By Peter Nurse
Investing.com — President Trump has continued his verbal onslaught against the Chinese regime, and President Xi in particular, inflating concerns about a potential trade war and hitting stocks as a result. Oil is on a record run, while the Covid-19 virus hits five million victims. And this is all before the latest release of the weekly jobless claims data. Here’s what you need to know in financial markets on Thursday, May 21st.
1. Trump doubles down on China criticism
U.S. President Donald Trump showed no signs of easing back on his criticism of China, launching another stinging attack on its handling of the pandemic overnight, blaming Beijing for “mass worldwide killing.”
In a series of tweets, he accused China of spreading “pain and carnage” around the world, and appeared to single out President Xi Jinping personally in saying that “it all comes from the top.”
While these attacks could be seen as being politically motivated, in offering up a scapegoat for the American electorate to blame for their economic hardship ahead of November’s presidential election, they are also fuelling concerns that the trade deal agreed last year between the two sides could crumble.
2. Virus tops five million
The number of people infected worldwide has now reached five million, according to data collated by Johns Hopkins University.
The grim milestone has been reached less than two weeks after the world hit the four million mark.
The number of deaths caused by the virus currently stands at over 328,000.
While a number of European countries and U.S. states are starting to scale back their social distancing measures, the pandemic has picked up speed in other parts of the world.
The World Health Organization warned that the coronavirus pandemic is a long way from being over, stating Wednesday the number of newly reported coronavirus cases worldwide hit a daily record this week with more than 100,000 new cases over the last 24 hours.
3. Stocks set to sell off
U.S. stock markets are set to open lower, amid concerns that the escalating Sino-U.S. tensions could lead to further trade disruptions.
In focus later will be Ford (NYSE:F), after the car manufacturer had to shut down two separate factories because employees tested positive for Covid-19. Both plants – one in Chicago and the other in Dearborn, Michigan – restarted only on Monday after suspending production for about two months because of health concerns.
AstraZeneca (LON:AZN) will be watched after it said it had concluded the first agreements for at least 400 million doses of the University of Oxford’s Covid-19 vaccine and has secured total manufacturing capacity for one billion doses so far and will begin first deliveries in September 2020.
Best Buy (NYSE:BBY) is set to continue the retail sector reporting season, offering up its quarterly earnings before the open.
4. Jobless claims on the data slate
Investors will focus on the weekly jobless claims figure, at 8:30 AM ET (12:30 GMT), with economists looking for a dip from last week, but a slight one as companies are still forced to shed jobs.
Claims for first-time unemployment benefits are expected to come in at 2.4 million, compared with nearly 3 million the week before, according to forecasts compiled by Investing.com. Continuing claims are expected to have risen to nearly 24.8 million.
The economic data released earlier Thursday was downbeat.
In Asia, Japan’s trade data showed exports in April plunging 21.9% as compared with a year earlier, while a trade report from South Korea, a bellwether for global commerce, showed exports may be set to drop more than 20% in May for a second month.
The news from Europe was slightly more positive, showing economies crawling off the floor. The composite PMIs from both Germany and France rose in May from record lows the month before, but both measures remained in contraction territory.
5. Oil on record positive run
Oil prices have continued to push higher, heading for a sixth consecutive day of gains – the longest positive run in 15 months – after the U.S. government’s official data confirmed a drop in crude stockpiles.
EIA data showed Wednesday a draw of 4.98 million barrels last week, the most since December. This was very similar to the American Petroleum Institute estimate that crude stocks fell by 4.8 million barrels last week – the first decline since March and the biggest one since January.
Crude has risen more than 80% this month as production cuts have kicked in and demand has started to return.
Top 5 Things to Know in the Market on Thursday, May 21st