Texas Leads the Nation in Reopening Its Economy

Author: Frank Holmes
Date Posted: May 1, 2020 Read time: 58 min

Today is "reopening" day for Texas, home state of U.S. Global Investors. Restaurants, retail stores and malls can now open their doors to customers again, so long as occupancy is kept at 25 percent of what it normally would be. In metropolitan areas such as San Antonio, social distancing and masks are still required in public places.

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

Texas opened for business

Today is “reopening” day for Texas, home state of U.S. Global Investors. Restaurants, retail stores and malls can now open their doors to customers again, so long as occupancy is kept at 25 percent of what it normally would be. In metropolitan areas such as San Antonio, social distancing and masks are still required in public places.

If everything works out well and we don’t see a massive spike in new COVID-19 cases, then bars, salons, barbershops, gyms and more could be next to reopen later this month.

This is all very positive for the state and local economies, especially San Antonio’s. Hundreds of thousands of people work in the city’s important travel and hospitality industry, which contributes some $15 billion to the San Antonio economy every year. Many of you reading this may have visited the River City to stroll down the beautiful River Walk, take in the historic San Antonio Missions—named a UNESCO World Heritage site—or enjoy the Battle of Flowers Parade during Fiesta.

And for those who haven’t yet, I highly recommend you make it a point to visit San Antonio—once you feel that it’s safe, of course.

Coincidentally, the Transportation Security Administration (TSA) reported a big jump in the number of daily commercial air passengers this week. From April 29 to 30, the number of people the agency screened in the U.S. rose by 35,000, or 30 percent, to 154,695 people. That’s still 2.3 million below where we were a year earlier, but I see the increase as an encouraging sign that we’re past the bottom.

number of daily U.S. commercial air passengers jumped at the end of April
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The experience of commercial air travel has not returned to “normal,” of course. Most major airlines, including American, Delta and United, now require masks be worn, even though the average number of passengers on domestic flights stands at only 17.

New Screening Technology Post-COVID-19

Air travelers have had to adapt to change before. The 9/11 terrorist attacks gave us TSA and lengthened wait times to board planes—though that time has been dramatically reduced thanks to PreCheck. We’re now accustomed to taking off our shoes and leaving our cans of shaving cream at home.

It’s possible that, even in a post-COVID-19 world, all passengers will need to undergo a health screening of some kind before boarding. That’s the plan, at least, for Etihad Airways, a United Arab Emirates (UAE) carrier, which has partnered with Australian tech firm Elenium Automation to develop technology that can monitor passengers’ temperature, heart rate and respiratory rate. If any irregularities are detected, staff will be alerted to assess the situation.

What if there was a way to “zap” the virus before it had a chance to infect someone? A company here in San Antonio believes it may have figured out a way to do just that. Xenex Disinfection Services announced this week that it has developed a robot that can shoot out ultraviolent pulses “more intense than sunlight,” according to a press release. In under two minutes, these pulses can “kill” the SARS-Cov-2 coronavirus, responsible for causing COVID-19, on public surfaces such as walls, doors and tables.

Putting Things in Perspective

State reopenings are happening at a time when newly released data show that the coronavirus is not nearly as lethal to most people as initially thought. Please know that I don’t mean to downplay the risk. It’s highly infectious, and we should all remain smart and cautious as we await a vaccine and better treatments.

Those in high-risk categories—65 and over, underlying conditions—should be extra cautious.

Be that as it may, I believe Texas and other states are making the right choice by safely reopening certain businesses so working-age people can return to work and bring back a level of normalcy to their lives. The truth is that younger, healthier people are statistically far less likely to run into serious problems should they happen to contract the disease.

Below is a chart illustrating coronavirus data provided by the Massachusetts Department of Public Health. What it shows is that the likelihood of dying from COVID-19 was greatly dependent on the person’s age. People 80 and over were most at risk, those between 70 and 79 less so, those between 60 and 69 even less so, and so on. Again, this data includes cases just in Massachusetts, but I believe it’s reflective of the U.S. as a whole.

deaths and death rate by age group in massachusetts
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As of April 30, more than 2,200 residents of Massachusetts 80 years and older had died as a result of complications from COVID-19. Octogenarians, then, had a death rate per 100,000 people that was 4.7 times higher than those aged 70 to 79, 18.5 times higher than those aged 60 to 69, and 60 times higher than those aged 50 to 59. 

The average age of people who died in confirmed COVID-19 cases, in fact, was 82.

Meanwhile, the coronavirus contributed to the deaths of “only” 40 young people aged 49 and below. People in this age bracket represented just 1.1 percent of total deaths in Massachusetts related to the virus. Even one death is one too many, but it’s important to keep things in perspective.

Looking Ahead to Second-Quarter Earnings

A little over half of S&P 500 companies have now reported first-quarter earnings. Although there have been some exceptions (Tesla, Clorox and Colgate-Palmolive among them), earnings beats are down, as expected. FactSet estimates that, once all companies report, earnings may have fallen 13.7 percent compared to the same quarter a year earlier, which would be the largest such decline since the third quarter of 2009. What’s more, as many as 30 S&P 500 companies have withdrawn guidance for fiscal year 2020.

