Wall Street opens slightly down, with the Dow Jones at -0.57% and the S&P 500 at -0.17%, on the testimony of Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin at a US Senate commission on the $ 2 trillion aid package to support the American economy. Powell confirmed that the Fed is committed to using all the tools at its disposal to support the economy in this difficult time, adding that the central bank’s actions are however only part of the biggest response to the coronavirus emergency. Mnuchin stressed that the Trump administration is committed to providing the necessary support to help people get through this moment.
The latest tensions between the US and China also influence the market trend. President Donald Trump shared a letter on Twitter sent to WHO director Tedros Adhanom Ghebreyesus in which he threatens to suspend American funding and to reconsider the participation of the United States in the Organization if there are no “significant improvements” within 30 days. “The only way for the WHO to move forward is to demonstrate its independence from China,” reads the letter in which Trump also returns to accuse Beijing of managing the emergency. Chinese Foreign Ministry spokesman Zhao Lijian replied that “Donald Trump’s letter deceives public opinion and muds China.”
After a positive start on the news that France and Germany have reached an agreement on the creation of a € 500 billion Recovery Fund for the recovery of Europe, the European stock exchanges change direction. In Milan the Ftse Mib drops by 2.4%, in Frankfurt the Dax marks -0.65%, in Paris the Cac 40 loses 2.56% while in London the Ftse100 drops 1.28%. The spread between BTP and German Bund is around 210 points thanks also to the boom in requests for the new BTP Italy. The stock exchanges cancel some of the gains registered yesterday in the wake of optimism for a possible coronavirus vaccine, after the Boston company, Moderna, announced that the results of the first human trial are positive.
On the data front, the car market in Europe recorded a 78.3% drop in April due to the coronavirus emergency. Specifically, new registrations in the European Union, and in the EFTA and Great Britain countries fell to 292,182 from 1.355 million units.
In Britain, the number of people applying for unemployment benefits increased 69.1% in April from more than 2 million units in the previous month. In Germany, investor morale is on the rise again, with the Zew index flying to 51 points in May from 28.2 points in April.
Asian stock exchanges end the session positively. In Tokyo, the Nikkei 225 rises 1.49%, despite the confirmation that industrial production in Japan has fallen by 3.7% in March compared to the previous month. In Seoul the Kospi rises by 2.25%, in Hong Kong the Hang Seng index increases by 1.97%, in Shanghai the Composite marks + 0.81% and in Sydney the Asx 200 rises by 1.81% . Oil prices continue to recover with WTI at $ 32 a barrel and Brent at $ 35 a barrel.