On the heels of the Dow tumbling another 600, here is a look at what pace to reopen the country, crude oil, plus another collapse.

What Pace To Reopen Country
April 21 (
King World News) – 
Peter Boockvar:
  To the debate on when and at what pace to reopen, we continue to get real world experiences underway to analyze the evidence of success or not. And to what extent mask wearing will help. This time it’s in the US with the Georgia Governor yesterday announcing that as of this Friday, gyms, barbers, hair and nail salons, massage therapy, bowling alleys and tattoo shops can reopen.

Next Monday, movie theaters and restaurants will be allowed to reopen while bars and night clubs will stay closed. I don’t know the testing situation in Georgia in terms of their capacity and I’m sure there will be setbacks here and maybe even a reversal of the policy but at least we’re going to see what happens. I sure wish I could get my haircut but just because these stores open doesn’t mean everyone is rushing out to go. Personal confidence in doing so will be key here…

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To the point of inevitable setbacks, Singapore is extending its partial shutdown to June 1st as it is now dealing with a jump in cases from migrants housed in dormitories. The Singapore Straits sold off by 1.8%. 

This was a positive story yesterday (h/t BK) on the results of an antibody testing program to see to what extent the population was infected. It showed many more people had it than actually knew it which also means the mortality rate is much lower, http://publichealth.lacounty.gov/phcommon/public/media/mediapubhpdetail.cfm?prid=2328&fbclid=IwAR3s3qxtsgrkFlPtlQqOxxbq8hnNCBnv4xweTuV16QuDvbyMkuVP0q-eoWQ. Many more of these nationally will be hugely important to see. We know Cuomo over the weekend said that this testing will be rolled out this week in NY, albeit slowly. The Kospi fell 1%.  

About The Oil Market…
With respect to oil prices, there was one thing to get an unprecedented collapse in a front month contract because no one wanted to take delivery with no place to put the oil but that storage fear is plaguing the out month contracts for a 2nd day. And even Brent crude is reflecting those same worries with its June contract down 15% after a 9% drop yesterday. There is chatter that OPEC+ will not wait until May to start with its production cuts but either way, it seems that until economies around the world further reopen and people start commuting again, which is coming more in earnest next month, this pressure will continue. Bottom line, owning a futures contract on the day of settlement is an OBLIGATION, not a RIGHT to take delivery and explains what is going on when there is no storage capacity.

In an early snapshot of April trade data, South Korea said its exports for the first 20 days fell 26.9% y/o/y while imports were down by 18.6%. No need to give color here that we don’t already know. The question is what it looks like in coming months when things begin to resume again, particularly what will South Korea’s exports to China look like. In this figure it fell 17%. Exports to the US dropped 18% driven by a sharp drop in autos. 

In Germany, investors are not surprisingly pretty down right now but optimistic that things will get better in coming months. The ZEW Current Situation index fell to -91.5 from -43.1 and that was worse than the estimate of -77.5.

German ZEW Current Conditions Collapses To -91.5

The Expectations component on the other hand improved to +28.2 from -49.5 and that was well better than estimate of -42. With Germany in control of its patient counts and rolling out plans to reopen, we can understand the optimism but again, the pace of this recovery will be muted. To all of this, “The financial market experts are beginning to see a light at the end of the very long tunnel. The results of the special questions on the coronavirus crisis included in the survey show that the experts do not expect to see positive economic growth until the 3rd quarter of 2020. Economic output is not expected to return to pre-corona levels before 2022.” Bottom line, focus more on the IFO figure on Friday which is surveying actual businesses.

Ole Hansen And Pierre Lassonde On Crude Oil Carnage
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