home Sales, in particular, having downside risks as mortgage interest rates soar.
With Fed speakers in pre-FOMC media lockdown, the only data that could break the markets out of its hawkish FOMC/China growth funk will be tech heavyweight earnings this week. Today we have Microsoft and Alphabet. Both should have had impressive quarters, but the real meat in the sandwich will be their 2022 outlooks going forward. Softer guidance will have stock markets back to square one once again.unemployment covid-19 stimulus equities fomc fed federal reserve home sales currencies yuan testing lockdown gdp interest rates unemployment stimulus stock markets oil singapore japan europe russia ukraine china
U.S. FDA will decide on redesigned COVID vaccines by early July
U.S. regulators plan to decide by early July on whether to change the design of COVID-19 vaccines this fall in order to combat more recent variants of…
U.S. FDA will decide on redesigned COVID vaccines by early July
June 28, 2022, 9:58 AM EDT
By Michael Erman
“The better the match of the vaccines to the circulating strain we believe may correspond to improve vaccine effectiveness, and potentially to a better durability of protection,” Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, said at a meeting of outside advisers to the regulator.
The committee is scheduled to vote on a recommendation on whether to make the change later on Tuesday.
The updated shots are likely to be redesigned to fight the Omicron variant of the coronavirus, experts say. read more The exact composition of the retooled shots and whether they also will include some of the original vaccine alongside new components will be considered at the meeting.
Pfizer Inc (PFE.N), Moderna Inc (MRNA.O) and Novavax Inc. (NVAX.O) are scheduled to present data at the meeting. All three companies have been testing versions of their vaccines updated to combat the BA.1 Omicron variant that was circulating and led to a massive surge in infections last winter.
Both Moderna and Pfizer with partner BioNTech (22UAy.DE) have said that their respective redesigned vaccines generate a better immune response against BA.1 than their current shots that were designed for the original virus that emerged from China.
They have said that their new vaccines also appear to work against the more recently circulating BA.4 and BA.5 Omicron subvariants, even though that protection is not as strong as against BA.1.
Experts also want to know if the new shots will boost protection against severe disease and death for younger, healthier people or merely offer a few months’ additional safeguard against mild infection.
Scientists who have questioned the value of booster shots for young and healthy people have said a broad campaign is not needed with an updated shot either.
Other experts have championed any additional protection new vaccines may offer.
Our Standards: The Thomson Reuters Trust Principles.
Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing
Markets opened in the green today as they rebound from Monday’s losses.
The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock…
Stock Market Today Mid-Morning Updates
On Tuesday, the Dow Jones Industrial Average is up by 270 points as it followed modest losses on Wall Street. Investors are still weighing the risks of red-hot inflation as rates continue to rise. Aside from the U.S., European Central Bank Leader Christine Lagarde downplayed recession concerns in the eurozone, already being destabilized by Russia’s war on Ukraine. She also says that her team is ready to raise rates at a faster pace if needed, in order to combat inflation.
Shares of Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) raised their dividends after passing their annual stress tests. For instance, Goldman Sachs is boosting its dividend payout by 25% to $2.50 per share. On the other hand, shares of Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are up today after China announced that it will be easing Covid-19 quarantine rules for international arrivals.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.13% today while Microsoft (NASDAQ: MSFT) is down by 0.79%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.17% while JPMorgan Chase (NYSE: JPM) is also up by 1.67%
Shares of EV leader Tesla (NASDAQ: TSLA) are up by 0.83% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are down by 0.17%. Lucid Group (NASDAQ: LCID) is down by 1.09% today as well. However, Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed today.
Dow Jones Today: U.S. Treasury Yields Inches Higher; House Price Increases Slows Down In April
Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading higher at 0.68%, 0.89%, and 0.31% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 0.28% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also up by 0.67%.
The benchmark 10-year U.S. Treasury yield currently hovers around 3.22% as the market continues to push against a bear market. Oil prices rallied for the third day today as major producers like Saudi Arabia looked unlikely to be able to boost output significantly. This comes as the West agreed to explore ways to cap the price of Russian oil. Brent crude, for instance, currently trades at around $116 per barrel.
Home prices increased slower than before in April and could be a potential sign of a cooling in prices. Diving in, prices rose by 20.4% nationally in April compared with a year earlier. This is according to the S&P CoreLogic Case-Shiller Index. For comparison, home prices increased by 20.6% year-over-year in March. Cities like Tampa, Miami, and Phoenix continue to lead the pack with the strongest price gains. Tampa home prices, for instance, are up by a whopping 35.8% year-over-year.
[Read More] Top Stock Market News For Today June 28, 2022
Trip.com Stock Gains Following Better-Than-Expected Quarterly Performance On Travel Rebound; China Covid Easing
Trip.com Group (NASDAQ: TCOM) seems to be among the top gainers in the stock market now. Evidently, TCOM stock is now up by over 14% at the opening bell today. Overall, this likely stems from the company’s latest financial update. Getting straight into it, Trip.com reported a quarterly loss per share of $0.01. Furthermore, the company’s total quarterly revenue is $649 million. For reference, consensus figures on Wall Street are a loss per share of $0.08 on revenue of $575.04 million. With these commendable results, investors looking to bet on the return of travel would be considering TCOM stock.