The second quarter is almost certain to be worse, especially now that approximately 30 million Americans have filed for jobless benefits. In April, consumer spending plunged 7.5 percent versus spending in March, marking the worst month-to-month change on record. For comparison’s sake, personal consumption expenditures (PCE) decreased 1.4 percent in September 2011, due to 9/11, and the same rate in November 2008, during the global financial crisis.

deaths and death rate by age group in massachusetts
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Several big-name retailers are expected to or in danger of declaring bankruptcy in the coming weeks and months due to the economic downturn. These include Neiman Marcus, JCPenney, Macy’s, Ascena Retail (owner of Ann Taylor, LOFT and Lane Bryant) and Gap Inc. are on analysts’ watch lists.

In the second quarter, as was the case in the first quarter, gold mining stocks are set to shine on higher metal prices, which should translate to higher revenues and free cash flow. Last week I shared with you a list of gold producers that could be the most profitable on higher gold prices.

Stay safe and have a wonderful weekend!

Curious to learn more about the gold market? Click here to see my interview with Kitco News’ David Lin!


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Gold Market

This week spot gold closed at $1,700.42, down $29.18 per ounce, or 1.69 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week lower by 1.92 percent. The S&P/TSX Venture Index came in up 2.26 percent. The U.S. Trade-Weighted Dollar fell 1.32 percent.

Date Event Survey Actual Prior
Apr-27 Hong Kong Exports YoY -10.0% -5.8% 4.3%
Apr-28 Conf. Board Consumer Confidence 87.0 86.9 118.8
Apr-29 Germany CPI YoY 0.7% 0.8% 1.4%
Apr-29 GDP Annualized QoQ -4.0% -4.8% 2.1%
Apr-29 FOMC Rate Decision (Upper Bound) 0.25% 0.25% 0.25%
Apr-30 Eurozone CPI Core YoY 0.7% 0.9% 1.0%
Apr-30 ECB Main Refinancing Rate 0.000% 0.000% 0.000%
Apr-30 Initial Jobless Claims 3500k 3839k 4442k
May-1 ISM Manufacturing 36.0 41.5 49.1
May-4 Durable Goods Orders -14.4% -14.4%
May-6 ADP Employment Change -20000k -27k
May-7 Initial Jobless Claims 3000k 3839k
May-8 Change in Nonfarm Payrolls -21500k -701k


  • The best performing metal this week was platinum, off slightly by 0.32 percent, with investors increasing their bullish platinum outlook to the highest in three weeks. Retail investors can’t get enough of gold coins. Consumers typically pay a little more for gold coins than the per-ounce prices quoted on financial markets in London and New York. That premium has surged to $135, more than tripling from two months ago, according to Argent Asset Group LLC. As 2019 saw the lowest gold coin and bar demand since 2009, this year demand has surged amid the coronavirus. The Perth Mint reported sales totaled 120,504 ounces in April and that gold coin sales were the highest ever.
  • Gold performed strongly in April overall. The metal traded near the highest since 2012 on Wednesday after the Fed voiced concern that the pandemic could leave permanent scars on the U.S. economy, reports Bloomberg. Additional liquidity thanks to central bank action benefited gold in the month of April after struggling in March from a selloff.
  • Ghana still plans to move forward with the sale of $750 million of shares in a gold mining fund this year. The top gold miner in Africa will list the fund in London and will pay dividends from the government’s income from mining operations. Finance Minister Ken Ofori-Atta said that “coronavirus makes things difficult but we will not relent.”


  • The worst performing metal this week was palladium, down 5.71 percent as investors cut their net bullish position to a five-week low; Norilsk Nickel cautioned the palladium market could go into surplus with stalled automobile sales. Gold had its biggest weekly decline since mid-March as major economies are slowly reopening. European nations offered cautious signals that they have moved past the worst of the coronavirus outbreak. Bloomberg notes that U.S. cases of the virus rose at the slowest pace. The European Central Bank increased its coronavirus response by cutting funding costs for banks, but refrained from boosting its bond-buying program, reports Bloomberg.

gold slips after ecb moves signs pandemic spread may be easing
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  • Gold consumption in China fell 48 percent to 148.63 tons in the first quarter, according to the China Gold Association. Buying in the world’s top consumer was hampered by closed shops and higher metal prices. Inflows into commodity ETFs slowed last week by 55 percent to just $1.9 billion. However, precious metals ETFs led the inflows with $1.3 billion.
  • The global silver surplus is expected to more than double in 2020 as falling demand outweighs mine shutdowns, according to CPM Group. Supply is expected to surpass demand by 78.9 million ounces, compared to a surplus of 36.2 million in 2019. “While supply disruptions themselves would have been extremely positive for metals prices in another environment, the same factors that are causing supply disruptions are also resulting in less demand for silver for use in fabricated products.”


  • UBS raised its second quarter-end price forecast for palladium to $2,300 an ounce, up from $2,000. The group expects a supply deficit to continue in 2020 of 500,000 ounces, compared with almost 1.2 million ounces in 2019.
  • State Street Global Advisors is bullish on gold. The group says gold will trade between $1,700 and $1,800 an ounce for the next few weeks due to lower interest rates and expectations that fiscal stimulus will weigh on the U.S. dollar, reports Bloomberg.
  • Silvercorp Metals is buying Guyana Goldfields for a 71 percent premium – giving the company diversified exposure to precious metals. MAG Silver announced a private placement with Eric Sprott for over C$60 million. The company will use the net proceeds of the offering to fund exploration and development. Newcrest Mining Ltd., Australia’s largest gold producer, plans to raise as much as $720 million in cash to accelerate growth at a key mine in Ecuador.


