Asian markets, risk assets ride up on vaccine hopes By Reuters



© Reuters. An SGX sign is pictured at Singapore Stock Exchange

By Swati Pandey

SYDNEY (Reuters) – Asian shares jumped on Wednesday as optimism about a coronavirus vaccine bolstered risk appetite while the euro rose to a four-month top on the prospect of stimulus ahead of a crucial EU summit.

MSCI’s broadest index of Asia-Pacific shares outside Japan () rose 1.2%, edging closer to a recent five-month peak.

Japan’s Nikkei () added 1.5% to the highest since June 10 while Australia’s benchmark index was up 1%. Chinese shares gained modestly with the blue-chip CSI300 index () ticking up 0.3%.

E-mini futures for the S&P 500 rose 0.8%.

Risk appetite was boosted by Moderna Inc’s (O:) experimental vaccine for COVID-19 which showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study.

On Tuesday, the Dow Jones Industrial Average () rose over 2%, while the S&P 500 () gained 1.34% and the Nasdaq Composite () climbed 0.94%. ()

“… the vaccine is more than a show stopper. It’s the ultimate recession stopper,” said Stephen Innes, markets strategist at AxiCorp.

The stock surge came despite lingering bad news about the coronavirus and after three U.S. states reported new record daily deaths from the pandemic, while tensions continued to grow between the United States and China.

“Although a mismatch between financial markets and the real economy remains in full effect, the removal of a single recessionary input (the virus) via a vaccine can pave the way for fast economic recovery,” Innes added.

“So, the positive news on the vaccine can go a long way to explain the dissonance between the shift in the stock market sentiment relative to the angst on Main Street.”

Simmering tensions between the United States and China also loom large, after U.S. President Donald Trump signed legislation and an executive order to hold China “accountable” for the national security law it imposed on Hong Kong.

The dollar was on the defensive, particularly against risk-sensitive currencies, following news of progress in vaccine development.

The euro () rose to as high as $1.1423, its strongest since March 10 and not far off its peak so far this year of $1.1495.

The single currency has been helped by hopes the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic.

The euro’s strength helped to push the () to 96.056, a one-month low.

The yen was little moved at 107.27 per dollar , off a two-week high of 106.635 ahead of the Bank of Japan’s policy announcement later in the day where it is expected to keep monetary policy steady.

The risk-sensitive Australian dollar rose 0.5% to $0.7009 .

There were still signs of wariness among investors, as yields on leading U.S. and euro zone government debt fell and safe-haven gold prices solidified gains above $1,800 an ounce.

rose to $1,809 an ounce.

Oil prices rose on Wednesday after a sharp drop in U.S. crude inventories. Brent crude () futures were up 10 cents at $43 a barrel, and U.S. crude () futures rose 14 cents to $40.43 a barrel. [O/R]

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.



Wall Street surges, led by energy and materials By Reuters


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© Reuters. New York Stock Exchange opens during COVID-19

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By Noel Randewich

(Reuters) – Wall Street surged on Tuesday, with the ending more than 2% higher as investors bought energy and materials stocks and looked beyond a recent rise in coronavirus cases.

The S&P 500 energy, materials and industrial indexes jumped more than 2%, while health, technology and consumer staples each rose more than 1%.

Amazon (NASDAQ:) slipped 0.6%. It and other recently strong performing technology and growth stocks, including Facebook (NASDAQ:) and Netflix (NASDAQ:), recovered from deeper losses, giving the Nasdaq a last minute spurt.

“Today is counterintuitive. We are reading about California’s economy shutting down and a record spike in cases in Florida, and yet you have energy stocks leading,” said Bob Shea, chief executive officer at TrimTabs Asset Management in New York. “We’re seeing a mini-rotation into value.”

JPMorgan Chase (NYSE:) & Co, the largest U.S. lender, rose 0.6% after it posted a smaller-than-expected 51% drop in second-quarter profit.

Wells Fargo (NYSE:) & Co tumbled 4.6% after booking a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc (NYSE:) dropped 3.9% after it reported a steep fall in quarterly profit.

The S&P 500 banks index dropped 1.2% as the three banks set aside a combined $28 billion to cover potential losses on loans to borrowers hurt by the coronavirus pandemic.

Wall Street has reclaimed most of its coronavirus-driven losses since March as a raft of monetary and fiscal stimulus and upbeat economic data raised hopes of a swift post-pandemic recovery.

But a recent record surge in COVID-19 cases and new business restrictions, particularly in California, has again raised uncertainty about how it may take for the economy to recover.

