MIEX Offical

Ten weeks into the Coronavirus crisis, and a month after crude oil prices dropped below zero, the price of West Texas Intermediate crude is now at $35. America’s oil producers have slashed output and cut $400 billion from capital spending budgets. The pace of drilling is down more than 80% from the peak of the Great American Oil Boom that saw output more than double in less than a decade.     So where’s the evidence of green shoots?   To start, Americans are driving more. Corona-lockdowns had gutted gasoline consumption by mid-April. Now, according to Deutsche Bank numbers, we’re only driving 30% less than before. Likewise, worldwide petroleum demand appears to have bottomed out in May at 79 million barrels per day (bpd), according to Rystad, the energy consultancy, which sees June demand creeping up to 84 million bpd. Still a far cry from the 99.5 million rate at the end of 2019, but it’s progress.   Meanwhile, America’s oil drillers are helping to allev...

If it wasn’t bad enough for Sino-U.S. relations that the China’s reputation among Americans had already fallen to an all-time low in a Pew Research Center survey in March, a new poll out this week has found even more additional negative trends and expectations for the future.   A survey conducted April 29 to May 5 showed that Americans expect China’s international reputation will suffer because of how the country has handled the coronavirus outbreak, Pew said. They also overwhelmingly don’t trust Chinese government information about the pandemic, the survey found.   The new poll seems likely to further embolden U.S. politicians including President Trump and likely main rival Joe Biden to criticize China ahead of November presidential and congressional elections over trade practices and transparency of its handling of the Covid-19 outbreak. China’s heated ripostes from “wolf warrior”-style spokesmen have helped to push relations to one of the lowest levels since the U.S...

China has been exploring the idea of a Central Bank Digital Currency (CBDC) since 2014. Six years later, it launched a pilot version. The official Digital Currency Electronic Payments (DCEP) platform currently looks set to launch within a year.     Some media observers have suggested that Beijing is launching the DCEP to wrest control from the digital incumbents: Alipay and WeChat Pay. The two fintech giants control about 90% of China's digital payments market, and between 20-25% of retail spend across China, not to mention the distribution of many other financial products and services such as wealth management and lending.   Given that these two platforms are the bedrock of China's digital financial ecosystem, anything that challenged their preeminence would be, to put it bluntly, a big deal. But Beijing is not looking to replace Alipay and WeChat Pay with the DCEP. Rather, Alipay and WeChat Pay will likely be integrated with the DCEP, which will cement their pos...

The U.S. dollar traded higher against all of the major currencies today, but its gains were modest as investors worry about ongoing U.S.-China tensions. The Trump administration approved arms sales to Taiwan at the opposition of China, and the Senate passed a bill that could delist Chinese companies from U.S. exchanges if they cannot prove they are not owned by the Chinese government. With that said, PMI reports across the globe reinforce early signs of a global recovery. This should be no surprise, considering that economic activity completely shutdown in April. So on a percentage basis, any recovery in May will be significant. It’s a completely different story, of course, on an absolute basis, but PMIs are compared to the prior month. Even if some of the reports, like Markit Economics’ U.S. manufacturing PMI, rises less than expected, investors are just happy that growth is moving in the right direction. In fact, across the globe, we are seeing a faster recovery in services than manu...

China streaming site Bililbili has added a second billionaire among its leaders after the company's Nasdaq-traded shares rose to a record on first-quarter financial gains. Founder Yi Xu’s approximately 8% stake was worth $1 billion this morning after the stock traded as high as $36.26.   Shanghai-headquartered Bilibili’s shares rose after the company said yesterday revenue in the first three months of 2020 soared by 69% from a year earlier to $327 million (see report here).   Investors also include Alibaba and Tencent. Sony in April bought 5% stake in company, which is popular among Generation-Z users.   Chairman Chen Rui became a billionaire last year, and is worth $1.7 billion on the Forbes Real-time Billionaires List today.   Xu, who holds an associate degree from the Beijing University of Posts and Telecommunications, founded Bilibili in 2009, and has been a director and president since December 2013. He is 30 years old, according to a U.S. stoc...