  • First quarter earnings for miners aren’t a sure bet even with gold prices higher. Gold prices were up about 20 percent from the first quarter a year ago, but companies are still dealing with operation shutdowns and supply chain disruptions due to the coronavirus. Bloomberg’s Aoyon Ashraf writes that investors shouldn’t be fooled by gold’s rally. CIBC’s Anita Soni says that operational results will likely be “mixed and messy” and that estimates are less meaningful given the recent disruptions.
  • Bloomberg’s Eddie van der Walt writes that an ounce of silver has never been this cheap relative to gold and that as long as the coronavirus batters economies, there’s nothing to stop the ratio from moving higher. Although silver is moving closer to a supply and demand balance, the years of oversupply still have to be soaked up by markets before it can rally on fundamentals.
  • The central bank gold buying spree could slow in 2020 as the coronavirus ripples through global economies and creates a cash crunch, reports Bloomberg. Russia announced in April that it has paused its domestic gold buying. Standard Chartered Plc expects net purchases to drop to 360 tons from last year. The World Gold Council doesn’t expect central banks to become net sellers, but that demand will likely decline this year.

Index Summary

  • The major market indices finished mostly down this week. The Dow Jones Industrial Average lost 0.22 percent. The S&P 500 Stock Index fell 0.21 percent, while the Nasdaq Composite fell 0.34 percent. The Russell 2000 small capitalization index gained 2.22 percent this week.
  • The Hang Seng Composite gained 3.46 percent this week; while Taiwan was up 6.23 percent and the KOSPI rose 3.10 percent.
  • The 10-year Treasury bond yield rose 1 basis point to 0.614 percent.

Domestic Equity Market

SP 500 Economic Sectors weekly performance
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  • Energy was the best performing sector of the week, increasing by 2.94 percent versus an overall decrease of 0.21 percent for the S&P 500.
  • Norwegian Cruise Line was the best performing S&P 500 stock for the week, increasing 27.44 percent.
  • Facebook’s stock soared10 percent in after-hours trading on Wednesday, after the company announced surging user numbers and better-than-expected financial earnings for the first quarter. In the first three months of the year, Facebook netted $17.74 billion in revenue, up 18 percent year-over-year, reports Business Insider, though it says it experienced a significant drop in advertising demand.


  • Utilities was the worst performing sector for the week, decreasing by 4.28 percent versus an overall decrease of 0.21 percent for the S&P 500.
  • Cincinnati Financial Corp was the worst performing S&P 500 stock for the week, falling 22.39 percent.
  • Shell slashed its dividend for the first time since the Second World War on Thursday, cutting shareholder payments by 67 percent. Business Insider writes that as coronavirus torpedoes demand for commodities and shatters the oil-producing industry, this is the latest sign of the brutal crisis decimating the oil industry.


  • Microsoft reported third-quarter earnings on Wednesday, reporting $35 billion in revenue and $10.8 billion in net income. The company’s overall commercial cloud business reached $13.3 billion in sales for the quarter, up 39 percent year over year.
  • Alphabet’s first quarter earnings show that Google Cloud generated nearly $2.8 billion in revenue this quarter, surging 52 percent from a year ago. Analysts have said that they expect demand for cloud services to increase during the coronavirus pandemic as remote work becomes more widespread.
  • Boeing Co. is selling $25 billion of bonds in the largest offering this year, reports MSN, as the company comes off of one of its worst quarter on record with the coronavirus upending the global aviation industry. The airplane manufacturer is burning through the most cash it ever has with travel at a standstill.


  • Apple’s revenue growth came to a halt in the first three months of the year, “as the coronavirus pandemic shuttered its retail stores, dampened consumer demand for iPhones and rattled the company’s global manufacturing operations,” writes Business Insider. The company’s fiscal second-quarter revenue of $58.3 billion is up less than 1 percent from the same period one year ago.
  • The U.S. House Committee on Transportation and Infrastructure opened an inquiry into Carnival Corp.’s handling of the Covid-19 outbreaks that have resulted in more than 1,500 confirmed cases of the novel coronavirus aboard its cruise ships, writes Bloomberg, as well as dozens of passenger and crew deaths.
  • Softbank is taking a $6.6 billion hit on its WeWork investment, reports Reuters. It is entangled in a legal dispute with directors at WeWork after backing out of a $3 billion tender offer agreed when it bailed out the office-sharing firm following a flopped IPO attempt last year.

The Economy and Bond Market



  • The Federal Reserve widened a key program to nurse the “Main Street” economy through the coronavirus pandemic, agreeing to lend to even larger firms, taking on more risk in participation with banks, and hinting at some form of dedicated help for non-profits. The central bank said it would open its “Main Street Lending Facility” to companies with up 15,000 employees and $5 billion in revenue compared to an initial program limited to those with 10,000 workers and $2.5 billion in revenue when it was announced on April 9. The size of the program will remain the same for now with $600 billion in loans available.
  • U.S. construction spending edged up 0.9 percent in March as building activity escaped the early impacts of the coronavirus shutdowns. The Commerce Department said that the increase followed a 2.5 percent drop in spending in February.
  • Federal Reserve officials on Friday stressed they were thinking about more and innovative ways to help the economy and not about pulling back support. St. Louis Fed President James Bullard told the Wall Street Journal the central bank would be offering support to the economy as long as needed. Richmond Fed President Thomas Barkin said the Fed had more work to do to help the economy recover.


