After a shorter trading week markets returned on Tuesday with several key points still undecided. As the COVID-19 crisis grew in the middle to latter part of March, many countries worldwide were forced to impose strict lockdowns as a result.
These lockdowns were around 3 – 4 weeks with many of them now up, will nations choose to extend this? With all these recent points of uncertainty, US stock and index markets have continued to rise, many believe this due to the FED backing the economy. However with this week seeing earnings season commence for Q1 will we see better or worse than expected company profit figures, and how could this impact share prices?
A lot of unanswered questions, and a lot to unpack, so we will preview what is to come this week below.
OPEC’s Oil Discussion
The big headline news last week was the meeting of OPEC+, with Russia and Saudi Arabia, the two powerhouse producers set to discuss ways of rescuing the Oil market. The discussion was centered around coming to an agreement on production cuts. Hoping that less supply would boost demand. A draft agreement was indeed struck, however there was a blocker to the deal with Mexico, not fully committed to the initial plan. However it was finally sealed on Sunday, with the US helping to iron out any issues which existed between the 2 countries.
The deal, which is an historic one will see 23 countries joining forces and committing to holding back around 9.7 million barrels per day from markets. Although the deal has been now agreed, Oil prices continued to fall, and now trade at $22 per barrel. This fall is being attributed to the fact that Saudi Aramco has pressed forward with offering Oil at discounted prices to markets for a second month running.
COVID-19 Lockdowns to continue?
Sunday was not only historic for the Oil deal, but also what we saw happen with France deciding to extend their lockdown till the 11th May. Whilst also keeping restaurants and bars closed till June. This move came with France now 4th, only behind Spain, Italy and the US in nations with the most infections.
Like France, the UK now has a similar decision to make. Over the weekend the amount of dead now well over 11,000, and the “peak” still not reached, an extension into May could soon follow.
Dominic Raab who has been deputizing for Prime Minister Boris Johnson, who has been recovering from the virus stated on Monday that, “ We are doing a lot of work in government to be guided by the science and the medical advice that you get and I think that, until you have got that evidence, we will be getting ahead of ourselves. There will come a time in the future where we can talk about relaxation or transition but we are not there now.”
Many now expect that news of an extension could be on the way this week. With the UK still behind other countries highly impacted, a potential extension of lockdown measures may see people told to stay at home for another month.