- The oil price rose more than 20% yesterday, partly due to President Trump tweeting that he had been in contact with his friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, and that he expects them to announce a deal to cut oil production by 10 million barrels or more, probably each day. At the same time Saudi Arabia called for an "urgent" meeting between OPEC and its allies.
- Global job losses have exploded with millions seeking unemployment benefits as lockdowns are imposed all over the world to slow the spread of coronavirus:
- In the US alone, 6.6 million Americans filed for jobless aid last week, almost 2.9 million more than expected. On the other hand, continuing claims ended at 3 million people, 1.9 million below expectations.
- Around 4 million French workers applied for benefits in the last two weeks (1/5 of service sector employees have been temporarily laid off), 800,000 lost their jobs in Spain last month and 1 million people have applied for unemployment benefits in the UK.
- In Norway we are seeing the highest jobless numbers since the second world war, with an unemployment rate of 10.7%.
- Service sector PMIs for Europe and China have been released. Europe is unsurprisingly very weak, with Italy recording 17.4 versus 22.5 expected. Compared to the GFC, all countries are way below their lowest levels in 2008, with Germany reporting the least depressing number at 31.7.
- The Euro area as a whole came in at 26.4, with Germany and France on the upside while Italy and Spain were on the downside, unsurprisingly given that they are the worst affected countries in Europe.
- In China, the official PMI (CLFP) was above 50 and clearly indicates a V-shaped recovery. On the other hand, the Markit PMI came in at 43, pointing to more of a U-shaped recovery.
- Last night, the Norwegian government announced that Norwegian companies (paying taxes to Norway) seeing sales decreasing by 20% yoy in March, and 30% yoy in April / May can apply to get 80-90% of their fixed costs (inc. net financials, leasing costs, rent, power, insurance etc.) covered by the State. Companies that have been forced to shut down will receive 90% compensation, while other companies will get 80%. Other packages in place are already alleviating companies’ wage bills.
SKAGEN Funds Summary
- No material changes.