  • Millions more Americans filed for unemployment benefits last week, sending the six-week total above 30 million since the coronavirus pandemic began. Initial jobless claims totaled 3.84 million in the week ended April 25. While filings remain at levels unseen before the crisis, it’s the fourth week that the pace has decelerated, suggesting that the worst of the labor-market hit may have already occurred.

claims for us unemployement benefits post sixth straight week in millions
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  • Gross domestic product fell 4.8 percent in the first quarter. Economists surveyed by Dow Jones had expected the first estimate of GDP to show a 3.5 percent contraction. This marked the first negative GDP reading since the 1.1 percent decline in the first quarter of 2014 and the lowest level since the 8.4 percent plunge in Q4 of 2008.
  • Consumer confidence plunged in April as millions lost their jobs and there was an unprecedented deterioration of an index that monitors their attitudes about current business and work conditions. The Conference Board said Tuesday that its confidence index tumbled to a reading of 86.9, the lowest level in nearly six years and down from 118.8 in March.


  • Bill Gates thinks there are eight to 10 promising coronavirus vaccine candidates and one could be ready in as little as nine months. There are more than a hundred coronavirus vaccines in the works.
  • House Speaker Nancy Pelosi said Thursday states and cities alone are seeking as much as $1 trillion in aid in the next coronavirus relief package, a figure that may be tough to reach as Congress juggles demands to bolster the economy. Pelosi said state governments are still finalizing their request but have so far sought $500 billion, while local governments have a similar figure.
  • The U.K. is testing using drones to deliver urgent medical supplies and equipment as part of the fight against COVID-19. Under a trial that starts this week, an autonomous drone will carry personal protective equipment from three hospitals in Hampshire, a county in southern England, to a hospital on the Isle of Wight, an island off England’s south coast, and back again.


  • The unemployment rate is set to surge from 4.4 percent in March, when 701,000 people lost their jobs in the non-farm payrolls report, to 15.1 percent.
  • Treasury Secretary Steven Mnuchin said states that had poorly managed budgets before the Covid-19 outbreak sent their economies reeling should not be rescued by the federal government. “This isn’t just going to be a federal bailout of the states,” Mnuchin said early Tuesday on CNBC.
  • State tax revenue in the coming fiscal year is poised to be about $160 billion less than it was in 2019 due to the deep economic slowdown caused by the coronavirus, according to a report by Moody’s. Unless states raise taxes, they are unlikely to see a recovery to 2019 levels for years, analysts led by Marcia Van Wagner wrote.

Energy and Natural Resources Market



  • The best performing commodity for the week was crude oil, up 16.77 percent. Crude oil finally saw a weekly gain, rising as high as $20 a barrel on Friday, after U.S. oil companies announced major production closures. Bloomberg notes that the OPEC+ pledge to cut supply by 9.7 million barrels a day has gone into effect.

WTI extended gains on optimism around production cuts and demand
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  • Copper had its biggest monthly gain since 2017 as markets rally on hopes that major economies will start to reopen and bounce back from coronavirus lockdowns. The commodity rose 6 percent in April and is often seen as a gauge of economic and manufacturing health. Markets rose on Wednesday after Gilead Sciences Inc. said positive data had emerged from the trial of its potential treatment for the coronavirus. Iron had a positive week after top producer Fortescue Metals Group said demand for steelmaking in China remains firm. CEO Elizabeth Gaines said in a Bloomberg TV interview that “we are seeing steel inventories start to decrease and we are seeing very strong demand for iron ore.”
  • Australia is making big strides toward becoming a major supplier of hydrogen fuel. The country’s biggest hydrogen plant will break ground in June after securing funding and will produce 25 tons of hydrogen a day using electricity from wind and solar plants by the end of 2022, reports Bloomberg. Last November, Australia laid out a plan for a billion-dollar-plus export industry.


  • The worst performing commodity for the week was wheat, down 2.64 percent as wet weather in the U.S. Midwest and now strong rainfall in Europe and the Black Sea are likely to increase the seasonal yield of the harvest. Although the price of oil had a good week, there was still plenty of negative news. Oil fell on Monday after the biggest oil ETF said it would sell out of its June WTI futures. South Korea ran out of commercial storage space for oil and the world is still grappling with where to store the glut of crude. Exxon Mobil froze its dividend for the first time in 13 years and is expected to post the lowest quarterly income since 1989. Royal Dutch Shell Plc also cut its dividend for the first time since at least the Second World War, according to Bloomberg.  The number of rigs drilling for oil and gas fell nearly 20 percent in April. Oil companies globally are making big layoffs and announcing reductions in capital spending.
  • Caterpillar Inc., the world’s biggest maker of mining and construction equipment, is predicting that the coronavirus downturn is far from over. CEO Jim Umpleby said “the impact of COVID-19 on our business has been significantly more severe and chaotic than any cyclical downturn we had envisioned.” The company shelved its earnings forecast for 2020.
  • U.S. Steel Corp., one of the biggest steelmakers, said it expects to lay off 2,700 employees as the coronavirus idles most of its blast furnaces, reports Bloomberg. Steelmakers are a heavy fixed-cost business and due to limited production volume they must take quick action to cut costs.


  • BHP Group, the world’s largest mining company, said that it is ready to seize on acquisition opportunities if rivals come under pressure due to the pandemic. CEO Mike Henry says that the company’s balance sheet is in a place that would allow major purchases. Bloomberg notes that BHP has not had any sizable purchases since 2011.
  • Solar and onshore wind power are now the cheapest new sources of electricity in a least two-thirds of the world’s population, according to a new report by BloombergNEF. The levelized cost of onshore wind projects has fallen 9 percent to $44 a megawatt-hour since the second half of 2019 and solar declined by 4 percent to $50 per megawatt-hour.
  • According to Mecuria Energy Group, the price of oil has likely bottomed out as U.S. producers are cutting more production in May. The U.S. will cut around 2 million barrels a day of output. CEO Marco Dunand said in an interview with Bloomberg that “when you have $10 oil, producers don’t like producing” and “at some point reality has to come into the picture.” Brazil is confident that demand for oil will soon return to normal levels from China, which should also help the price of oil. Petrobras, Brazil’s state-controlled oil giant, cut production in late March and has since boosted production back. The company released a report on Monday saying that it is confident its sales to China will rise as factory activity increase.


