Friday, April 3, 2020

"Chanos says gig economy companies like Uber will emerge ‘harmed’ from coronavirus crisis"

From CNBC, April 2:
  • The coronavirus pandemic may not be the boon for gig economy companies that some believe it will be, according to billionaire short seller Jim Chanos.
  • Chanos said the unemployment benefits for gig workers could highlight certain issues with the operating models of companies like Uber, Lyft and GrubHub.
  • Because these companies classify drivers as independent contractors rather than employees, the companies have avoided paying into unemployment programs the way a traditional employer would.
  • That means the payments fall on taxpayers.
The coronavirus pandemic may not be the boon for gig economy companies that some believe it will be, billionaire short seller Jim Chanos told CNBC on Thursday.
“I think the gig economy companies are going to come out of this harmed, not enhanced,” said Chanos, founder of Kynikos Associates.

“I know there’s a body of thought that oh, well everybody will just do food delivery and we’ll all take Ubers and no one is going to buy a car again, and I think the flip side of it is that the labor pool issue for the gig economy companies is going to loom very very large coming out of this crisis.”

In an interview on CNBC’s “Halftime Report,” Chanos said the unemployment benefits being paid to gig economy workers, as outlined in the $2 trillion relief bill, could highlight certain issues with the models of companies like Uber, Lyft and GrubHub. Because these companies classify drivers as independent contractors rather than employees, the companies have avoided paying into unemployment programs the way a traditional employer would. That means the payments fall on taxpayers.

Uber CEO Dara Khosrowshahi appealed directly to lawmakers and President Donald Trump to secure unemployment benefits for gig economy workers like his. Uber, along with other gig companies, has fiercely opposed measures to reclassify its workers as employees, arguing it would strip them of flexibility and supplemental income they enjoy. Uber is challenging a new California law that aims to reclassify its workers along with delivery service Postmates.
While these companies have been integral in transporting food and essential workers during social distancing measures, Chanos said their models could leave them open to government scrutiny and regulation down the road.

“I think both political parties are going to be looking at that pretty hard coming out of the crisis to enhance corporate responsibility in lots of different ways whether it’s keeping employees as independent contractors, whether its restricting buybacks,” Chanos said....
....MORE (video)

Also at CNBC:
Jim Chanos says beware the ‘virus stocks’ like Peloton, Zoom benefiting temporarily from lockdowns

EIA Natural Gas Weekly Update for Week Ended April 1

From the Energy Information Administration:
In the News:
With warm weather, U.S. residential and commercial natural gas consumption down in 2020
U.S. residential and commercial natural gas consumption from January–March 2020 averaged about 35.6 billion cubic feet per day (Bcf/d), a decrease of 18% (7.8 Bcf/d), from January–March 2019 and was 10% (4.2 Bcf/d) lower than the 10-year (2010–2019) average, according to IHS Markit estimates for 2020 and EIA historical data. This decrease was driven by unseasonably warm weather. Total natural gas customer-weighted heating degree days (HDDs) for January–March 2020 were 13% lower than the 30-year (1981–2010) average. The primary use of natural gas by residential and commercial customers during the winter is space heating, and fewer HDDs indicate less need for heating.
January 2020, in particular, was the fifth-warmest January on record in the United States, according to the National Oceanic and Atmospheric Administration. January 2020 HDDs were 17% lower than the 30-year average. According to EIA’s Natural Gas Monthly, January 2020 U.S. natural gas consumption in the residential and commercial sectors averaged 42.3 Bcf/d. This level was 6.4 Bcf/d, or about 13%, lower than the January 2019 average, and 4.0 Bcf/d, or about 9%, lower than the 10-year average for January. January 2020 had the lowest January consumption by the residential and commercial sectors since January 2012.

Mild weather continued through the rest of the winter. HDDs in February and March totaled about 7% and 15% lower than their 30-year averages, respectively. Although EIA does not yet have data for these months, according to IHS Markit estimates and EIA historical data, U.S. residential and commercial natural gas consumption in February and March averaged 10% (4.4 Bcf/d) and 25% (9.1 Bcf/d) lower than their respective 2019 averages and 2% (0.8 Bcf/d) and 14% (4.2 Bcf/d) lower than their respective 2010–2019 averages.
(For the week ending Wednesday, April 1, 2020)
  • Natural gas spot prices fell at most locations this report week (Wednesday, March 25 to Wednesday, April 1). The Henry Hub spot price fell from $1.71 per million British thermal units (MMBtu) last Wednesday to $1.60/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the April 2020 contract expired Friday at $1.634/MMBtu, down 3¢/MMBtu from last Wednesday. The May 2020 contract price decreased to $1.587/MMBtu, down 13¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging May 2020 through April 2021 futures contracts declined 2¢/MMBtu to $2.214/MMBtu.
  • The net withdrawal from working gas totaled 19 billion cubic feet (Bcf) for the week ending March 27. Working natural gas stocks total 1,986 Bcf, which is 77% more than the year-ago level and 17% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 10¢/MMBtu, averaging $2.50/MMBtu for the week ending April 1. The price of natural gasoline fell by 2%. The prices of propane, ethane, isobutane, and butane, rose by 1%, 6%, 11%, and 18%, respectively.
  • According to Baker Hughes, for the week ending Tuesday, March 24, the natural gas rig count decreased by 4 to 102. The number of oil-directed rigs fell by 40 to 624. The total rig count decreased by 44, and it now stands at 728.

Prices fall across the Lower 48 states with mixed temperatures. This report week (Wednesday, March 25 to Wednesday, April 1), the Henry Hub spot price fell 11¢ from a high of $1.71/MMBtu last Wednesday to a low of $1.60/MMBtu yesterday. Temperatures varied across the country, resulting in mixed heating and cooling demand. Temperatures were cooler than normal west of the Rocky Mountains and warmer than normal east, especially in the Southeast. At the Chicago Citygate, the price decreased 2¢ from $1.53/MMBtu last Wednesday to $1.51/MMBtu yesterday....

Front futures up 2.8 cents at $1.58 

Capital Markets: "Oil Firm, Greenback Extends Gains"

Those prints under $20 on March 30th seem like a distant memory with yesterday;s big pop not just holding but being built upon:

From Marc to Market:
Overview: Global equities are finishing the week on a soggy tone despite the 2%+ gains seen in the US yesterday. The extension of shutdowns, rising contagion and fatality rate, and imploding economies weigh on prices. In Asia, Korea and Indonesia bucked the trend to most minor gains. Europe is giving back yesterday's gains, and the Dow Jones Stoxx 600 is nearly flat on the week. US shares are paring yesterday's gains as well, Benchmark bond yields are little changed, though, at 60 bp, the US 10-year yield is about 13 bp lower on the week. European bond yields are mostly higher on the week, and most premiums over Germany have widened slightly, though not Italy. The dollar remains bid. It is higher against most of the world's currencies heading into the weekend. Among the majors, only the Norwegian krone has gained on the greenback. The JP Morgan Emerging Market Currency Index is off by about 2.5% this week. Gold is consolidating after regaining the $1600 level yesterday. Near $1611, it is off about 1% on the week. Oil prices are consolidating yesterday's surge.

