The coronavirus pandemic weakens gradually throughout the world and many countries and industries are little by little returning to life. However, the influence of СOVID-19 affected all sectors, causing changes.
International Energy Agency supported oil quotes
On May 14, the International Energy Agency (IEA) published a new forecast for the oil market in 2020. The agency expects a drop in demand of 8.6 million barrels per day, rather than 9.3 million barrels, as previously forecasted. IEA experts believe that pandemic weakens and due to this a gradual relaxation of restrictions on movement will accelerate the restoration of demand in the oil market.
According to the agency, by the end of May, 2.8 billion people worldwide will be under various restrictions due to coronavirus. At the peak of restrictive measures, this number reached 4 billion people. The forecast of the agency had a positive effect on oil prices. On the morning of May 15, the cost of the July Brent futures surpassed the $ 32 mark.
The US authorities nevertheless went to meet Tesla in a conflict that erupted around the resumption of the company’s production. The Alamida County Health Department due to the fact that pandemic weakens allowed the automaker to fully start production from May 18.
Tesla’s Fremont plant was closed due to quarantine. The assembly of cars was suspended on March 23. It was supposed that he would start working in April, but the district extended quarantine measures, after which the head of Tesla, Elon Musk, went to court, announced the opening of the production contrary to the ban, and even threatened to transfer the enterprise to another state. US President Donald Trump intervened in the situation, writing on Twitter that the authorities should allow Mask to resume the company.
Goldman Sachs may merge with Wells Fargo.
On Wall Street, a wave of consolidation is expected in the US banking sector as soon as the COVID-19 pandemic ends. But this deal has few prospects. A possible merger of two US banks from the four largest US financial companies was reported by Fox Business. Goldman Sachs can merge either with Wells Fargo or with one of the other financial companies, including U.S. Bancorp, PNC Bank, BlackRock, and American Express.
Why is Goldman Sachs needs another bank? The conglomerate focuses primarily on working with institutional clients, that is, funds, brokers and other financial organizations. The bank provides a range of services to them – from trading in securities to placing shares on the stock exchange. Such a bank is called an investment bank. Goldman Sachs has never worked with retail customers since its founding in 1869. An exception can be considered large private investors, to whom the bank provides services for the management of their assets.
But now Goldman Sachs can change its principles and change its image. In terms of profit indicators, the bank in recent years has become much inferior to competitors. A financial company is experiencing a decline in revenue from a dominant business – securities trading. Goldman Sachs capitalization does not reach $ 60 billion now, while the market value of its closest competitor, investment bank JP Morgan, exceeds $ 267 billion.
Now, when the coronavirus pandemic actually stopped the conclusion of any transactions, the need to merge an investment bank with a large commercial bank has become even more urgent. In the midst of the COVID-19 epidemic, it was also apparent that the business was moving beyond the multimillion-dollar New York, whose business activity was completely paralyzed.
And that is why there may not be a merger with Wells Fargo. The deal with Wells Fargo makes strategic sense – an investment bank combined with a commercial bank will be a formidable competitor to JP Morgan, analysts say. At the same time, a number of experts consider the merger unrealistic. Pandemic weakens and the deal is becoming less relevant, while JP Morgan analyst Vivek Junidge is confident that it is not feasible. He refers to the restrictions on increasing Wells Fargo’s net assets that were set by the Federal Reserve in 2018 after a major scandal involving credit card fraud.
In addition, there are restrictions on merging banks, which account for more than 10% of the US deposit market share. According to the expert, Wells Fargo exceeded this limit. According to Junige, numerous legal and regulatory violations of Wells Fargo, as well as recent regulatory accusations, will prevent anyone from entering into transactions with Wells Fargo. On May 14, following the Fox Business announcement of a possible merger, Wells Fargo shares jumped 6.8%, while trading during the post-market rose another 1.6%.
NYSE will return traders: the New York Stock Exchange will open a trading room in late May
In turn, the New York Stock Exchange, which closed the trading floor at the end of March after the detection of coronavirus infection in some employees, plans to partially return them to work two months later. Due to the fact that pandemic weakens, on May 26, the New York Stock Exchange will again open its trading platform for stock brokers, NYSE President Stacy Cunningham told The Wall Street Journal.
Some traders will be able to return to work subject to the new safety rules. To get on the stock exchange, they will have to abandon the use of public transport in New York, wear masks and follow the rules of social distance.
In addition, all visitors will be checked the temperature at the entrance to the building. Those who do not pass the check will not be allowed to exchange until they receive a negative result on COVID-19 or quarantine in accordance with the requirements in the country. Employees will only be allowed into the trading room, and the rest of the building will remain virtually empty.
The New York Stock Exchange has completely switched to electronic trading since March 23 after coronavirus infection was detected in some employees. Many of them took equipment with them in order to work remotely.
Stacy Cunningham said that stringent security measures on the exchange will weaken as the situation in the city improves, but may become more stringent if the spread of the virus begins to increase again.
The Asian Development Bank predicts a loss of $ 8.8 trillion. from the COVID-19 pandemic
Despite the positive trends in easing the pandemic, Asian Bank experts suggest that the coronavirus epidemic will cause damage in the amount of 10% of global GDP. At the same time, the Asian Development Bank noted that if the quarantine lasts for a period of three months, along with strong political decisions, it will be able to limit the impact of the pandemic to $ 4.1 trillion, or 4.5% of global GDP.
The Asia-Pacific region will account for about 30% of the total decline in world production, despite the fact that pandemic weakens. In addition, globally, between 158 and 242 million jobs could be lost 70% of which are workers from Asia, the Asian Development Bank said.
A mitigation of the economic impact of the pandemic by 40% is possible if the health system is improved along with the protection of income and employment introduced by states. Salaries will also decline worldwide, especially in the US and Europe due to reduced consumption and investment. Also, restricting tourism to prevent the spread of coronavirus could lead to a reduction in world trade of $ 1.7 trillion.