  • The U.S. is facing a meat shortage as nearly a million fewer cattle, hogs and sheep were processed in the last week than were the same time a year ago. Meatpacking facilities have seen a large number of coronavirus infections with at least 4,400 workers ill across 80 plants. Shoppers will likely see less meat on grocery store shelves until processing capacity is back to normal levels. With plants closed, farmers have had to put down animals. President Trump signed an executive order this week aiming to keep meat processing plants open.
  • Coal is the biggest loser from the global slump in electricity demand due to coronavirus shutdowns. Coal’s share of power generation in the U.S. fell more than 5 percentage points since February and 2 percentage points in Europe. China and India, which still heavily use coal, are also seeing coal lose market share because gas and renewables can often times be cheaper. Hannah Newstadt, power market analysts for Genscape Inc., says that the pandemic is “accelerating coal’s demise.”
  • The global LNG market glut is likely to last through the middle of the decade, according to a report by the International Gas Union. “New liquefaction capacity added in 2019 is expected to prolong excess supply in the global LNG market into the mid to late 2020s, well beyond the 2022-2023 forecast of just a year ago.” Bloomberg reports that production capacity is still rising even during a massive oversupply of the market due to investments in projects made years ago.

Emerging Europe



  • Hungary was the best performing country this week, gaining 6.7 percent. The country opened its borders to business travelers from Poland, the Czech Republic, Korea, Germany, Austria and Slovakia. OTP Bank was the best equity trading on the Budapest Stock Exchange, gaining 13.6 percent over the past five days. Shares of OTB declined by 50 percent this year, however, the stock price may recover with optimism around easing COVID-19 restrictions.
  • The Hungarian forint was the best performing currency this week, gaining 2.3 basis points. The currency recovered last week’s losses when the central bank announced its bond-buying program. The bank will buy government bonds and mortgage notes, primary with maturities of at least three years, on the secondary market, for as long as its sees fit. It will review the bond program after it reaches 1 trillion forint ($3.1 billion), which may happen in two to three months.
  • Consumer discretionary was the best performing sector among eastern European markets this week.


  • Romania was the worst relative performing country this week, gaining 80 basis points. Moody’s Investors Service revised Romania’s outlook to negative last week, placing its score at the same level with Fitch Ratings and S&P Global Ratings. A downgrade would push Romania back into junk status. SC Fondul Proprietatea SA was the weakest equity trading on the Bucharest Stock Exchange, losing 2.2 percent in the past five days.
  • The Russian ruble was the worst performing currency in the region this week, losing 1.2 percent. The currency had a volatile week strengthening in the first three days and selling of Thursday and Friday on thin holiday trading. Most of Europe was closed May 1, celebrating Labour Day. The price of Brent crude oil gained 23 percent over the past five days, and once again, we saw the historically strong oil/ruble correlation breaking off.
  • Materials was the worst performing sector among eastern European markets this week.


  • Countries around the globe continue to stimulate their economies and central emerging Europe provides more stimulus as well. Hungary’s central bank kept its main rate unchanged at 90 basis points but may start limitless asset purchases next week. Poland sold 16.3 billion zloty ($3.9 billion) of bonds, as a source of funding for businesses. Morgan Stanley predicts that Russia could cut its main rate by another 50 basis points in June and July, bringing the rate to 4.5 percent.
  • Slovakia, a country of 5.5 million, closed its schools, shops and borders earlier than any other country after Italy. Implementing quick measures worked; six weeks after the first reported infection, Slovakia has just 18 fatalities and is at the bottom of the European list of deaths per capita, according to data compiled by John Hopkins University, as of April 26. Poland, Hungary and the Czech Republic have very low fatality rates as well. Countries who manage the coronavirus better may be able to reopen their economies sooner.

eastern europe has handled pandemic better than richer peers
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  • This week the European Central Bank (ECB) left its main rates unchanged and kept the pandemic bond buying program at 750 billion euros, but pointed out again that the bank is ready to increase its asset purchase amount if needed. The ECB provided once again more liquidity by expending its program of cheap loans to the banking sector. In addition, it lowered the interest rate that banks can borrow at to negative 1 percent, meaning the bank will be paid 1 percent when taking money from the ECB.


  • The eurozone first-quarter GDP fell 3.8 percent quarter-on-quarter, the biggest slump since World War II and in line with consensus. French output tumbled 5.8 percent; Spain’s hit was 5.2 percent and Italy’s 4.7 percent. Euro-area inflation slowed to 0.4 percent in April from 0.7 percent the previous month. ECB President Christine Lagarde said that the eurozone economy may shrink as much as 12 percent this year.
  • Russian Manufacturing PMI fell to 31.3 in April, down from 47.5 in March, below the estimated drop to 40.5. This is the lowest reading since records began in 1997. A partial lockdown imposed late last month has been extended to May 11. Russia started to report coronavirus cases late compared to other European countries and it may be one of the last ones reopening its economy. The International Monetary Fund forecast a 5.5 percent contraction in the Russian economy this year, about double the rate it expects for the world as a whole.
  • Russia, Ukraine, Germany and France held a video conference this week discussing a six-year conflict between neighboring Russia and Ukraine. Russian Foreign Minister Sergei Lavrov told reporters only one of nine points have been resolved (partially), the prisoner exchanges. The presidents of Russia and Ukraine had agreed to gather again to discuss holding elections in the disputed Donbas region, but an end to the conflict in the region is far away and sanctions on Russia will most likely stay for a long time.