According to Trip.com, the company has recovering travel demand in global markets to thank for its latest quarterly performance. In particular, Trip.com highlights a bump in activity from consumers across its Europe and Asia Pacific user bases. This, the company believes, is a result of easing travel restrictions amidst countries in these regions. Moreover, Trip.com also notes that staycation-related travel in China is another notable contributor to growth for the quarter. Accordingly, its local hotel bookings are now up by 20% year-over-year.
On the whole, travel firms like Trip.com continue to thrive as consumers book their vacations. For its latest quarter, the company’s air-ticket bookings on global platforms are now up by a whopping 270% year-over-year. As mentioned earlier, this is mainly led by a rebound in demand from its European and Asian Pacific operations. Looking forward, CEO Jane sun notes that Trip.com will “remain adaptive to embrace the changing environment and be flexible with our strategies to swiftly seize growth opportunities.” With all this in mind, I could understand if TCOM stock is turning some heads in the stock market today.
Occidental Petroleum On The Rise Following Latest Berkshire Hathaway Stake Increase
Meanwhile, the likes of Occidental Petroleum (NYSE: OXY) seem to be gaining attention in the stock market now. For the most part, this is likely a result of the latest regulatory filing from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A). Namely, Berkshire disclosed a purchase of an additional 794,000 shares of Occidental. This adds up to a $44 million transaction, bringing its total stake to about 16.4%. In total, Berkshire currently holds about 153.5 million shares of OXY stock, worth $9 billion.
All in all, Buffett’s focus on Occidental would likely draw attention to the energy firm’s shares. This is apparent as OXY stock is currently gaining by over 6% in the stock market now. According to Berkshire’s filings since March, the company’s average purchase price per share of OXY stock is $53. Following this investment, Berkshire would be bolstering its position as Occidental’s largest stakeholder. In second place on this front is investment firm Vanguard with an almost 11% stake. As a result of all this, it would not surprise me to see OXY stock making the rounds in the stock market now.
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Royal Caribbean Shares Huge News on Covid Testing, Vaccine Rules
President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&A during the cruise…
President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&A during the cruise line's President's Cruise.
Being on a cruise has largely returned to the same experience it was before the pandemic. Mask requirements have been dropped, capacities have returned to normal, and social distancing requirements have been dropped.
In fact, aside from crew members still having to wear masks and some stray passengers opting to do so in certain indoor situations, there's really no sign of covid rules once you board your cruise.
Before you board, however, the pandemic still has an effect on cruising. Every passenger 12 and older must be vaccinated (and must prove so before getting on board) and all passengers must produce a negative covid test taken no more than two days before getting on the ship.
And, while covid remains a problem, the cruise industry sees some light at the end of the tunnel when it comes to pre-cruise protocols. Executives from the major cruise lines -- Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report -- have said very little about plans to drop pre-cruise testing and vaccination requirements,
Now, however, Royal Caribbean President Michael Bayley has spoken out on both issues and has given cruise fans some real answers.
When Will Covid Tests and Vaccinations Get Dropped?
The major cruise lines have largely stayed quiet about covid protocols because they remain somewhat beholden to the Centers for Disease Control (CDC). The current CDC rules are voluntary, but voluntary is sort of a relative term when it comes to the power the federal agency has over the cruise industry.
It makes sense that the industry has been cautious in commenting on when covid protocols may change, but with the end at least seeming feasible Bayley answered questions about both the end of pre-cruise testing and potentially dropping vaccination requirements during the 2022 Royal Caribbean President's Cruise on Ovation of the Seas, the Royal Caribbean Blog reported.
"I think pre-cruise testing is going to be around for another couple of months," Bayley said. "We obviously want it to go back to normal, but we're incredibly cognizant of our responsibilities to keep our crew, the communities and our guests safe."
Bayley was less hopeful about the end of vaccinations, according to the blog, which has no connection to Royal Caribbean.
"The no vaccine question is is a huge question that none of us know the answer to," he said. "I'm skeptical that's going to change in the in the real short term. Many and most of the destinations that we visit require a high degree of vaccination, and they expect our crew to be vaccinated."
Cruise Lines Covid Protocols Are Working
Covid has not gone anywhere, but the cruise industry has been very successful at controlling the impact of the virus. Bayley noted that the CDC shares some information with him about the "millions" of people who have sailed from U.S. ports over the past 12 months.
"And the number of people who died from COVID who'd sailed on ships over the past year was two," the Royal Caribbean Blog reported. "Two is terrible. But against the context of everything we've seen, that's it's truly been a remarkable success."
Vaccine requirements remain a touchy issue as some people have chosen not to be vaccinated and that means they cannot cruise. That seems unlikely to change anytime soon given the destinations Royal Caribbean visits and the CDC information which shows that the current protocols are working.cdc disease control pandemic vaccine testing social distancing
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