Alabama, Florida and North Carolina reported record daily increases in COVID-19 deaths on Tuesday.

For a graphic on COVID-19’s growing potential economic impact:

https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgoebepq/Pasted%20image%201594676240048.png

Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the 2008 financial crisis, according to Refinitiv IBES data.

The Dow Jones Industrial Average surged 2.13% to end at 26,642.59 points, while the S&P 500 gained 1.34% to 3,197.52.

The added 0.94% to 10,488.58.

Delta Air Lines Inc (NYSE:) dropped 2.65% after it warned it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the coronavirus pandemic, with demand largely tracking the curve of infections in different places.

Moderna (NASDAQ:) Inc jumped 4.5% after it said it plans to start a late-stage clinical trial for its COVID-19 vaccine candidate on or around July 27.

Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.

The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 35 new highs and 31 new lows.

Volume on U.S. exchanges was 10.7 billion shares, compared with the 11.8 billion average for the full session over the last 20 trading days.



Delta trims August flights amid resurgent virus, CEO says demand ‘at a stall’ By Reuters



© Reuters. FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham

By Tracy Rucinski

CHICAGO (Reuters) – Delta Air Lines (N:) scaled back the flights it planned to add in August amid a surge in COVID-19 cases and warned it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the pandemic.

“We’re at a stall right now,” Chief Executive Ed Bastian told Reuters, saying demand that built up over June for travel to places like Las Vegas, Florida or New York had suffered due to fresh cases and quarantines, while picking up to some mountain and international destinations.

It cut the flights it planned to add in August to 500 from 1,000.

Shares were down about 1.4% pre-market.

Atlanta-based Delta posted a $2.8 billion adjusted net loss, or $4.43 per share, for the second quarter as passenger revenue plummeted 94% during a season that some analysts call the worst in aviation history.

Delta stuck to its target to halt a daily cash burn, which hit $100 million at the start of the pandemic, this year though Bastian warned it hinges on demand.

“There’s a lot of risk because it’s hard forecasting what’s going to happen with the virus,” he said.

The airline slowed its daily cash burn to about $27 million in June and sees a similar rate in July, with improvements as economies open and people feel more comfortable traveling.

Delta had $15.7 billion in liquidity at the end of June. It has not decided whether to take a $4.6 billion secured loan under the CARES Act – available until Sept. 30 – as it eyes other options involving similar collateral, Bastian said.

It already received $5.4 billion to cover payroll through September under the U.S. government stimulus package.

Large U.S. airlines have warned of furloughs in October when those funds run out, but Bastian said he hoped to avoid furloughs after more than 17,000 employees opted for buyouts and thousands more for extended unpaid leaves.

Over 45,000 employees have taken varying short-term leaves.

Cowen analyst Helane Becker called better-than-expected cost control the highlight of the quarter but said the revenue outlook “remains challenged due to erratic bookings and the extended pandemic.”

LIMITED SEATING

Delta may continue blocking middle seats beyond September thanks to demand for comfort but warned it cannot make money filling only 60% of its planes.

“You can’t raise prices high enough, particularly when your competition isn’t blocking middle seats and has a lot more supply out there,” Bastian said.

Southwest Airlines (N:) too is limiting seating capacity through September, but rivals American Airlines (O:) and United Airlines (O:) have added thousands of flights with all seats for sale on hopes of picking up leisure summer demand.

Delta, the first of the U.S. airlines to report quarterly results, is more geared toward business travel, which will be slower to recover, but Bastian said its SkyMiles loyalty data showed business customers traveling for personal reasons and willing to pay a premium.

Delta, which had been expanding aggressively through international partnerships, wrote down $1.1 billion against its recent LATAM Airlines (SN:) investment and $770 million against Grupo AeroMexico (MX:) after their Chapter 11 filings, and booked a $200 million charge against its stake in Virgin Atlantic, which is also restructuring.



Garuda Indonesia says talking to Airbus to delay 2020 deliveries By Reuters



© Reuters. The logo of Garuda Indonesia is pictured on an Airbus A330 aircraft parked at the aircraft builder’s headquarters of Airbus in Colomiers

JAKARTA (Reuters) – Flag carrier Garuda Indonesia (JK:) is in talks with Airbus (PA:) to delay deliveries of four aircraft this year, its chief executive said on Tuesday, as the coronavirus outbreak restricts travel.

“This year we should receive four Airbus planes, but we are negotiating to delay that,” CEO Irfan Setiaputra said in a parliamentary hearing.

The company is also restructuring its aircraft leasing and aims to terminate “unsuitable” contracts, Setiaputra said.