Asia Pacific
Like its manufacturing component, the Caixin services PMI rose to 43 from 26.5. The composite rose to 46.7 from 27.5.
The below 50 reading means it is still contracting, albeit at a slower pace than previously. It is clear from several different measures that China's economic and social activity is recovering. The extent of it is the question. China continues to take action to support the economy and today cut the required reserve ratio for small banks by one percentage point.

In Japan, Prime Minister Abe remains reluctant to call a state of emergency could do so early next week if confirmed cases continue to rise. Meanwhile, it is interesting to note that the final service and composite PMI showed small improvement from the flash readings. To wit: the services PMI is at 33.8 up from 32.7 in the preliminary reading and 46.8 in February. The composite PMI edged up to 36.2 from 35.8 flash estimate and 47.0 in February. Next week, the government is expected to finalize a fiscal package for over JPY500 trillion.

Australia's services PMI deteriorated to 38.5 from the preliminary reading of 39.8 and 49.0 in February.
The final composite stands at 39.4 from the 40.7 initial estimate and 49.0 in February. The RBA and the RBNZ have launched asset purchase programs, and the latter indicated it was accelerating its efforts....

""Very Challenging" - Norway Wealth Fund Lost Record $113 Billion, Withdraws Money To Fight Virus Crisis"

This is old news for anyone paying attention but I wanted to memorialize it on the blog.

The currency market knew what was up a couple weeks ago when the Krone hit a postwar low of 11.7051 to the dollar on March 20. That compared with 9.2604:1 on March 6th, a huge move in such a short period of time.
10.4295:1, last.

From Bloomberg via ZeroHedge, April 3:
The stock market crash around the world, triggered by coronavirus pandemic, has led to unprecedented losses for the world's biggest sovereign wealth fund.

According to Bloomberg, Norway's sovereign wealth fund lost $113 billion in the first quarter. The fund has generally used stock market declines or even bear markets to buy the dip. But maybe this time is different: The fund is offloading assets to cover emergency spending that the government needs to combat the virus.

As a whole, the fund lost 14.5% last quarter, clawing back some losses after a monster rip in global stocks last week. Still, its stock portfolio was down 21.1% over the period, with a slight gain in fixed income investments of 1.3%.

"The market situation is very challenging," said Yngve Slyngstad, CEO of Norges Bank Investment Management (NBIM). "However, the fund has a long-term horizon."

The virus situation in Norway is quickly deteriorating. There are now 4,848 positive cases and 44 people dead. What's concerning health officials is that with increased cases, more and more people need hospitalization, which is straining the country's healthcare system.
With its equity portion of the fund falling five percentage points below the 70% target, the fund will need to rebalance. Slyngstad said in the last week of March that rebalancing would likely happen through selling bonds rather than buying stocks.

The government withdrew $6.49 billion from NBIM last quarter as the virus crisis worsened in March. 

We noted last week that traders were waiting for a rebalancing of sovereign pension funds such NBIM to buy the stock market dip and force a V-shape recovery, but we are finding out this week, that might not be the case....MORE
Selling off Saudi equities earlier this year proved to be fortuitous even if it was done more to protest MbS than to time the market.

Thursday, April 2, 2020

"Oil Storage at Sea Approaching 2009’s Record Levels"

Ah 2009, that was a trade. Both for the cash-n-carry contango trade and for outright longs.

Goldman was pounding the table with their "Oil to $200" drivel. It didn't quite get there, top-tick was $147.27 on July 11, 2008 when the decline to US$30.28 on December 23, 2008 began.
Here's an August 2008 post:
Inside baseball. Oil was recently up $2.22 at $115.09.
A Goldman Sachs research note from July 31st has been keeping me awake at night, and it appears I am several hours late in passing along my take....
... July 31st
Negative gamma issues pose near-term downside risk, but we maintain a year-end forecast of $149/bbl
So they were still touting higher despite the $32 drop in the previous 38 days.

And we were just 12 days from posting Albert Edwards' incredible market/econ call on September 5:

Having extracted as much as they could from their "Long-only Index Investors" (CalPERS et al) here are a few more posts on Goldman and oil coming into that Dec. 23 bottom:
October 7, 2008: Goldman: We Got Our Shorts On, Oil not Going to $200.00
October 27, 2008: The Goldman Commodities U-turn, again
November 20, 2008: It’s official, Goldman capitulates on oil

Did I mention the index was the oil-dominated GSCI?

Oil bottomed and the big traders rented any ship that would hold the gunk and four months later, April 24, 2009 WTI hit $51.55.

As I say, that was a trade.
Not seeing it this time. They are going to have to go solely with the contango.
From Reuters via gCaptain, April 1, 2020:
Oil traders are storing as much as 80 million barrels of oil on tankers at sea, with further ships being sought as land storage sites fill up fast due to a global glut of stocks, shipping industry sources say.
Traders rushed for storage after global oil demand collapsed by a third due to the coronavirus outbreak, and as top producers Saudi Arabia and Russia have refused to curb output so far, creating what is believed to be the biggest oil glut in history.

The last time floating storage reached similar levels was in 2009, when traders stored over 100 million barrels at sea before offloading stocks.
There are over 770 supertankers in the world – each carrying a maximum of 2 million barrels – and shipping sources estimate that between 25 to 40 are currently being used for floating storage.
Locations typically include the U.S. Gulf and Singapore, where major oil hubs are situated.
This compares with fewer than 10 such vessels – known as very large crude carriers (VLCCs) – in February....

SCMP: US$2 trillion loss estimated for aviation-related industries worldwide from coronavirus pandemic, think tank says

From the South China Morning Post, April 2:
  • The pandemic’s impact on the wider global aviation industry will be more than 10 times that of airline losses of US$200 billion, founder and president of Institute for Aviation Research says
  • Airports in Asia-Pacific will see a loss of US$23.9 billion this year as 1.5 billion fewer passengers travel through region’s hubs, Airports Council International says
The losses for the wider global aviation industry, excluding airlines, from the coronavirus pandemic could exceed US$2 trillion this year, with millions of jobs at risk in Asia-Pacific alone, according to Zheng Lei, founder and president of the Institute for Aviation Research, an independent think tank.
“Airlines are the key to the whole supply chain, if they become problematic, other parts of the supply chain will be affected,” said Lei, who is also the head of aviation department at Swinburne University of Technology in Australia.

“As to impact on the global aviation sector, it has already surpassed US$200 billion. This is only for airlines, not including [the] impact on airports, retailers inside airports and on-the-ground workers. Its bigger impact should be more than tenfold of that on other sectors in the economy, such as to tourism, and shocks to export and import trade.”
According to recent estimates by the International Air Transport Association (IATA), passenger revenue losses for airlines in the Asia-Pacific this year are expected to reach around US$88 billion and US$252 billion globally....

