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Top 5 Things to Know in the Market on Monday, May 25th

EconomyMay 25, 2020 06:35AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- Protests return to Hong Kong and the U.S. expands its blacklist of Chinese companies. German business confidence rebounds a bit but Europe's largest economy was still in recession already by March. Spain said it will open its beaches and hotels, reviving battered European travel stocks, while Hertz Global and Tuesday Morning (NASDAQ:TUES) head for the bankruptcy courts. Here's what you need to know on a holiday-thinned Monday, May 25th.

1. Hong Kong protests flare up again

Protesters took to the streets of Hong Kong in force to oppose the introduction of a new security law that they say threatens the foundations of the city’s liberties and privileges.  Police responded by using tear gas, water cannon and pepper spray to disperse the protesters, making over 100 arrests.

The demonstrations came a day after the U.S. Commerce Department added 33 more Chinese entities to a blacklist stopping U.S. firms from dealing with them. It alleged they were complicit in human rights violations in the mainly Muslim western province of Xinjiang. China expressed “strong dissatisfaction” as analysts warned of a further drift towards a new cold war between the two powers.

Chinese stocks were mixed but the dollar rose another 0.1% against the yuan in Hong Kong to over 7.15.

2. Spain tries to rescue Europe's tourist season

Signs of lockdown easing in Europe came thick and fast over the weekend, with Spain – one of the countries worst hit by the Covid-19 pandemic - announcing it would reopen its beaches and hotels to foreign tourists from July.

The news offers one of Europe’s most popular vacation destinations the chance to salvage something from a summer season that had already been largely written off. Travel and hotel stocks soared across the continent, with Spain’s biggest hotel company Melia Hotels (MC:MEL) rising by nearly a quarter.

Elsewhere, Japan also lifted its nationwide state of emergency. Italy, meanwhile, reopened most of its gyms and swimming pools. France is due to update on the next phase of reopening by the middle of the week

3. Stock markets closed for Memorial Day; Futures higher on reopening news

With the U.S., U.K., Indian and Singaporean stock markets closed for public holidays, it’s been a relatively quiet session in global stocks so far, in which the prospect of economic reopenings has battled with concern over U.S.-China tensions for the upper hand.

By 6:30 AM ET (1030 GMT) , the Dow Jones 30 futures was up 224 points or 0.9%, while the S&P 500 futures and the Nasdaq 100 futures contract were also both up 0.9%. The European benchmark Stoxx 600 was up 0.8%, while Japan’s Nikkei rose 1.7% and Korea’s KOSPI rose 1.2%.

4. German business confidence shows signs of life, despite recession

Economic indicators are also starting to show signs of life in Europe as the continent moves into the second half of a quarter that is widely expected to mark the low-point for the economy.

The closely-watched German Ifo business climate index rebounded to 79.5 in May from a record low of 74.2 in April, driven entirely by a recovery in expectations.  One company planning for better times is airline Lufthansa, which said it will ramp up services in June, aiming to have 20% of its planes flying by late June.

Businesses’ assessment of their current conditions worsened on the month, however, defying hopes for a stabilization.

Earlier, data had confirmed that Germany had met the technical definition of a recession already in the first quarter, with gross domestic product shrinking by 2.2% after a 0.1% decline in the final three months of 2019. Ifo economist Klaus Wohlrabe said the think-tank still expects a drop of more than 10% in German GDP in the second quarter.

5. Hertz files for chapter 11, Tuesday Morning may be next

 The chapter 11 drumbeat continues. Car rental firm Hertz Global Holdings (NYSE:HTZ) filed for bankruptcy protection after the close on Friday, with debts of some $19 billion.

The company, backed by activist investor Carl Icahn, had been largely unable to use its fleet of 700,000 vehicles in the past three months as anti-Coronavirus lockdowns spread across the world.

Separately, The Wall Street Journal reported that retailer Tuesday Morning intends to file for chapter 11 protection on Tuesday, joining other home-goods retailers Pier 1 (NYSE:PIR) and Art Van Furniture, as well as department stores Neiman Marcus and JC Penney (NYSE:JCP), all of whom have been forced into similar steps by the pandemic.