China Region



  • India was the best performing country this week, gaining 7.6 percent. The Indian government proposed to provide up to 100 percent credit guarantees for loans given to small businesses by financial institutions. Small businesses account for nearly a quarter of India’s $2.9 trillion economy and employ more than 500 million workers. Tata Motors was the best performing equity among stocks trading in the NSE Nifty50 Index, gaining 26 percent over the past five days.
  • The Indonesia rupiah was the best performing currency this week, gaining 1.9 percent. The rupiah outperformed regional peers as a rally in Indonesian equities and signs of progress in treating virus infections, bolstered risk appetite.
  • Property and construction names were the best performers among stocks trading on the Hong Kong Stock Exchange.


  • Vietnam was the worst performing country this week, losing 1 percent. Weaker economic data released this week pushed stocks trading on the Ho Chi Minh City Stock Exchange lower. Saigon Beer Alcohol Beverage was the worst performing equity losing 9.4 percent over the past five days. Retail sales and industrial production plunged and trade deficit widened to USD 0.7 billion in April from USD 0.55 billion in the same month a year earlier. This was the first trade deficit since January, as exports fell more than imports.
  • The Thai baht was the worst performing currency this week, losing 20 basis points. Thailand trade surplus decreased to USD 1.59 billion in March of 2020 from USD 2.10 billion in the same month a year earlier and industrial production fell 9.0 percent year-over-year in March 2020, following a drop of 3.0 percent in the previous month.
  • Healthcare names were the worst performers among stocks trading on the Hong Kong Stock Exchange.


  • Despite the negative impact the coronavirus has had on air travel, the Philippines is still pursuing private and public airport projects. Transport Secretary Arthur Tugade said that the building of 23 airports and 13 railways would continue as planned.
  • Brendan Sobie, an aviation consultant at Sobie Aviation, says that the worst is over for the Chinese airlines. In an interview with Bloomberg TV, Sobie says business travel has resumed slowly domestically, while leisure travel still lags. Sobie added that the combined $2 billion loss in the first quarter for the major Chinese airlines is the worst of it, with second quarter losses not as sharp.
  • Hong Kong announced plans to slowly reopen government offices and some public facilities starting next week. The government has social distancing measures in place until May 7 and has not yet announced plans to extend the date.


  • China’s factory activity unexpectedly dropped in April according to the Caixin/Markit PMI reading. The index of manufacturing activity fell to 49.4 in April, down from 50.1 in March. The 50 mark separates growth from contraction. Reuters reports that analysts had forecast the PMI to rise to 50.3.
  • China’s biggest banks reported a rise in profits in the first quarter, but they are under increasing pressure from rising bad loans. S&P Global forecast that Chinese banks face additional credit costs of $226 billion due to covering bad debt this year. The government has called on state-owned banks to help bail out millions of struggling businesses hurt by the pandemic, reports Bloomberg.
  • More and more Chinese and Hong Kong-listed firms are retaining profits instead of distributing to shareholders via dividends. The number of firms who skipped dividends rose to the highest ever in Hong Kong in the first quarter. This demonstrates the cash crunch many companies are facing amid the coronavirus.

hong kong-listed firms skipping dividends surged in the first quarter
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Blockchain and Digital Currencies



  • Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended May 1 was Infinitus Token, up 879.44 percent. The price of bitcoin rose closer to the $9,000 mark this week, surpassing the $7,000 price range it hovered around last week.

bitcoin climbs back above the $7,000 level
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  • A report published by the World Economic Forum looks at how the deployment of blockchain-based solutions can address the supply chain inefficiencies and failures that have been exposed by the coronavirus pandemic, writes CoinTelegraph. The report details that the efficiency of supply chains relies on transparency, the article explains, advocating for the adoption of distributed ledger technology (DLT) to create “shared truth” among supply chain stakeholders.
  • There’s been a flurry of demand for tether and other dollar-linked stablecoins in digital-asset markets, reports CoinDesk. This month the total outstanding amount of stablecoins surged to nearly $9 billion, led by tether, from less than $6 billion in early March. Some analysts wonder if this surge will also boost the price of ether, which is used to pay fees to help process transactions on the Ethereum blockchain, including for other tokens.


  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week ended May 1 was SOLBIT, down 90.85 percent.
  • Historically, price volatility has been good for crypto exchanges, writes Bloomberg, which make the bulk of their money from trading fees. However, such volatility is proving to be a negative for some exchanges, even with prices rebounding. According to data from Coin Metrics, BitMex, for example, has seen an exodus of about 91,000 bitcoins valued over $700 million, as trades blew up or speculators took funds elsewhere.
  • An article from CoinTelegraph explains that data shows $1,000 intraday surges in bitcoin price often leads to double-digit corrections shortly thereafter. While bitcoin pulled off an incredible rally this week, that doesn’t mean the long-awaited bull market has started. History shows, when the price increased over $1,000 in a single day, it was susceptible to a major correction. As the article continues, the recent surge from $7,700 to $9,400, and the pattern of corrections identified by analysts, suggests a pullback is likely.