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.



Luckin Coffee co-founder Lu steps down as chairman By Reuters



© Reuters.

(Reuters) – Luckin Coffee (OTC:) Inc said on Monday co-founder and chairman Charles Zhengyao Lu has stepped down and will be replaced by acting Chief Executive Officer Jinyi Guo.

Guo has also been appointed as CEO of the coffee chain, the company said.

The move to replace Lu comes just weeks after Luckin said he would stay on as chairman after a proposal to oust him, stemming from an internal fraud investigation, failed to get board approval.

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.



Alphabet’s Google commits $10 billion to accelerate digitization in India By Reuters


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© Reuters. A woman walks past the logo of Google during an event in New Delhi

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By Sankalp Phartiyal and Aditya Kalra

NEW DELHI (Reuters) – Alphabet (NASDAQ:) Inc’s Google on Monday said it would spend around $10 billion in India over the next five to seven years through equity investments and tie-ups, marking its biggest commitment to a key growth market.

The investments will be done through a so-called digitization fund, highlighting Google’s focus on the rapid pace of growth of apps and software platforms in India, one of the world’s biggest internet services markets.

“We’ll do this through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments,” Sundar Pichai, CEO of Alphabet, said on a webcast during an annual “Google for India” event.

“This is a reflection of our confidence in the future of India and its digital economy.”

The new $10 billion investment was the largest Google had done in India, Pichai said.

“We’re particularly focused on making sure the internet expands beyond English and other vernacular languages. That’s an important angle we’ve looked at,” he told Reuters in an interview.

Google wants to bolster the growth of internet in India, which currently has over 500 million active users, and help get another 500 million people online, Pichai said.

Beyond investments via the fund, Google, would also focus on areas like artificial intelligence and education in India, he added.

Google has already made some direct and indirect investments in Indian startups such as local delivery app Dunzo.

Indian-born Pichai joined Google in 2004, and is widely credited for making the Chrome browser. He replaced company co-founder Larry Page as CEO of parent Alphabet Inc last year.

The U.S. tech group, whose Android mobile operating system powers a bulk of India’s roughly 500 million smartphones, will continue to work with manufacturers to build low-cost devices so that more and more people can access the internet, another Google executive said.

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.



Asian shares extend rally, U.S. earnings to test optimism By Reuters



© Reuters. A man wearing protective face mask walks in front of a stock quotation board outside a brokerage in Tokyo

By Wayne Cole

SYDNEY (Reuters) – Asian shares crept toward five-month peaks on Monday as investors wagered the U.S. earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.15%, having climbed sharply last week on the back of surging Chinese stocks, which added another 1% on Monday..

gained 1.7% and South Korea 1.2%. E-Mini futures for the S&P 500 rose 0.5% even as some U.S. states reported record new cases of COVID-19, a divergence that shows no sign of stopping.

EUROSTOXX 50 futures added 1.1% and futures 0.8%.

“Ongoing grim U.S. COVID-19 infection news continues to be summarily ignored in favour of ongoing optimism regarding the time-line for the discovery and rapid roll-out of an effective vaccine and/or more policy support for asset prices and the U.S. economy,” said Ray Attrill, head of FX strategy at NAB.

“JP Morgan, Citigroup (NYSE:), and Wells Fargo (NYSE:) all report on Tuesday and there’s a view that the bar has been set pretty low for them to report the almost obligatory ‘better than expected’ results – the absence of forward guidance from many firms notwithstanding.”

Wednesday sees Goldman Sachs (NYSE:) and Bank of NY report, while Thursday has Netflix (NASDAQ:) and Morgan Stanley (NYSE:).

While bank shares rose sharply on Friday they have been badly lagging technology stocks, with analysts at Bank of America (NYSE:) noting tech outperformance in the past six months was greatest since the 1999 tech bubble and the 2008 global financial crisis.

If the S&P 500 was just “tech, health care, Amazon (NASDAQ:), Google (NASDAQ:)” the index would now be 4,173, they wrote in a note, way above the current level of 3,185. If made up of everything else, it would be 2,924.

“Central banks are crushing rate expectations, forcing risk-taking in credit markets,” they added.

Yields on U.S. 10-year notes came close to record lows last week at 0.569% and were last at 0.63%.

Super-low rates have in turn been a boon for non-yielding gold which hit a near nine-year high after five straight weeks of gains. The metal was last at $1,803 an ounce, just off a $1,817.17 top.

The hunt for yield has tended to benefit emerging market currencies and those leveraged to commodities such as the Australian dollar, while weighing on the U.S dollar.