Recently, that time Buffett lost his mind:

"Warren Buffett: ‘I won’t be selling airline stocks’"
Warren, noooo....
Here's what Mr. Buffet  told Fortune magazine: in 1999
...Move on to failures of airlines. Here’s a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact--though the picture would have improved since then--the money that had been made since the dawn of aviation by all of this country’s airline companies was zero.

Absolutely zero.

I like to think that if I’d been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough--I owed this to future capitalists--to shoot him down. I mean, Karl Marx couldn’t have done as much damage to capitalists as Orville did.
Mr. Buffett repeated the sentiment on the 2003 centenary of Orville's first flight.

Then in the 2007 Chairman's letter to the shareholders of Berkshire Hathaway he wrote (pp 8):
...Now let’s move to the gruesome. The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk , he would have done his successors a huge favor by shooting Orville down. The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it.

And I, to my shame, participated in this foolishness when I had Berkshire buy U.S. Air preferred stock in 1989. As the ink was drying on our check, the company went into a tailspin, and before long our preferred dividend was no longer being paid. But we then got very lucky. In one of the recurrent, but always misguided, bursts of optimism for airlines, we were actually able to sell our shares in 1998 for a hefty gain. In the decade following our sale, the company went bankrupt. Twice.

 To sum up, think of three types of “savings accounts.” The great one pays an extraordinarily high interest rate that will rise as the years pass. The good one pays an attractive rate of interest that will be earned also on deposits that are added. Finally, the gruesome account both pays an inadequate interest rate and requires you to keep adding money at those disappointing returns....
And now he defends holding them?
Here's Yahoo Finance with a pretty good interview despite the conclusion being wildly at variance with our thinking:
Warren Buffett likes airline stocks despite the recent dramatic sell off so don’t expect Buffett to dump his shares....
Here's the only pure-play airline ETF:

Natural Gas: U.S. Power Demand Declines (plus Norway-Russia gas war, Saudi oil production+++)

From Platts' Commodity Tracker: 5 charts to watch this week:
Demand destruction from the coronavirus outbreak will be top of mind for power and gas traders this week, while the ripples in the oil market are being felt in Saudi Arabia and Vietnam, albeit in different ways. The iron ore market, which is faring better, rounds out this week’s pick of commodity charts by S&P Global Platts news editors
2. …and US sees power demand decline as coronavirus pandemic spreads 

NYC daily electricity demand

What’s happening? New York City electricity loads have been weaker year-over-year this winter so far due to milder weather, but are now trending significantly below the recent five-year average, indicating a virus-related slowdown, according to Manan Ahuja, manager of North America power at Platts Analytics. These demand numbers could slow down even further as people stay home and businesses remain shuttered to prevent spreading the virus.

What’s next? US power system impacts from the coronavirus pandemic are beginning to emerge, with shifting load patterns, significant load declines in a number of areas and projections that mild weather and business shutdowns will continue to suppress load during the coming weeks....

"Band plays on at Hong Kong Disneyland but visitors stay away"

From the Financial Times, April 1:
Almost two months after Hong Kong’s Disneyland theme park closed its gates, weeds are growing in the car park. At one of the resort’s hotels, the only parts of the complex that are still open, a pianist plays jazz covers of Disney classics to an almost empty lobby. Around the corner, construction workers are labouring 24 hours a day to convert a plot of land into government quarantine facilities to house up to 100 coronavirus patients by next month. 
The spectacle of Disneyland without visitors reflects the wider economic woes facing Hong Kong, which began grappling with the economic fallout of coronavirus weeks before the disease claimed its first victims in the US and Europe. An international financial centre that also serves as one of Asia’s main tourist and transport hubs, the territory has been forced to ban all visitor arrivals from abroad in response to a second wave of cases. 

The travails of its travel and hospitality sector offer a case study for countries in the west that are only beginning to feel the impact of coronavirus on their tourism industries. In February, visitor numbers to Hong Kong plummeted 96 per cent compared with a year earlier, government data show — hitting an economy already weakened by the impact of the US-China trade war and anti-government protests in 2019. Hong Kong's economy contracted by 1.2 per cent in 2019, the first annual decline in a decade....MUCH MORE
One of the writers of this piece, Thomas Hale served briefly at Fort FT Alphaville but moved on. Thomas we hardly knew ye.


The other writer Nicolle Liu shares a surname with some 50 - 60 million other Liu's, including the Chinese Vice-Premier, Liu He.

I know some Liu's, from a rather noteworthy Beijing branch of the fam who informed me of this when I would ask if they were related to this Liu or that Liu.

Possibly related to the headline story, yesterday's:
Hong Kong Q1 Snapshot: Getting Interesting

"Tesla stock rallies after company’s Q1 sales inch closer to Wall Street hopes" (TSLA)

It's a long headline but in its childlike simplicity it's just so perfect.

From MarketWatch:
April 2, 2020 at 4:34 p.m. ET 
Model 3, Model Y deliveries reach 76,200, Tesla says 
Tesla Inc. said late Thursday it delivered 88,400 vehicles in the first quarter, a performance the company called its “best ever” first quarter and a number only a tad below Wall Street expectations.
Tesla TSLA, -5.62% shares rallied more than 10% in the extended session Thursday after ending the regular trading day down 5.6%.

Analysts surveyed by FactSet expected the company to deliver 89,000 vehicles in the first quarter, including 75,700 Model 3 mass-market sedans.

The company said that production of the next vehicle in its lineup, the Model Y compact SUV, started in January and the first vehicles were delivered last month, “Significantly ahead of schedule.”

The Silicon Valley electric-car maker grouped Model 3 and Model Y deliveries at 76,200 vehicles for the quarter, and Model S and Model Y deliveries at 12,200 vehicles. In the past, the company has broken down quarterly deliveries by Model 3, Model S, and Model Y.

Tesla said its Shanghai factory, which had closed for a couple of weeks in January, “continued to achieve record levels of production, despite significant setbacks.”...MORE
Now flipping from childlike with its connotations of wonder and exploration to childish, with its selfishness and uncaring impulsivity we'll note that it appears Elon has achieved his dream of a product lineup designated:

Earlier on the childish front, the FT's Jemima Kelly excoriates Elon on his ventilators BS:
"Coronavirus pandemic ruins outlook for a world of electric and autonomous cars" (TSLA)

Some of the comments are really bad.
The stock is up $62.43 (+13.74%) at $516.90

EIA Natural Gas Storage Report: Focus Chnge, Oversupply to Demand Destruction, Same Result