  • Bitcoin rose early in the week to hit its highest level since March 12, or “Black Thursday” – as reported by CoinDesk. While a portion of the rally could be associated with the uptick in the S&P 500, the article explains, the popular cryptocurrency looks to have partly decoupled from the equity markets due to the buzz around its upcoming halving.
  • A provider of real-time data analytics for crypto derivatives, known as Skew, has launched a trade execution platform focused on attracting institutional investors entering the cryptocurrency space, reports CoinDesk. The London-based name raised $5 million in funding, led by Octopus Ventures, adding to a $2 million seed round raised in September of last year.
  • Tencent, Chinese social media giant and operator of the app WeChat, has opened applications for its new blockchain accelerator, writes CoinTelegraph. The “Tencent Industrial Accelerator” is open to early-stage and mature blockchain startups, with a total of 30 places available. According to the company’s website, it will focus on a variety of recruitment areas including industrial blockchain solutions and applications for data sharing and supply chain financing.


  • Messaging app Telegram is postponing the launch of its TON blockchain for a second time, reports CoinDesk. The new “go-live” date will be in April 2021. Telegram is offering to return up to 72 percent of each investor’s stake.
  • As reported by CoinTelegraph, China controls more than half of the world’s bitcoin mining operations – upward of 65 percent of the computing power to mine the popular digital currency. Does this mean the Asian nation could take over the bitcoin ecosystem? A recent report “The State of Crypto Mining 2020,” shows that 60 percent of bitcoin owners have a real concern – particularly that China owning so much could result in a disruption to the system, instability to the bitcoin blockchain or even an entire takeover.
  • There are strong arguments for a severe bitcoin drop, reads one CoinTelegraph headline this week. The price of the popular digital currency soared past three major reversal points, hitting $9,400 (the 200-day simple moving average, 200-day exponential moving average, and the 0.618 Fibonacci Retracement). Typically, the coin does not surpass all three resistance areas without any sign of a pullback. When it does, the article reads, it leaves the asset vulnerable to a steep drop as traders look to take profit on their positions.

Airline Sector



  • Although it wasn’t as much relief as expected or wanted, as a part of the $2 trillion coronavirus aid package signed into law on March 27, $25 billion was included in assistance for passenger airlines. Treasury Secretary Steven Mnuchin said that the following airlines plan to participate in the Payroll Support Program: Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines. MarketWatch reports that the aid is primarily meant to help carriers with payroll and go toward paying employees as cash flow dries up from severely reduced air service.
  • According to the Australia Institute, airlines’ carbon emissions could fall by more than a third this year due to reduced flying and travel demand. From February 1 to March 19 airline carbon dioxide emissions fell by more than 10 million tons from the same period a year ago. Based on traffic forecasts by the International Air Transport Association (IATA), airline emissions could fall 38 percent in 2020. Although negative for carriers that there are significantly fewer flights, it is positive for the environment in the short-term.
  • The Essential Air Service program pays airlines to fly to 160 remote cities in the U.S. that otherwise wouldn’t have air service. Bloomberg reports that with the coronavirus reducing air travel by 95 percent, the Department of Transportation (DOT) will make adjustments to the program through June 30. So long as airlines operate at least one round trip flight a day for six days a week on certain essential routes, the DOT will pay the carrier 50 percent for additional flights that weren’t made. This is positive relief for carriers who are suffering from just a few people on each flight. Alaska has the most airports with subsidized flights and the DOT will continue paying carriers as long as they complete at least half of their normal weekly schedule in the state.


  • The IATA estimates that carriers will lose $314 billion in 2020 due to the coronavirus – a 25 percent change from its previous forecast. Demand is so low that carriers are asking permission to not fly certain routes and not lose landing slots. Delta Air Lines said it has flown just one passenger per day to and from Worcester, Massachusetts. Bloomberg reports that JetBlue asked to let it suspend flights to 16 airports warning that continuing to fly to certain locations would significantly harm liquidity.
  • The biggest three Chinese airlines reported first quarter results and had a combined loss of $2 billion. China South Airlines lost 5.3 billion yuan, China Eastern Airlines lost 3.9 billion yuan and Air China lost 4.8 billion yuan. China was the first nation to be hit hard by the coronavirus in January. According to Cirium, in March and April more than 30 percent of domestic capacity has returned to the country. Singapore Airlines said that it would cancel 96 percent of scheduled flights until the end of June and only fly to 15 cities.
  • It is not just airlines feeling the pain. Airplane manufacturers too are suffering. Boeing said that it lost 150 orders for its 737 Max aircraft in March. Airlines are cutting orders or delaying the delivery of jets due to reduced capacity. EasyJet announced the deferred delivery of 24 Airbus aircraft.


  • Air France-KLM said that it could see activity recover to nearly 70 percent by the end of this year if passengers feel safe traveling again. CEO Ben Smith said that a best-case scenario would see traffic back at more than 80 percent by the end of 2021. However, Smith added that he doesn’t expect the carrier to have any flights outside of the European Union before the end of August. Although not the brightest travel forecast, it is one of the more positive forecasts released by a carrier and provides some hope that travel demand will recover.
  • Airlines are taking drastic measures to attract passengers once again. JetBlue announced that it will require all passengers to cover their mouth and nose when checking in, boarding, flying and exiting aircraft. Carriers such as Emirates are enforcing social distancing by not selling the middle seat on rows to create more space between passengers. Other carriers are reassigning seats just before flights to ensure passengers are spread as far apart as possible when seated. Hopefully these measures make customers feel safe while flying and attract travelers back to the skies.
  • Brendan Sobie, an aviation consultant at Sobie Aviation, says that the worst is over for the Chinese airlines. In an interview with Bloomberg TV, Sobie says business travel has resumed slowly domestically, while leisure travel still lags. Sobie added that the combined $2 billion loss in the first quarter for the major Chinese airlines is the worst of it with second quarter losses to not be as sharp.


