Morning wrap 3 August 2020

*POINTS OF NOTE*

COVID19:

Coronavirus Cases Rise in Europe as Youth Hit Beaches and Bars - WSJ

Why Youthful, Conservative Pakistan Is a Coronavirus Bright Spot - WSJ  

Melbourne Hardens Lockdown to Combat Resurgent Coronavirus Outbreak - WSJ

Africa's Covid-19 Tally Rises to 910,395 Cases, Agency Says  

Chileans Dip Into Pensions to Ease Economic Pain - WSJ

MACRO CREDIT:

China Caixin PMI Jumps to 52.8 (highest since early 2011) - Higher than forecast of 51.1 -BBG

Valeo, the French autoparts credit, was downgraded to HY on Friday night, making it the latest fallen angel

AUGUST EQUITY MOVES:

NDX ended the month up +7.4%, SPX up +5.5% and Dow up +2.4%, making 4th consecutive monthly gains for the indices

US ECONOMY / FED:

FED - Fed Weighs Abandoning Pre-Emptive Rate Moves to Curb Inflation - WSJ

US CONSUMER - Consumers, Flush With Stimulus Money, Shun Credit-Card Debt (WSJ)

INFLATION & HOUSING - Lumber prices have more than doubled since early April. Prices for wood products are htiting records all over country - likely to filter into higher INFLATION figures.

FINANCIALS:

HSBC - Warns of bigger credit losses than expected but CET1 comes in higher than expected (15%). UK is area with greatest provisioned credit losses due to asssumptions around COVID19/Brexit.

DEALS:

Lots of deals announced over weekend:->

Nvidia to bid for ARM (Owned by Softbank)

PE Firms discuss bid for US Railroad Giant (Kansas City Southern)

Marathon to Sell Gas-Station Chain to 7-Eleven Owners for $21 Billion - WSJ

Siemens Healthineers to Buy Varian Medical for $16.4 Billion - WSJ. Deal will create a leader in the area of cancer therapy.

 

*MORNING WRAP*

MACRO CREDIT 3

China Caixin PMI Jumps to 52.8 (highest since early 2011) - Higher than forecast of 51.1 -BBG 3

South Korean Exports Fell for Five Months; Pace of Declines Moderated in July 3

Jet fuel demand outlook sours after fleeting market optimism - RTRS 4

Bitcoin has tripled in value since March, as investors and speculators bet the cryptocurrency will continue to rise amid record-low government bond yields. 6

NEW ISSUES / TENDERS 7

COVID19 7

Coronavirus Cases Rise in Europe as Youth Hit Beaches and Bars - WSJ 7

Why Youthful, Conservative Pakistan Is a Coronavirus Bright Spot - WSJ 9

Melbourne Hardens Lockdown to Combat Resurgent Coronavirus Outbreak - WSJ 10

Africa's Covid-19 Tally Rises to 910,395 Cases, Agency Says 11

US 11

Fed Weighs Abandoning Pre-Emptive Rate Moves to Curb Inflation - WSJ 11

Democratic, Administration Negotiators at Loggerheads Over $600 Jobless Benefit 12

Consumers, Flush With Stimulus Money, Shun Credit-Card Debt - WSJ 13

Airlines Go Back to Congress for Money to Preserve Jobs - WSJ 15

Ongoing fiscal stimulus “is potentially more inflationary than appreciated, which means that back-end rates can rise: MS 17

America’s Saw Mills Didn’t See This Building Boom Coming - WSJ 17

Fitch Ratings Revises US Outlook to Negative; Affirms AAA Rating 18

UK / IRE 19

Over half of furloughed UK staff back at work: Resolution Foundation 19

Ryanair to fight Irish travel restrictions in court - RTRS 19

British Airways pilots accept pay cuts, job losses negotiated by union - RTRS 20

Apple demands 50% rent cuts for UK stores - Sunday Times 20

UK pubs and leisure stocks maybe weak today after Professor Graham Medley… 22

FINANCIALS 22

Capital One Slashes Dividend by 75% to 10 Cents a Share - WSJ 22

Hiscox First Half Gross Written Premiums Misses Estimates 22

HSBC | UK operations hit by highest expected credit losses | | CET1 of 15% 23

HSBC Hit by Impairments, ‘Relentless’ Rates Pressure: Analysts | Shares down 4% in HK 23

Société Générale Q2 20 results weaker than expected | CET 1 of 12.5% 24

Sabadell AT1 down 6pts last week: Jefferies 24

IG 24

Marathon Petroleum to Sell Gas-Station Chain to Japanese 7-Eleven Owners for $21 Billion 24

HY 25

TUI SIGNS SALE AND LEASEBACK FOR 5 BOEING 737 MAX-8 FOR $226M 25

EM / ASIA 25

MTN Group Sees 1H EPS Above Previous Views; Won't Pay Interim Dividend 25

Chileans Dip Into Pensions to Ease Economic Pain - WSJ 25

ESG / RENEWABLES / BUY SIDE 26

RATINGS 26

Fitch Affirms Close Brothers at 'A-'; Outlook Negative 26

Hawaii Affirmed at AA+ by Fitch 26

S&P lifts outlook on EU credit rating 26

Valeo, the French autoparts credit, was downgraded to HY on Friday night, making it the latest fallen angel 26

EQUITIES 26

Vanishing payouts: £30bn in dividends gone already - Sunday Times 26

BP set to slash dividend - Sunday Times 27

Total Seen as Differentiated Pick Among Energy Shares: Berenberg 27

UK Shopping centre giant Hammerson set to tap investors for £600m 28

Nvidia in Talks to buy ARM from Softbank 28

Private-Equity Firms Discuss Bid for Kansas City Southern [US RAILROAD] - WSJ 28

Siemens Healthineers to Buy Varian Medical for $16.4 Billion - WSJ 29

Aroundtown Gets First Sell With MS Cautious Given Uncertainty 29