First up, the pre-release forecasts via FX Empire:
Estimates ahead of the EIA report have ranged widely from a withdrawal as small as 16 Bcf to as large as 31 Bcf. Bloomberg analysts are looking for a 31 Bcf draw. A Wall Street Journal survey calls for a 26 Bcf pull and the Natural Gas Intelligence (NGI) model estimates a 10 Bcf draw.
Last year, the EIA recorded a 6 Bcf injection for the similar week, while the five-year average stands at a withdrawal of 19 Bcf.
And the report:
Working gas in storage was 1,986 Bcf as of Friday, March 27, 2020, according to EIA estimates. This represents a net decrease of 19 Bcf from the previous week. Stocks were 863 Bcf higher than last year at this time and 292 Bcf above the five-year average of 1,694 Bcf. At 1,986 Bcf, total working gas is within the five-year historical range....MUCH MORE 
From the CME:
Last: 1.5605 -0.0265(-1.6700%) 

Recapitulating Ramones: "Song and Stock Volatility

In December 2019, based on research from NYU we proposed* as our new theme song an extremely fast cover of The Ramones "Blitzkreig Bop," in a post which mentioned that we've looked at this paper a few times:
Volume 23, Issue 1, January 2012, Pages 70–85

 Philip Maymin, NYU Poly - Department of Finance and Risk Engineering
Popular music may presage market conditions because people contemplating complex future economic behavior prefer simpler music, and vice versa. In comparing the annual average beat variance of the songs in the U.S. Billboard Top 100 since its inception in 1958 through 2007 to the standard deviation of returns of the S&P 500 for the same or the subsequent year, a significant negative correlation is observed. Furthermore, the beat variance appears able to predict future market volatility, producing 2.5 volatility points of profit per year on average.


► Popular music may presage market conditions because people contemplating complex future economic behavior prefer simpler music, and vice versa. ► In comparing the annual average beat variance of the songs in the U.S. Billboard Top 100 since its inception in 1958 through 2007 to the standard deviation of returns of the S&P 500 for the same or the subsequent year, a significant negative correlation is observed. ► Furthermore, the beat variance appears able to predict future market volatility, producing 2.5 volatility points of profit per year on average.

Here's the 29 page PDF 
*"...So, trying to stay ahead of the curve I am going to propose the Ramones Blitzkrieg Bop as our next theme song.
Here's a very fast (200+ beats per minute) cover:"


"China reports new cases of African swine fever..."

Is it racist for China to call the disease "African" Swine Fever?
From The Pig Site:
China announced today (30 March) that new cases of African swine fever have been confirmed in piglets illegally transported to the Inner Mongolia region.

The latest African swine fever outbreak, detected in a herd of 200 piglets on a farm in Ordos city in the region, has killed 92 of the animals.

China has reported several new cases of the deadly disease this month - its agriculture ministry announced on 12 March that Sichuan province had detected ASF on a truck transporting 111 pigs illegally transported from other provinces.

The deadly disease, first detected in China in August 2018, is estimated to have slashed the country's hog herd by almost 50 percent. As both the world's biggest importer and producer of pork, China is now unable to produce enough to satisfy its domestic market demands. This month China announced that it is encouraging companies to build pig farms overseas to plug the severe domestic pork shortage. 
 According to a report by Reuters, the latest official document, from the top economic planning body and agriculture authority, highlights Beijing's concern as soaring pork prices pushed consumer inflation to its highest levels in years....MORE
In the last month there have also been reports from Sichuan and Hubei, home of you know what.

"COVID-19 lockdown leaves no one to harvest India’s crops"

From Reuters via Gulf News, Apr. 2:
New Delhi: A severe shortage of labour, triggered by India’s 21-day lockdown to curb the spread of the new coronavirus, will disrupt harvesting of winter crops in the world’s second largest producer of staple food grains, such as wheat.
The northern bread basket states of Punjab, Haryana and Uttar Pradesh rely on farm labourers from eastern India, but after the lockdown began on March 24, most of them returned home to their villages.

“We’ve never seen anything like this,” said Ramandeep Singh Mann, a farmer from Punjab, whose family grows wheat, rice and cotton on more than 45 acres (18 hectares) and would employ about 10 workers if they used mechanical harvesters.

“We’ve no one at all for harvests.” Mann is just one of thousands of farmers concerned he will be unable to get mechanical harvesters to fields or even manage to gather by hand crops likely to be ripe in mid-April.
Late harvests mean lower yields, reduced returns, and a smaller window to plant next season’s crops, as well as leaving crops vulnerable to rain and hailstorms.....MORE

"Coronavirus pandemic ruins outlook for a world of electric and autonomous cars" (TSLA)

For more on Elon and the Ventilators* (not going on tour any time soon) see after the jump.

From Yahoo News who seem to be doing a lot more original reporting:
April 1
With Detroit’s Big Three automakers and Elon Musk’s Tesla making ventilators to support the coronavirus pandemic relief effort, no doubt the shift to electronic and autonomous cars has suffered a major setback.

For one, electric and hybrid cars aren’t being made right now as plants are shut down to support social distancing. Who knows when auto production restarts. Moreover, it’s unclear what demand will be like for these often more expensive cars when consumers try to catch up on bills later this year after being laid off this spring.

Meanwhile, automakers have temporarily halted investments in the technology designed to power the cars of the future (not to mention a good chunk of their advertising for them).

And last but not least, the plunge in oil prices — which has sent gas prices to below $1.00 a gallon in some parts of the country — makes it more attractive for people to own a car with a good old fashioned gas engine.  

Take all these factors together, and you see a vastly different road ahead for electric and autonomous cars looking out the next several years.

“There has been a setback,” TPG Global senior advisor and former Ford CEO Mark Fields said on Yahoo Finance’s The First Trade. Fields is credited with putting Ford on track to play aggressively in the electric and autonomous car future as CEO from 2014-2017.

Add Fields, “This is going to be another casualty, if you will of COVID-19, in which an environment where you have consumer purchasing power severely impacted. And the fact that electronic cars are still viewed as luxury items because they are more expensive than internal combustion engines.”...MORE
This was the point of our March 30 headline, "If The Electric Vehicle Business Ever Comes Back This Could Be Big".

*FT Alphaville, April 2: "Elon Musk promised ventilators. These are BPAP machines.".

For victims it is a big distinction, see: "How Ford Is Using Seat Ventilation Fans to Build Thousands of Respirators". For Elon it is a PR/ comms disaster.

Previously from Alphaville's Jemima Kelly:
Cuomo says New York is experimenting with having two patients share one ventilator; Canada Says Ours Go Up To Nine, Eh?
(Could a bunch of internet denizens give us more ventilators?)

Wednesday, April 1, 2020

Climateer Line of the Day: Everyone's a Virologist Edition

Evercore analyst on the study in the NYT story below:

"This trial design reads pretty decent,” he wrote Monday. 
“However, the way in which results were reported 
(and omitted) makes it hard to draw definitive conclusions.”
—Evercore ISI's Umer Raffat as quoted in Barron's

PCORI To Fund Up To $50 Million Study of Hydroxychloroquine To Prevent COVID-19 in Healthcare Workers

Can't think of a better use for $50 mil. than this. As noted in the intro to March 24's "ICYMI: "These Drugs Are Helping Our Coronavirus Patients":
Again, not yet a confirmed treatment, prophylactic or "cure" but cause for cautious optimism.
And a quick point of clarification: When I mention prophylactic usage it is not to protect the general population, production can't gear up fast enough for that. But if we can find something to give to healthcare workers before sending them into the ICU it would be a huge step towards keeping the healthcare system from breaking.

