Your Wednesday Market Blip 4/1/20

Your Wednesday Market Blip 4/1/20

It looks like the “W” chart formation is starting to play out as markets sold off following last night’s White House virus briefing in which the data models were sobering and the President said the next two weeks would be a trying time as we head towards “peak virus”. At the close the Dow was off 973 or 4.4% at 20,943. Trading volume was higher. Xerox called off its $34 billion merger with Hewlett Packard and T-Mobile completed its takeover of Sprint creating a wireless carrier the same size at Ma Bell and Verizon.
First quarter earnings reporting season will begin next week and since the world has changed in the past month investors will be listening in on the earnings calls not for what the company did in the last quarter but what they are doing right now and what they see going forward. One company looking to deploy capital is Canadian infrastructure firm Brookfield. CEO Bruce Flatt put out a shareholder letter stating the company is flush with liquidity and looking for deals in the credit space or bond market via its ownership in Oaktree which specializes in buying stressed debt. Bruce said they are seeing values they have not seen since 2008 and are looking to buy low for the long haul.
Oil prices were up 2% today but still trade at $20.93 per barrel as US stockpiles of crude jumped by 13.8 million barrels well above guru estimates. Refineries are operating at 82.3% capacity with output down about 6% from the prior week. Whiting Petroleum in Denver, CO was the first casualty of the price war throwing ace duce today and agreeing to chapter 11 with its lenders. Interestingly the company has plenty of cash and expects to pay all suppliers and continue operations at a reduced rate while it converts debt to equity.
Zoom Video’s daily active users are up 151% year over year in March with 4.84 daily US user volumes. Teams at Microsoft Azur cloud services is working with Zoom to keep things running and add capacity in the face of the tremendous increase in business.