By Geoffrey Smith
Investing.com -- The city that never sleeps but which closed down for Covid is reopening for business. The news on the Covid front from the U.S. sunbelt is less encouraging, though, and the virus continues to spread rapidly in Latin America. Stocks are set to open moderately higher on a light day for economic and corporate news, and Apple (NASDAQ:AAPL) will host its Worldwide Developers Conference under the cloud of a new antitrust investigation. Germany's fallen fintech star Wirecard is fighting for survival. Here's what you need to know in financial markets on Monday, June 22nd.
1. New York gets back to work
Up to another 300,000 New York City residents will head back to work on Monday as the city enters phase 2 of its reopening in the wake of its battle with the Covid-19 coronavirus.
The new phase of reopening includes in-store retail, hair salons, offices, real estate, vehicle sales, rentals and leases, commercial building management and retail rental, repair and cleaning.
Mayor Bill de Blasio has approved restaurants to use sidewalks or kerbside parking spaces for outdoor dining, amid evidence that viral transmission is much lower outdoors. All establishments must still follow social distancing rules, with masks required of both staff and customers when they are within six feet of people.
New York was hit worse than any other part of the U.S. by the virus’ first wave, the worst affected region of the U.S., accounting for around one quarter of the 120,000 U.S. deaths recorded so far during the pandemic.
2. Virus recedes in Beijing, advances in LatAm and U.S. Sunbelt
New York isn’t the only place relaxing its Covid rules today. U.K. Prime Minister Boris Johnson is also expected to announce fresh measures to reopen the economy. In addition, the Chinese capital of Beijing reported only seven new cases of Covid-19 on Sunday, suggesting that its typically robust reaction to last week’s outbreak has had positive effects.
However, the virus hasn’t gone away. Brazil passed the 50,000 milestone for deaths at the weekend, while Mexico, which began reopening its economy last week, posted its second-highest daily number of new cases.
Across the U.S. ‘sun belt’ too, case numbers have continued to rise, with California, Florida and Texas all reporting over 4,000 new cases on Sunday.
At his first re-election campaign rally on Friday, President Donald Trump said he had told his aides to slow down the rate of testing for Covid-19, a comment that his aides subsequently played down as “light-hearted”.
3. Stocks set to open higher
U.S. stocks are set to open higher, with the reopening narrative dominating the second-wave fears that pushed major indices lower on Friday.
By 6:30 AM (1030 GMT), the Dow Jones 30 Futures contract was up 191 points, or 0.8%, while the S&P 500 Futures and Nasdaq 100 futures contracts were up in line.
Of interest later in the day will be Apple’s annual Worldwide Developer Conference, where the company is expected to confirm a move to make its own chips for the next generation of Mac computers. The meeting is expected to be overshadowed by a brewing dispute with app developers over the terms of access to its App Store.
The European Union last week opened an antitrust investigation into possible abuse of a dominant market position. That didn’t stop the stock hitting new all-time highs, however.
4. Wirecard fights for survival
One of Europe’s brightest tech hopes was fighting for survival on Monday after fresh disclosures about accounting fraud at the company over the weekend.
German payments company Wirecard said that some $2.1 billion of cash it had claimed to have on its balance sheet in trustee accounts in the Philippines had probably never existed.
The central bank governor of the Philippines said at the weekend that the funds had never entered the country’s payments system.
The company pulled its financial statements for the last year and warned it may have to do the same for previous years’ too. It’s still trying to persuade lenders not to terminate some $2 billion in loans, something that would likely push it into insolvency.
5. Oil consolidates as rig count hits new low
U.S. crude oil prices consolidated just below the $40 level, pausing for breath after last week’s rally amid lingering concern that a second wave of coronavirus infections could derail the recovery in oil demand.
By 6:30, U.S. crude futures were down 0.3% at $39.73 a barrel, while the global benchmark Brent was down 0.1% at $42.13 a barrel.
On Friday, oilfield services company Baker Hughes had said that the number of active oil rigs in the U.S. fell to its lowest in 11 years, strengthening perceptions of a cap on U.S. output in the near term.
Elsewhere on Monday, there were fresh indications of lingering overhang of supply, as India – one of the world’s largest importers - said it had filled its strategic petroleum reserve.