And maybe, if we find something that works as a preventative, give some to the folks dealing face-to-face with the homeless who, unlike so many of us, don't have the option of work-from-home.

Lifted in toto from the Wall Street Journal's Opinion page, March 22, 2020:....
From EurekAlert:

Duke Clinical Research Institute to build a healthcare worker community registry and conduct a randomized trial powered by PCORnet®, the PCORI-funded health research network
WASHINGTON (April 1, 2020) - The Patient-Centered Outcomes Research Institute (PCORI) Board of Governors today approved up to $50 million to fund a registry and randomized clinical trial of the effectiveness of hydroxychloroquine (HCQ) in preventing COVID-19 infections in U.S. healthcare workers.

The registry will create a community of healthcare workers (HCWs) interested in contributing to understanding the impact of COVID-19 on them and their colleagues, families and friends, and to determine their willingness to participate in clinical studies. The trial will evaluate the use of HCQ in addition to usual practice in both preventing COVID-19 infection in exposed healthcare workers and limiting the amount of virus HCWs without symptoms might spread and thus unintentionally disperse to others.

The study, led by the Duke Clinical Research Institute (DCRI), will leverage the infrastructure of PCORnet®, the National Patient-Centered Clinical Research Network, and its established research network of more than 850,000 clinicians and hundreds of health systems, to allow research to be conducted quickly and efficiently. Study results will be shared widely with the healthcare community, including participating healthcare workers and others most affected.... 

NYT: "Malaria Drug Helps Virus Patients Improve, in Small Study"

From the New York Times:
The malaria drug hydroxychloroquine helped to speed the recovery of a small number of patients who were mildly ill from the coronavirus, doctors in China reported this week.
Cough, fever and pneumonia went away faster, and the disease seemed less likely to turn severe in people who received hydroxychloroquine than in a comparison group not given the drug. The authors of the report said that the medication was promising, but that more research was needed to clarify how it might work in treating coronavirus disease and to determine the best way to use it.

“It’s going to send a ripple of excitement out through the treating community,” said Dr. William Schaffner, an infectious disease expert at Vanderbilt University.
The study was small and limited to patients who were mildly or moderately ill, not severe cases. Like many reports about the coronavirus, it was posted at medRxiv, an online server for medical articles, before undergoing peer review by other researchers.
But the findings strongly support earlier studies suggesting a role for the drug, Dr. Schaffner said.
“I think it will reinforce the inclination of many people across the country who are not in a position to enter their patients into clinical trials but have already begun using hydroxychloroquine,” he said.

Previous reports from China and France that the drug seemed to help patients, along with enthusiastic comments from President Trump, have created a buzz around hydroxychloroquine and the closely related chloroquine, which are decades-old drugs used to treat malaria and autoimmune diseases like lupus and rheumatoid arthritis. A resulting spike in demand has led to hoarding and shortages, and left patients who rely on the drugs for chronic diseases wondering whether they will be able to fill their prescriptions.

With no proven treatment for the coronavirus, many hospitals have simply been giving hydroxychloroquine to patients, reasoning that it might help and probably will not hurt, because it is relatively safe.

The earlier reports from France and China drew criticism because they did not include control groups to compare treated versus untreated patients. Researchers called the reports anecdotal, and said the lack of controls made it impossible to determine whether the drugs worked....

Corona, Queens Is NYC's Epicenter Of Coronavirus Outbreak

Goodbye to Rosie, the Queen of Corona.

Mr. Simon grew up a few miles from Corona and Flushing Meadows Corona Park.
He made it across the river to Central Park in 1981:

500,000 people helped him celebrate.
From Patch
The Queens neighborhood of Corona has the highest number of COVID-19 cases in New York City, the epicenter of the nation's outbreak. 
By Kathleen Culliton, Patch Staff

NEW YORK CITY — In an almost unbelievable twist of irony, the most cases of the new coronavirus in New York City have been found in the Queens neighborhood of Corona.
No New York City region has reported more positive COVID-19 tests than the zip code 11368 — which covers Corona, North Corona and Willets Point — with 947 cases reported as of March 31, city data show.

More than 77 percent of the 1,227 Corona residents tested received confirmation they had the deadly virus, New York City Health Department data show.

The neighborhood's population is the most badly affected in New York City, which in turn has become the epicenter of the COVID-19 outbreak in the U.S. with 47,439 confirmed cases reported and 1,096 lives claimed since the disease was first spotted in the city just one month ago.All figures were as of April 1....

I do not know what Mama Pajama saw when she rolled out of bed.

Hong Kong Q1 Snapshot: Getting Interesting

Not there yet but there are some good companies going on sale.
From Reuters, March 31:

Hong Kong stocks post worst quarter since 2015 amid virus concerns
Hang Seng up 1.9% on day but down 16.3% in January-March
* Asia faces economic pain from coronavirus spread - World Bank
* China factory activity beats estimates, raises recovery hopes
HONG KONG, March 31 (Reuters) - Hong Kong shares rose on Tuesday on signs that China’s economy may be recovering from the coronavirus shock, but deepening fears of a global recession sent them to their worst quarter since 2015.

** At the close of trade, the Hang Seng index was up 1.9% at 23,603.48. The Hang Seng China Enterprises index rose 2.1%.

** But the Hang Seng fell 9.7% in March, marking its worst month since October 2018. It dropped 16.3% in the first quarter, its largest quarterly decline since the third quarter of 2015.

** On Tuesday, the sub-index of the Hang Seng tracking energy shares rallied 5.3%, the IT sector rose 2.1%, the financial sector gained 1.4% and the property sector was up 3.3%. ...

However, like everywhere else in the world retailers are at serious risk. From the SCMP, March 31:
Hong Kong wages could drop 20 per cent in 2020 for city blighted by coronavirus pandemic, impact of anti-government protests

"New York State has 10 times the COVID-19 cases California has. Why?"

To dive a bit deeper than this piece you want to look at the actions of local authorities in the month, and especially in the two weeks, before the New York/California, NYC/Bay area numbers begin to diverge.

And for that we have to go back to February 26th and an action I didn't understand in light of San Francisco's other public health threat, people pooping in the streets:
San Francisco Mayor London Breed Declares State of Emergency Over Coronavirus
I'm not sure I know what is going on here....
.....This is a city that has people crapping in the streets.
A city that has a "Poop Patrol" to clean said human fecal matter and pays a pretty penny for folks to do the job: 
Granted that is both salary and benefits but it's still adding up.
This is a city that the U.N.'s special rapporteur on Adequate Housing compared to the worst she had seen in Mexico City and Mumbai.
What are the Mayor and top Alderman talking about?
(because S.F. is both a city and a county Yee is both the top county legislator and heads the city council)
I've been told there were two main reasons for Mayor Breed's declaration:

1) In the U.S. a State of Emergency sets up a template for reimbursement of costs expended by the municipality.
2) Because there are quite a few people in San Francisco with compromised immune systems the public health authorities were very sensitive to the new threat. More on that after the first jump.