  • According to OAG Aviation Worldwide, airlines have cut international capacity to just half a million seats a week from an average of 5.9 million before the coronavirus outbreak curbed travel demand. Senior analyst John Grant says that demand is lacking, but strong domestic capacity has helped stem declines in countries such as the U.S., Japan and Indonesia. The report added that total capacity for international and domestic routes has fallen to just 29.8 million seats, down more than 70 percent from January.

pandemic has cut more than 70 percent of global airline capacity
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  • The biggest threat for the airline industry is that the coronavirus continues to spread and a return to normal travel demand is pushed further away. United Airlines said that travel demand was “essentially zero” with no sign of improvement in the near term, reports Bloomberg. United further cut its flight schedule in May to just 10 percent of what it planned at the start of 2020 with similar cuts in June. The airline said it would fly fewer people during all of May than it did on a single day in May 2019. The carrier fell over 9 percent on April 16 after the comments were released.
  • A new challenge has emerged for the aviation industry: what to do with thousands of grounded jets. According to Cirium, more than 16,000 passenger jets – or 62 percent of the world’s planes – are grounded due to the coronavirus. Bloomberg reports that aircraft still need attention while in storage such as maintenance of hydraulics, protection against insects and wildlife and keeping humidity from corroding parts. Anand Bhaskar, CEO of Air Works, says “Parking space is a problem. These are logistics nightmares which we’re trying to work around.”

Leaders and Laggards

Weekly Performance
Index Close Weekly
10-Yr Treasury Bond 0.61 +0.01 +1.99%
Oil Futures 19.65 +2.71 +16.00%
Hang Seng Composite Index 3,448.59 +115.23 +3.46%
S&P Basic Materials 319.47 +5.96 +1.90%
Korean KOSPI Index 1,947.56 +58.55 +3.10%
S&P Energy 272.28 +7.77 +2.94%
Nasdaq 8,604.95 -29.57 -0.34%
DJIA 23,723.69 -51.58 -0.22%
Russell 2000 1,260.48 +27.43 +2.22%
S&P 500 2,830.71 -6.03 -0.21%
Gold Futures 1,708.90 -26.70 -1.54%
XAU 117.36 -0.19 -0.16%
S&P/TSX VENTURE COMP IDX 473.09 +10.45 +2.26%
S&P/TSX Global Gold Index 342.07 -4.77 -1.38%
Natural Gas Futures 1.88 +0.13 +7.62%


Monthly Performance
Index Close Monthly
Korean KOSPI Index 1,947.56 +262.10 +15.55%
10-Yr Treasury Bond 0.61 +0.03 +5.14%
Gold Futures 1,708.90 +117.50 +7.38%
S&P Basic Materials 319.47 +49.25 +18.23%
S&P 500 2,830.71 +360.21 +14.58%
DJIA 23,723.69 +2,780.18 +13.27%
Nasdaq 8,604.95 +1,244.37 +16.91%
Oil Futures 19.65 -0.66 -3.25%
Hang Seng Composite Index 3,448.59 +255.96 +8.02%
S&P/TSX Global Gold Index 342.07 +98.19 +40.26%
XAU 117.36 +36.42 +45.00%
Russell 2000 1,260.48 +188.49 +17.58%
S&P Energy 272.28 +59.24 +27.81%
S&P/TSX VENTURE COMP IDX 473.09 +91.96 +24.13%
Natural Gas Futures 1.88 +0.29 +18.40%


Quarterly Performance
Index Close Quarterly
XAU 117.36 +13.84 +13.37%
S&P/TSX Global Gold Index 342.07 +77.70 +29.39%
Gold Futures 1,708.90 +113.80 +7.13%
DJIA 23,723.69 -5,135.75 -17.80%
S&P 500 2,830.71 -452.95 -13.79%
Nasdaq 8,604.95 -693.99 -7.46%
Korean KOSPI Index 1,947.56 -200.44 -9.33%
Natural Gas Futures 1.88 +0.05 +2.73%
S&P Basic Materials 319.47 -50.69 -13.69%
Russell 2000 1,260.48 -387.74 -23.52%
Oil Futures 19.65 -32.49 -62.31%
Hang Seng Composite Index 3,448.59 -155.13 -4.30%
S&P/TSX VENTURE COMP IDX 473.09 -102.07 -17.75%
S&P Energy 272.28 -146.51 -34.98%
10-Yr Treasury Bond 0.61 -0.97 -61.29%


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OTP Bank
Silvercorp Metal Inc
Caterpillar Inc
BHP Group Ltd
American Airlines Group Inc
Delta Air Lines Inc
United Airlines Holdings Inc

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index. The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months. The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange. The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges. The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500. The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500. The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500. The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500. The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500. The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500. The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500. The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500. The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

The NIFTY 50 index is National Stock Exchange of India’s benchmark broad based stock market index for the Indian equity market. The Conference Board Leading Economic Index is an American economic leading indicator intended to forecast future economic activity. It is calculated by The Conference Board, a non-governmental organization, which determines the value of the index from the values of ten key variables.