Gerald Fitzgerald’s Market Review May 5th

LAST WEEK IN 30 SECONDS...

Markets fluctuated last week with early gains largely offset by a market sell off on Friday. The US Federal Reserve reiterated their support for the US economy and continued efforts to control the spread of Covid-19 saw markets trend upwards. Friday turned more ominous, however, as Donald Trump ripped the plaster off Chinese relations with assertions they knew far more about the origins and spread of the virus than western governments were lead to believe. Global equities finished the week down -0.6%.

Elsewhere, the ongoing issues of where to store built up supplies of oil saw some marginal relief last week with Brent Crude and WTI up over 20% on the week.

THIS WEEK IN 30 SECONDS...

The collateral damage from Covid-19 takes as much limelight as the virus itself, with investor focus shifting to the quantification of the virus’ damage to economic growth along with assessing the deteriorating relations between the US and China.

With market liquidity stabilising, wider corporate solvency is drawing investors’ attention.

The week ahead sees another raft of earnings announcements with over 4,000 companies providing updates including Walt Disney on Tuesday. With amplified uncertainty for corporate earnings for the rest of 2020, investors will look more generally on businesses’ cash drain to assess the extent of their resilience to navigate these short-term unchartered waters.

TESLA TWEET MAXIMISES SHAREHOLDER VALUE IRE

It is rare to see a Chief Executive complain that the valuation of their company is too high but that is exactly what Elon Musk did. Not being one to shy away from the media, Musk’s tweet on Friday saw Tesla’s share price fall more than 10% to finish the day just above $700.