Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Covid-19 Surge; Turkey Turmoil, GameStop Earnings - What's up in Markets

EconomyMar 22, 2021 06:22AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Geoffrey Smith

Investing.com -- Rising Covid-19 cases in Europe, India and South America stoke fears about a delay to the global economic recovery, despite AstraZeneca publishing upbeat results from a major trial of its vaccine in North and South America. Turkey's currency and stock market tumble after President Erdogan fires his central bank chief for raising interest rates too sharply; Gamestop reports earnings; there's a big railroad merger in the works, and Saudi Aramco is borrowing heavily to defend its $75 billion dividend. Here's what you need to know in financial markets on Monday, March 22nd.

1. U.S. trial results vindicate AstraZeneca as European vaccine dispute deepens

AstraZeneca (LON:AZN) cleared a major hurdle in getting its vaccine authorized in the U.S., as the U.K. and EU moved closer to blocking exports of vaccines to each other.

The U.K.-Swedish company said its vaccine was 79% effective in stopping symptomatic Covid-19 and 100% effective in preventing death and hospitalization, in a trial that covered over 32,000 volunteers in the U.S. The test results also showed no issues with blood clotting disorders, concerns over which had led many EU countries to suspend distribution of the vaccine earlier this month.

The news comes on a day when Europe’s largest economy, Germany, is set to join France in tightening and extending lockdown restrictions through the middle of April in response to a surge in new infections in the last two weeks.

Outside Europe, India reported its highest daily death count in over two months, while new infections hit an all-time record in Brazil and Chile. There were also signs of hiccups in the U.S.’s reopening, with fights among massive crowds of Spring Break tourists that led Miami Beach to declare a state of emergency.

2. Third time lucky for CPR

Canadian Pacific (NYSE:CP) finally succeeded in persuading a U.S. railroad operator to merge with it and create the first railroad operator to link all three major markets in North America.

CPR and Kansas City Southern (NYSE:KSU) said they had agreed to a deal valuing KCS’s debt and equity at around $25 billion. The merger will still need antitrust clearance. KCS had rejected a $20 billion bid from Blackstone (NYSE:BX) and Global Infrastructure Partners in September.

Blackstone was on the acquisition trail elsewhere at the weekend, proposing to buy trouble Australian casino operator Crown Resorts (ASX:CWNHB) for $6.2 billion in a deal that would offer shareholders in Crown an exit from a company beset by money-laundering allegations.

Semiconductor stocks will also be in focus after a fire at a factory owned by Japan's Renesas Electronics (T:6723), which threatens to aggravate the current shortage of chips worldwide.

3. Stocks set to open mostly lower; GameStop earnings eyed

The bad news on the Covid-19 front has given an extra leg to the rebound in tech stocks and a setback to cyclicals, as markets around the world reprice their reopening bets. Yields on 10 year U.S. Treasuries meanwhile fell back to 1.68% by 6:10 AM ET (1010 GMT)

Dow Jones futures were consequently underperforming in premarket trade, falling 85 points, or 0.3%, while S&P 500 futures were down 0.1%. Nasdaq 100 futures were by contrast 0.5% higher.

Other stocks likely to be in focus later include GameStop (NYSE:GME), which is due to report earnings for the three months through January – the first update since the epic short-squeeze earlier in the year. Analysts expect a profit of $88 million, or $1.35 a share, on $2.2 billion in revenue.

Also in focus will be Tesla (NASDAQ:TSLA), whose biggest fund manager cheerleader Cathie Wood put out a new target price of $3,000 by 2025 at the weekend. Existing home sales data for February are also due, while the Federal Reserve's Randy Quarles, Mary Daly and Michelle Bowman all speak later.

4. Turkey in turmoil

Turkish financial markets went into meltdown mode after President Recep Tayyip Erdogan fired his central bank chief, Naci Agbul at the weekend, only two days after he raised interest rates by more than expected.

Erdogan’s intervention revived fears of a return to the previous economic policy that tolerated a sharp currency devaluation and raging inflation. Erdogan had appointed Naci Agbal last year in what had seemed a decisive return to more orthodox economic policies.

The dollar rose by more than 10% against the lira in early trading but retraced to be up ‘only’ 9.8% by 6:10 AM ET after government officials downplayed suggestions that the country will impose capital controls to support the currency.

The benchmark BIST 100 stock index also fell 9.2% while the yield on Turkey’s 10 year government debt soared to over 16%, its highest since 2019.

5. Aramco defends dividend, at a price

Saudi Aramco (SE:2222), the world’s biggest oil company, said it would keep its dividend payment at $75 billion for 2020, despite a sharp drop in profits due to the pandemic.

The decision says less about the outlook for the global oil industry than it does for the Saudi budget, which relies on Aramco’s dividend for most of its resources. Free cash flow fell to $49 billion, meaning that the company will have to borrow to cover the shortfall.

Crude prices were choppy on Monday as doubts about the summer tourism season in the northern hemisphere intensified. U.S. crude futures were flat at $61.45 a barrel, while Brent crude futures were up 0.1% at $64.59 a barrel.

Covid-19 Surge; Turkey Turmoil, GameStop Earnings - What's up in Markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (8)
Jon Bal
Jon Bal Mar 23, 2021 6:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
dont they know how to create digital currency and ramp up their bond buying program?
Kelly Mayer
Kelly Mayer Mar 22, 2021 9:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Covid is on record low deaths in some EU countries like the UK and Portugal. The EU is not 1 country you know..
Dave Jones
Dave Jones Mar 22, 2021 9:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
UK is not EU. But it's still Europe
Max Woods
Max Woods Mar 22, 2021 9:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Be afraid, be very afraid. But for real, keep some cash ready for a dip. may get worse before it gets better.
William Smith
William Smith Mar 22, 2021 9:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
China's plan of releasing their biological weapon on the world is certainly succeeding.
Star Boi
Star Boi Mar 22, 2021 9:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sponsored by Fear, we hear you, we reap you. :P Ever wonder how you can take a loss making asset like news and make it profitable? Sell more lies! Controversy, outrage, FEAR! lol
Chris Sundo
Chris Sundo Mar 22, 2021 9:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The financial news of the US must be among the worst in the free world
Jose Mibaresh
Jose Mibaresh Mar 22, 2021 8:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
more fear!
Arsimi Hyseni
Arsimi Hyseni Mar 22, 2021 7:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
jes
Angel Keskinev
Angel Keskinev Mar 22, 2021 7:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
are you me sponsor
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email