From the San Francisco Chronicle, March 27:
New York’s coronavirus outbreak has violently erupted over the past few days, and the state is now driving the national epidemic — while on the West Coast, public health experts are wondering if an early and aggressive response saved California from a similar fate.

California reported some of the earliest coronavirus cases in the United States in late January. And in the first week of March, California and New York were neck and neck on cases of COVID-19, the disease caused by the coronavirus. But over the past week, New York case counts have doubled every few days, and the state now has nearly 10 times the cases California does: 38,000 to 4,200.

[on the left, state-level; on the right metro area]
Infectious-disease experts say early maneuvers in California, especially in the Bay Area — first discouraging people from gathering in crowds and then ordering them to shelter in place — may have had a dramatic impact, even if they came only a few days ahead of those in New York.
But other factors may also be in play. New York is testing far more people — three times as many as California — and therefore identifying more cases, for example. And it’s possible that what’s happening 3,000 miles away could be California’s future.

“New York may just be three or four days in front of us. We’re going to see an increase in the number of cases here as well,” said Dr. Warner Greene, a senior investigator at the Gladstone Institutes in San Francisco who specializes in HIV but is studying the new coronavirus. “Days matter — they really matter. You think you’re fine, you’re absolutely fine, but this thing is just waiting to explode.
“But we went into shelter in place quicker; we got people apart quicker,” Greene said. “That could be a contributing factor to what we’re seeing in California now. And that’s why I think the whole country should be sheltering in place.”

The World Health Organization on Tuesday identified the United States as the next potential epicenter of the pandemic, with China and South Korea both on a path to recovery and Italy starting to see signs of its outbreak slowing down, though gradually.

New York state now makes up roughly half of the United States’ 86,000 cases of COVID-19. On Tuesday, experts on the White House Coronavirus Task Force advised that residents who have fled New York City, where the bulk of cases are located, should place themselves in a two-week quarantine to avoid infecting people in other parts of the country.

New York state is also testing more people than anywhere else in the country — 120,000 as of Thursday, compared with about 77,000 in California, 57,000 of which haven’t been processed yet.
How and why New York’s testing is so far beyond California’s isn’t entirely clear. New York started testing more people sooner than California because the state requested and received emergency-use authorization from the Food and Drug Administration to start using its own test on Feb. 29. At that time, California was using tests supplied by the Centers for Disease Control and Prevention, which was trying to play catch-up after early production errors slowed down distribution to the states.
But testing alone doesn’t explain why New York’s case counts are so much higher than California’s, or why the rate is spiraling up so fast on the East Coast. The death toll in New York was five times higher than California’s — 500 deaths to 85, as of Friday. Deaths tend to be a much more reliable marker of the spread of the disease than cases because determining how someone died is not dependent on the availability of testing kits.

Also, hospitals across New York state, and in New York City in particular, are filling up, but California hasn’t yet seen a similar surge.

New York Gov. Andrew Cuomo issued “stay at home” orders last Sunday, two days after Newsom did the same for California and five days after Bay Area health officers told 6.7 million people to shelter in place.

New York City and the Bay Area had about 450 and 300 cases, respectively, when the Bay Area stay-home orders were issued on March 17. When Cuomo shut down the state on March 22, New York City had 5,500 cases. The Bay Area: 539.

Shelter-in-place orders hadn’t been in effect long enough to entirely account for the dramatic differences, but the Bay Area issued other directives earlier, such as shutting down mass gatherings, advising people to work at home when possible, and asking older adults and people with compromised immune systems to stay home.

“We were more aggressive; we got out there a little earlier,” said Dr. John Swartzberg, an infectious disease expert at UC Berkeley. “We were maybe a week up on New York, and that doesn’t sound like much time, but in terms of the spread of this pandemic, it’s enormous.”...

And from the San Jose Mercury-News: 

Meet the doctor who ordered the Bay Area’s coronavirus lockdown, the first in the U.S. 
Under intense pressure, Sara Cody’s cohorts made the move ‘none of us really believed we would do’
She is the Bay Area’s Anthony Fauci, Santa Clara County’s most “essential” employee, the one who banished us from Sharks hockey games, canceled her own daughter’s high school prom — and eventually shut in 6 million Bay Area residents in six neighboring counties to slow the stampede of a deadly pandemic.

You could be forgiven if you’d never heard of Sara Cody before Jan. 31 — what seems like a century ago, when Kobe Bryant’s death was still what shocked us. That’s the day Dr. Cody was already feeling late, sitting at her dining room table in Old Palo Alto, gulping down a cup of coffee when her cellphone rang. It was 6:49 a.m.
“You’ve got your first positive,” the voice said.

A virus’ lethal journey
Right then, Cody — Santa Clara County’s Public Health Officer since 2013 — was positive that even by Silicon Valley standards, life as we know it here was about to change. Santa Clara County had recorded the Bay Area’s first case of coronavirus — the seventh in the U.S. Later that same day, President Donald Trump would ban most travel from China, where the stealth virus had begun its lethal journey across the planet.

But early that morning, Cody was preparing to tell the public it had already landed right here. Ever since, she has been in a furious race against the virus, making critical decisions that would shut down festivals and family gatherings, ban people from school, work and church — all in a grave attempt to save untold lives.

It was Cody who would eventually lead her Bay Area cohorts to pull the trigger March 16 on the historic seven-county legal order — the first of its kind in the country — that required residents to “shelter-in-place,” days ahead of Gov. Gavin Newsom’s similar mandate for the entire state.
And it is Cody who is carrying the burden of those decisions and the uncertainty of whether they will actually work.

“We just want to do everything we can to slow the train down,” Cody, 56, told the Bay Area News Group in a series of interviews this week, “so that when it hits the curve in the track it will not derail.”

‘When do you need me?’
In these unparalleled eight weeks, colleagues from Cody’s inner circle say, she has seldom hesitated. The morning she learned of the county’s first coronavirus case she was already calling two of her most-trusted advisers, now retired, from the health department. She had worked with them during the Sept. 11 terrorist attacks and subsequent anthrax scare: her predecessor Marty Fenstersheib and Karen Smith, who had recently retired as the state’s public health officer and was on a girls’ ski weekend at Donner Summit when she got Cody’s call....

I won't go into the public pronouncements of the NYC and NY State health commissioners here except to note they did not age well.

"Truck loaded with toilet paper crashes, burns on Dallas highway "

From the Fort Worth Star-Telegram:
A semi-truck carrying toilet paper overturned Wednesday morning and caught fire on a Dallas highway, according to news reports.

No injuries were reported.