Top 5 Things to Know in the Market on Monday, May 25th
 

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Comments (25)
John Mars
John Mars May 26, 2020 3:24AM ET
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It will float around near highs until 2nd quarter GDP comes out at the end of July to see if we are in a recession.
Habanero Peppers
Habanero Peppers May 25, 2020 11:22PM ET
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All you need to know is stonks.
David Wang
David Wang May 25, 2020 7:43PM ET
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Contact, trust, agreement, treaty and laws are all useless when you deal with an evil regime.
Midway Eholdings
Midway Eholdings May 25, 2020 6:32PM ET
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Wow bears are STILL talking! We wont break till all is well
James Robinson
James Robinson May 25, 2020 6:00PM ET
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Rescissions are going to happen when you shut down everything for 2week to a month. the clog will clear quick once they stop scaring the other half of the people... protect the old and sick and open back up.
Aditya Aditya
Aditya Aditya May 25, 2020 6:00PM ET
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what's rescission?
Randall Wagner
Randall Wagner May 25, 2020 4:47PM ET
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How has talking the market down worked for you so far the last month?
ADAM FANNING
ADAM FANNING May 25, 2020 1:57PM ET
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S&P already hitting resistance on 1 year chart. Sentiment andnhype and comfidence in the economy opening are all the markets have going for them, when reality hits we SHOULD see another big drop, just hard to tell how much higher this hype will drive us before we reverse... wouldnt be surprised if S&P sees 2400 again
ADAM FANNING
ADAM FANNING May 25, 2020 1:57PM ET
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We need an edit button
Jeff Bauman
Jeff Bauman May 25, 2020 1:57PM ET
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It won't go much higher in the short term. Russell is in way over bought land and s&p will be over bought at around 3000. I'm going to double my short position at 3000
Wam Master
Wam Master May 25, 2020 1:57PM ET
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no such thing as over bought
Juchan Kim
Juchan Kim May 25, 2020 11:21AM ET
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Free hongkong
Ben Enriquez
Ben Enriquez May 25, 2020 9:46AM ET
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How come nobody is sharing info the the next big breakout for Tuesday?!?!? lol!!!
Jeff Bauman
Jeff Bauman May 25, 2020 9:29AM ET
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Anyone hear about how the Chinese are doing with a vaccine? They are just good at slave labor and spreading viruses.
David David
David9 May 25, 2020 9:29AM ET
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The last I heard, they are on second stage of vaccine and is getting very close.
Agostino Tsumhpawng
Agostino Tsumhpawng May 25, 2020 9:29AM ET
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David David I never heard about it
Frank Lin
Frank Lin May 25, 2020 9:29AM ET
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yet you're probably on an iPhone or Android phone with whole or multiple parts made there. including almost all of the components in your desktop or laptop you rely on trading and research everyday.Let's not forget the underwear and clothes you put on that you claim is garbage. To wear garbage, you're pulling out of the wrong bins apparently for your clothes.
Jeff Bauman
Jeff Bauman May 25, 2020 9:29AM ET
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Frank Lin yeah, we've all enjoyed the benefits of using Chinese slave labor. If you don't think supply chains are shifting then you're not very bright.
MARTIN WAX
MARTIN WAX May 25, 2020 9:29AM ET
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Don't throw out the baby with the bath water. There are some very good scientists in China. This was just published and FYI, Lancet is a very respected international journal. The manuscript  must undergo serious scrutiny in order to be accepted. An encouraging report.  https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31208-3/fulltext
emad hijazi
emad hijazi May 25, 2020 9:02AM ET
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what about the oil market ?!
siva kumar
siva kumar May 25, 2020 8:30AM ET
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God Save HongKong
Jeff Bauman
Jeff Bauman May 25, 2020 8:25AM ET
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Chinese thieves and liars
Jeremy Powell
MissRateHike May 25, 2020 8:07AM ET
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well this is all wonderful news!
Joe Lock
Joe Lock May 25, 2020 8:06AM ET
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You would think a hundred-year-old company like Hertz could survive more than 3 months.
Mike Chen
Mike Chen May 25, 2020 7:59AM ET
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Hong Kong will rise again under China’s leadership