Against a basket of currencies, the dollar was off at 96.585 on Monday and not far from the June trough of 95.714. The dollar was a fraction softer on the yen at 106.88, while the euro held at $1.1309.

Oil prices eased in early trade, although that followed a sharp rise on Friday when the International Energy Agency (IEA) bumped up its 2020 demand forecast. [O/R]

futures dipped 41 cents to $42.83 a barrel, while lost 40 cents to $40.15.

Graphic: Asian stock markets https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH



Tesla slashes Model Y SUV price as pandemic weighs on auto sector By Reuters



© Reuters. The Tesla logo is seen on a car in Los Angeles

(Reuters) – Tesla Inc (O:) cut the price of its sport utility vehicle Model Y by $3,000, just four months after its launch, as the U.S. electric carmaker seeks to maintain sales momentum in the COVID-19 pandemic.

The reduction follows price cuts in May on Tesla’s Model 3, Model X and Model S.

The company headed by Elon Musk this month posted a smaller-than-expected fall in car deliveries in the second quarter, resilient results despite the pandemic that hit the global auto industry.

The Model Y now starts at $49,990, down nearly 6% from its previous price of $52,990, according to the carmaker’s website.

Tesla did not immediately respond to a Reuters request for comment.

The company started deliveries of the Model Y in March, promising a much-awaited crossover that will face competition from European carmakers like Volkswagen AG (DE:) rolling out their own electric rivals.

In April, Tesla had said the Model Y was already profitable, marking the first time in the company’s 17-year history that one of its new vehicles turned a profit in its first quarter.

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.



NMC’s UAE entity weighing Abu Dhabi option for restructuring: sources By Reuters



© Reuters.

By Saeed Azhar and Davide Barbuscia

DUBAI (Reuters) – Troubled hospital operator NMC Health’s entity in the United Arab Emirates (UAE), NMC Healthcare LLC, is considering applying for restructuring and insolvency proceedings locally, two sources familiar with the matter said.

The move comes three months after NMC Health Plc , the London-listed holding company for the hospital group, went into administration in April after months of turmoil over its finances.

The two sources told Reuters that NMC Healthcare LLC was looking at options to file under the jurisdiction of Abu Dhabi Global Markets (ADGM), which has promulgated its own laws relating to insolvency and corporate restructuring.

Such a move would help create a framework for recognition of debt claims while the administrators of NMC Health Plc finalise the scheme of arrangement with creditors, one of the sources said.

A scheme of arrangement is a binding agreement about payment of all, or part of, a firm’s debts over a period of time.

The administrators for NMC Health declined to comment. ADGM did not respond to a Reuters request for comment.

NMC Health is the largest private healthcare provider in the UAE, operating more than 200 facilities including hospitals, clinics and pharmacies.

NMC’s operating entities were unaffected by the appointment of administrators in April and services continued.

That is unlikely to change as UAE authorities are keen to ensure hospital services in the Gulf state are not affected during the COVID-19 pandemic, the second source said.

NMC’s implosion this year amid allegations of fraud and the disclosure of more than $4 billion in hidden debts has left some UAE banks and overseas lenders nursing heavy losses and prompted legal battles to try and recover money owed.

The troubles began in December when short-seller Muddy Waters (NYSE:) raised concerns over the company’s financial statements and were compounded by doubts over the size of stakes of major shareholders, including founder BR Shetty.

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.



Ubisoft announces staff departures after misconduct allegations By Reuters



© Reuters. Paris Games Week (PGW) trade fair for video games in Paris

(Reuters) – French video games group Ubisoft announced several staff departures on Saturday after conducting a review in response to allegations of misconduct at the company, which earlier reports said centered around sexual misconduct charges.

The changes were initiated to improve “workplace culture”, the company said.

The group’s chief creative officer, managing director of its Canadian studios and global head of human resources have resigned from their positions, effective immediately, the company said.

“Departures come following the initiation of a rigorous review that the Company initiated in response to recent allegations and accusations of misconduct and inappropriate behavior,” the company said in a statement.

Unisoft said last month it was investigating allegations of misconduct at the company with the support of specialized external consultants.

According to media reports, Ubisoft earlier this week confirmed the departure of its vice president, Maxime Béland, following assault allegations.

According to a Bloomberg report, two high-ranking Ubisoft executives were put on leave last month following allegations of misconduct.

The video game industry was caught up in the #MeToo movement in June after women spoke about abuse on Twitter. A Medium post with compiled allegations was also circulated.

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.