The wreck occurred on westbound Interstate 20 at Interstate 45 in Dallas, according to WFAA-TV.

The truck was carrying industrial size toilet paper....

Read more here:

Rob Arnott: "With Volatility Comes Opportunity"

Why you little ray of sunshine you.
From Research Affiliates:
Uncertainty continues to dominate global securities markets and heightened volatility is the result. Feifei Li, partner and head of equities, asks Rob Arnott, the founder and chairman of Research Affiliates, about the implications of increased volatility on investment strategies and where investors can find the best opportunities.

Feifei Li: What do you make of the current volatility environment?

Rob Arnott: Whereas heightened market turbulence can stir fear, panic is unhelpful. Volatility can be our friend if we’re ready to  reassess which markets or assets are newly formed deep-value opportunities and which remain fully priced and to trade accordingly. As I’ve frequently said, market volatility can serve investors well if viewed as a means to respond to opportunities.

Volatility has spiked. The VIX Index peaked above 80 on March 16, over fivefold higher than its long-term average level. Investors who average into markets that are priced to deliver attractive return prospects are reliably rewarded in the long run, as long as they are patient.

The COVID-19 pandemic is an unprecedented shock to the economy, but only one of the catalysts for the current market volatility. Prior to the virus’ outbreak, we noted various warnings from the macroeconomy, credit conditions, and asset class valuations that indicated the capital markets may have been approaching an inflection point.

The extent and duration of market turbulence may depend in part on the level of contagion the shocks generate within the financial system and the response from governments and central banks. While many banks are much better capitalized today than they were during the global financial crisis, interest rates are already effectively at zero. Moreover, following more than a decade of global quantitative easing, sovereign debt in all the major economies is at historically high levels. If the responses from the government and central banks are not measured, the risk of inflation poses a potentially severe threat to sustained market volatility.

Feifei: In your opinion, which have been the worst performing strategies during the sell-off?

Rob: This has been a take-no-prisoners market crash; even countercyclical assets such as commodities are down big. Generally, the hardest-hit markets in the current crisis are those trading at high valuation levels and those with a high market beta, but there are a number of exceptions to this general pattern. Year-to-date through March 24, the US equity market, trading at extremely high valuation premiums relative to its own history and to multiple other developed markets, has plummeted by 24%, and over the same span, REITs are down 37%, emerging market stocks are down 28%, and commodities are down 21%.

Feifei: You have said the time to buy into markets is when we are at peak fear. Which signals do you look at to ascertain this?

Rob: It’s impossible to pinpoint peaks and troughs. We don’t believe we have any special knowledge or skill to divine peaks or troughs ahead of the pack, particularly in the short term. But we do have the discipline to buy the assets people fear most and sell the assets that are most beloved. Stocks will begin to recover long before the pandemic is on the wane. The strongest bull markets are not built on a foundation of good news, but on diminishing bad news.

Wouldn’t it be nice if the world of academic finance had coined the expression “equity fear” premium instead of “equity risk” premium?! The risk premium is at its best when fear is at a peak. It’ll be hard to be perfectly right on the turning point, naturally, but don’t wait for good news—just wait until the pattern of bad news lets up.

Many of today’s leading indicators, such as capital market signals, are available in real time. In contrast, real-economy measures arrive over weeks and months. Today’s observation of market signals such as stock prices, real bond yields, commodity prices, credit spreads, yield curve slope, and implied volatilities point to a deep economic contraction. In the coming weeks and months, leading indicators from the real economy will offer estimates of the magnitude of the present contraction....

"Carson Block on Short Selling in the Time of Coronavirus"

The question of urban density vs. sprawl and the thinking of this entire generation of urban planners is going to be an area of extraordinary opportunity over the next decade or two.

From Worth:
The famed short seller caught up with Worth to discuss the coronavirus pandemic, short selling in times of market crisis—and human nature.

Short seller Carson Block catapulted to fame almost a decade ago for exposing alleged frauds in publicly traded Chinese companies, like the well-known case of Sino-Forest Corp.

Block’s route to short selling was a circuitous one. He was born in New York City, grew up in New Jersey, got a law degree in Chicago then moved to China, where he worked as a lawyer before starting the country’s first self-storage company until real estate prices took off, making the venture uneconomical. That endeavor also gave him insight into the Chinese economy, eventually leading him to launch his short-oriented research firm, Muddy Waters, in 2010. The name comes from an old Chinese proverb that roughly translated says, “muddy waters make it easy to catch fish.”

While Block started out investigating alleged fraud in China, he has branched out to Europe, Canada and the U.S. in recent years. In 2015, he launched his first hedge fund, followed by another one in 2016. He had been planning to move his company from the San Francisco Bay area to New York City over this coming summer—but now is not sure.

The coronavirus crisis has made him wonder whether cities will be as popular places to live as they have been in recent years, or whether people will want to take mass transit again. (He’s looking to talk to an expert on the Spanish flu of 1918 for insights on that.)

Block is also wondering whether anything will change, particularly in China, which gave birth to the new scourge. A skeptic, he’s somewhat doubtful.

Worth recently caught up with Block, who is working from his Sonoma County home, to talk about China’s role in the coronavirus pandemic, short selling in times of market crisis—and human nature.

Q: You became known for short selling research in 2010, when you were uncovering fraud from Chinese companies like Sino-Forest. I’m curious what you thought when you first heard about the coronavirus in China?
A: I have been saying [for] many years, semi-facetiously, that if there’s ever a plague that wipes out much of humanity, it will have originated in China. And I was thinking squarely about wildlife markets. It’s this unhealthy, literally and figuratively, obsession the Chinese have for eating these exotic foods. And it’s obvious from when SARS started in 2002 that nothing changed.

The SARS virus also started in these wildlife markets. Why hasn’t the Chinese government taken action to shut them down or better regulate them?
I think the Chinese government is happy to placate. The reason why the government looks the other way on these wildlife markets is this is how a not insignificant number of people in China earn their scratch, particularly when you go on a province by province level. They did not have the political will coming out of SARS to make any changes to really crack down on wildlife markets.

Is this a common attitude from the government?
It’s the same thing with counterfeiting. They understand that the counterfeiting industry causes problems internationally. But that’s a way of making a living for a lot of people. It just happens again and again and again, just like you have people in China who think it’s acceptable and a good idea to cut infant formula with melamine so that they can make a little bit more money.

How do you think this changes our view of China going forward?
This gets into questions about where logic meets human capacity for wiping our memories clean of uncomfortable facts. Let’s talk about the first wave of outing these Chinese frauds. After those were exposed, by 2012, a lot of investors felt China was uninvestable. But by 2014, Alibaba was ready to IPO, and everybody lined up around the block to get their allocation in the IPO. And nobody wanted to remember or care about the problems with these China listings....