Jeff Bauman
Jeff Bauman May 25, 2020 7:59AM ET
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Doesn't seem like your propaganda is resonating.
Trey Shenzhen
Trey Shenzhen May 25, 2020 7:59AM ET
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Hong Kong should accept China and follow Xi.
Jeff Bauman
Jeff Bauman May 25, 2020 7:59AM ET
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Mike Gollins Probably brainwashed
gonzalo contreras
gonzalo contreras May 25, 2020 7:59AM ET
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Trey Shenzhen what a terrible comment!!!
Biji Rajaku
Biji Rajaku May 25, 2020 7:33AM ET
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That's why so many people do not wish this outbreak will stop
Alexander Koh Chew Tung
Alexander Koh Chew Tung May 25, 2020 7:26AM ET
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US troublemaker
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Jeremy Powell
MissRateHike May 25, 2020 7:26AM ET
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YES
Jeff Bauman
Jeff Bauman May 25, 2020 7:26AM ET
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Chinese thieving propaganda
Jeff Bauman
Jeff Bauman May 25, 2020 7:26AM ET
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How's the Chinese vaccine research going? They can spread a virus they just don't have the brains to find a vaccine for it. 👍
Jeremy Williams
Jeremy Williams May 25, 2020 7:26AM ET
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Jeff Bauman would anyone take a chinese vaccine if they did have one?
Jeff Bauman
Jeff Bauman May 25, 2020 7:26AM ET
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good point.
Stanislav Ivanovskiy
Stanislav Ivanovskiy May 25, 2020 6:59AM ET
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So fake and ridiculous
Misael Santos
Misael Santos May 25, 2020 6:59AM ET
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What’s fake? “Economist”
Jimmy Chang
Jimmy Chang May 25, 2020 6:59AM ET
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How’s it fake? Cases and death are dropping, everything is reopening...
Jeff Bauman
Jeff Bauman May 25, 2020 6:59AM ET
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Any news from China
Stanislav Ivanovskiy
Stanislav Ivanovskiy May 25, 2020 6:59AM ET
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unfortunately my field of activity is related to the economics... It makes trading quite frustrating on these rigged markets.
SL Soon
SL Soon May 25, 2020 6:59AM ET
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Why every cold War involves the US?
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rob finch
rob finch May 25, 2020 6:59AM ET
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Actually Dean, the reason it is best to have the U.S.A. as the dominant player is because we don't boss the world around. If you don't believe me ask the people in Hong Kong.
Jeff Bauman
Jeff Bauman May 25, 2020 6:59AM ET
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Why does China lie constantly
Black Beard
Black Beard May 25, 2020 6:59AM ET
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rob finch USA is the tyrant. Soviet Union was bad but USA is about level with it now.
Kevin smarte
Kevin smarte May 25, 2020 6:59AM ET
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like the one between North and South Korea or the one between Israel and almost every Arab country okay genius
Tyler Martin
Tyler Martin May 25, 2020 6:59AM ET
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Cuz you don’t hear about the others
David David
David9 May 25, 2020 6:52AM ET
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Investing is getting very easy...no more need to look at company numbers. Just look for headlines...when you see good news or bad news, market will go up, that's it.
Joe Swindells
Joe Swindells May 25, 2020 6:52AM ET
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Hmm look at sectors $xlf $xli $xle as good examples that is not the case. Indexes weighted to companies doing good in this environment
magatane maphake
magatane maphake May 25, 2020 6:52AM ET
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Which headlines do you look at?
Jeremy Powell
MissRateHike May 25, 2020 6:47AM ET
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this is great news aint it)
dek ra
dek ra May 25, 2020 6:47AM ET
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bullish, thats what the market goes for
Rotolo Domenico
Rotolo Domenico May 25, 2020 6:44AM ET
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Wonderful news.....to go down but...
Brian Helmuth
Brian Helmuth May 25, 2020 6:43AM ET
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Bullish!
Klaus Weyers
Klaus Weyers May 25, 2020 6:43AM ET
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totally nuts for stocks to go higher.. second major downmove imminent.. short all rallies.. s&p target 2200
Brian Helmuth
Brian Helmuth May 25, 2020 6:43AM ET
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Klaus Weyers  I can live with bear meat to feast on.
 
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