Oil prices climbed by more than $1 a barrel on Monday, supported by output cuts and signs of gradual demand recovery amid easing coronavirus curbs, with U.S. oil showing no signs of last month's contract expiry price rout. Brent crude (LCOc1) was up $1.06, or 3.3%, at $33.56 a barrel by 0452 GMT, after touching its highest since April 13. U.S. West Texas Intermediate crude (CLc1) was up $1.29, or 4.4%, at $30.72 a barrel, after rising to its highest since March 16. "Oil prices may show further upside momentum as the easing in mobility restrictions grows," said Stephen Innes, chief global market strategist at AxiCorp in a note, referring to curbs that were designed to counter the coronavirus. The June WTI contract expires on Tuesday, but there was little indication of WTI repeating the historic plunge below zero seen last month on the eve of the May contract's expiry amid signs that demand for crude and derived fuels is recovering from its nadir. Production is also fal...

Bitcoin has outperformed most other assets so far this year and is on course to be one of the best bets of 2020.   The bitcoin price, after plummeting in March amid a wider coronavirus-induced sell-off, is up around 30% so far this year.   However, one minor cryptocurrency has almost doubled in price since January—with many expecting it to climb yet further.   Tezos, trading as XTZ, has risen by 85% since the beginning of the year, adding to gains made last year and giving tezos a market capitalization of almost $1.8 billion.   At the beginning of the year, tezos was the 15th most valuable cryptocurrency by market capitalization, according to CoinMarketCap data, but has now broken into the top ten—and could move quickly past some rivals if its run continues.   "Tezos seems to be one of the most popular platforms for new projects to build on at the moment," said Mati Greenspan, the founder of market analysis firm Quantum Economics, who holds s...

The market opened slightly higher but later turned negative on Tuesday, falling around 2% as Wall Street continued to assess the risks of reopening the economy too soon.   The Dow Jones Industrial Average fell 1.9%, over 400 points, on Tuesday, while the S&P 500 lost just over 2% and the Nasdaq was down 2.1%.   Stocks opened 0.5% higher, before turning negative in the afternoon and falling sharply in the last hour of trading.   House Democrats released their latest coronavirus relief bill wishlist, worth $3 trillion, with a vote scheduled for Friday. The package includes federal aid to states, more stimulus checks, hazard pay for essential works, funding for testing and more unemployment insurance.   The major averages declined after Republican Senator Lindsey Graham pushed legislation to demand China either cooperate with an investigation into the origins of coronavirus or face sanctions.   Dr. Anthony Fauci, the director of the National...

The headline unemployment number for April 2020 has drawn attention at over 14%. It’s both the highest unemployment rate on record and the biggest monthly increase. Also, it’s likely that May’s data will prove worse. There are important trends beyond the headline numbers that start to tell the story of how the COVID-19 crisis is playing out in the economy and markets.   It’s no surprise which sectors of the economy are worst hit, but the impact is severe. We can see that the unemployment rate in the leisure and hospitality sector has risen to almost 40%. That’s astronomic, and it stands out at the most impacted sector, but wholesale and retail has also seen a big spike to almost 20% unemployment. This perhaps lends support to unemployment being temporary as its easy to imagine that demands picks up for these sectors, staffing will resume too.   It also explains some of the disconnect between unemployment data and the stock market. We’ve seen enormous spikes in retail a...

Disney is giving us a reality check this week. Last week’s earnings announcements among the tech giants were exuberant. Each made robust gains in sales, prompting a bewildered Paul Krugman to conclude in the New York Times that “the stock market is not the economy.” The share price of big tech could go up, despite the shrinking economy and skyrocketing unemployment. That’s not the same on Main Street. The Walt Disney Co. reported on Wednesday night that profits dove more than 90% in the second quarter. And its share price declined more than 30% so far this year, for a company, until now, has been held as the best example of a traditional organization transforming into a digital winner. That magical experience was then extended to Shanghai when Disney opened its $5 billion Chinese theme park in 2016. Next, it weaned itself off of Netflix, halting the distribution of its content through the streaming behemoth in 2017 by launching Disney+ as its own direct-to-consumer service. All of thes...

The world is confused and panicked about Covid-19. We are awash in data. But the data, while accumulating fast, is wildly incomplete and too often sensationally misinterpreted. Where to turn for truth? A famous investor friend of mine, who runs a $100-plus billion fund for more than 2,500 clients, likes to say that global stock markets are the best predictor of the future—not only financial trends, but of all important trends. That includes this year’s monster, Covid-19. Long before Wikipedia, the global stock markets embodied what is now called “the wisdom of the crowds.” Markets are vast storehouses of data, analytics, algorithms and predictions of the near-term future. In other words, you’re safe in assuming that today’s global stock markets have already absorbed and processed as much information about Covid-19—pessimistic and optimistic—as have Imperial College, Johns Hopkins, the World Health Organization, and all the world’s medical universities, hospitals, health serv...