Speaking of urban planners, a couple of my favorite headlines from the twenty-teens:
"Gadabout Urbanist Richard Florida Has a New Book..."
"It advises cities on what to do about problems that result from advice he gave them in his previous books..."
I take it the writer is not a fan....
Longtime Urban Planner Leaving Bay Area for Sydney, Says: Well that didn't work 
Truth be told he didn't say "Well that didn't work." What he said was, and I kid you not, "Something has gone terribly wrong."

So, Earnings and Guidance Season Is Upon Us

From MarketWatch:
Will companies in the Dow report earnings as usual despite COVID-19 disruptions, or delay them because they can? 
SEC extends deadline to provide certain disclosures, such as earnings, by 45 days, so MarketWatch asked all 30 Dow components their plans 
The Securities and Exchange Commission will allow companies to delay reporting earnings, if needed, but that doesn’t mean any of them will.
The SEC said last week that it would extend the deadline for companies to provide certain disclosure reports by 45 days, given business disruptions resulting from the COVID-19 pandemic. The companies requesting delays just have to provide a summary of why an extension is needed for each report, the SEC said.
Read MarketWatch’s Coronavirus update.
Some of the companies within the Dow Jones Industrial Average DJIA, -1.83% have already issued press releases stating when their earnings reports will be released. But as many companies have withdrawn financial guidance, given difficulties in assessing the potential impact of the coronavirus health crisis, they can still look to push back releasing those reports.
Don’t miss: First-half earnings are a bust as coronavirus stops companies in their tracks. Will the second-half be better? It depends.
MarketWatch asked all 30 Dow companies whether they would take advantage of the added flexibility in reporting results.

Here is what the companies that responded said (in alphabetical order):

American Express Co.. AXP, -5.16%
American Express is scheduled to report first-quarter first-quarter results on April 24.
“We are still focused on 4/24 as a date,” said Marina Norville, vice president of corporate affairs and communications.

Caterpillar Inc.. CAT, +3.87%
CAT, +3.87% “Caterpillar’s first-quarter earnings will be released on April 28, 2020 as stated in the company’s recent press release issued March 26, 2020,” said Kate Kenny, corporate media manager at Caterpillar, in an emailed response.

Chevron Corp.. CVX, +0.70%
CVX, +0.70% Chevron is projected to report first-quarter results on or about April 24, according to FactSet, after reporting result on April 26 a year ago.
“We are planning to report our earnings following a similar schedule and process as we have done in the past,” said Sean Comey, senior adviser–external affairs at Chevron....

Capital Markets: "Hemorrhaging Resumes"

From Marc to Market:
Overview: There is no reprieve for investors. Equities are falling sharply. Nearly all the Asia Pacific markets slumped but Australia. Chinese markets fared better than most, but the Nikkei was off 4.5%, and India was down almost as much in late dealings.

Europe's Dow Jones Stoxx 600 is off more than 3% near midday, led by a sell-off in banks that are suspending dividends and share buybacks. It is giving back the last two days of gains. US share is sharply lower. Yesterday, the S&P 500 gave back half of Monday's gains, and today it is set to give up the other half and more.

Bond markets are quieter, but still, the US and UK 10-year benchmarks are around five basis points lower, while peripheral European bond yields are firmer, with Italy's up five basis points. Core yields are a couple basis points lower. The dollar is extending yesterday's gains, accept against the yen. Emerging market currencies are nearly all on the downside, led by 1.5%-2.0% losses of the Mexican peso and Hungarian forint.
Gold is higher but struggling to reclaim the $1600 handle after giving it up yesterday. Oil is giving back yesterday's gains with the May WTI contract hovering near $20 a barrel.

Asia Pacific
The news from Asia was mixed.
China's Caixin manufacturing PMI, like the official measure, moved back above the 50 boom/bust level. Taiwan may have been the only other one in the region to report above 50 for the manufacturing PMI (50.4). Other news from the area was poor. South Korea's manufacturing PMI fell to 44.2 from 48.7, and March exports slipped by 0.2% (economists had forecast an increase).

Japan's Tankan survey showed deterioration of sentiment that was a little less than forecast.
Of note, capex plans were slashed to 1.8% from 6.8%. The March manufacturing PMI was in line with the flash report at 44.8 down from 47.8 in February. Note that Japan's manufacturing PMI has not been above 50 since last April. Separately, the BOJ reduced the amount of the 3-5 year bonds it bought today, which had been anticipated as they increased the frequency of their purchases. The Abe government is putting together a fiscal package that is expected to be around 10% of GDP in the next week or so....

Tuesday, March 31, 2020

"How the coronavirus crisis is affecting food supply"

I'm guessing there won't be a lot of people in the West losing weight.
From Reuters, March 26:
Like other parts of the global economy, food supply chains have been disrupted by the coronavirus pandemic and empty supermarket shelves have become a symbol of the crisis.

Panic buying in some countries has led to some grocery staples like pasta and flour being sold out in supermarkets in recent weeks. Retailers say they are able to replenish most products while bakery and pasta firms in Europe and North America have cranked up production.

Food firms say panic purchases are subsiding once households have stocked up and as they adjust to lockdown routines.

However, shoppers may have to get used to less varied or more local food offerings.
Logistical snags from closed borders to reduced workforces are putting strain on usual supply routes, particularly for fresh produce.

With many planes grounded and ship containers hard to find after the initial coronavirus crisis in China, fruit and vegetable suppliers in Africa warn they are struggling to send goods to Europe.
In Kenya, the recent lockdown measures in China curbed shipments of imported fish, providing a boost to local fishermen but raising the risk of a supply shortage.

Prices of agricultural commodities have been volatile as traders have reacted to specific consequences for their sector while also being influenced by dramatic moves in share and oil prices....

Natural Gas: U.S. LNG Giant May Cut Production (LNG)

From Bloomberg via gCaptain:

U.S. LNG Behemoth Tests Slump in Sign it May Curb Production
One of the world’s biggest liquefied natural gas exporters is signaling it may throttle back production.
Cheniere Energy Inc. has tendered to buy six shipments for delivery to Europe later this year, a rare step for a company that’s fundamentally a seller of the fuel. The company could be testing the size of the current glut as it weighs output cuts, or even seeking cargoes for its customers that could be cheaper than producing and shipping its own from the U.S. Gulf Coast, according to a Bloomberg survey of traders.

Four of the six cargoes were awarded at a discount of about 20 to 30 cents to the European benchmark Dutch Title Transfer Facility, according to traders with knowledge of the information. The benchmark contract for May traded at about $2.24 per million British thermal units on Tuesday on ICE....MUCH MORE
Having been cut in half ($66 to $33) since January 17 the insiders have been nibbling at the stock:

3/9/2020 Neal A Shear Director Buy 3,750 $37.28 $139,800.00 23,860   
3/5/2020 Donald F Robillard Jr Director Buy 2,000 $46.96 $93,920.00 30,121   
3/5/2020 Jack A Fusco CEO Buy 21,000 $47.34 $994,140.00 703,814   
2/27/2020 G Andrea Botta Director Buy 5,500 $45.67 $251,185.00 56,488