🇺🇸🛢Oil markets suffered another blow of volatility as Donald Trump tweeted that Saudi and Russia will cut output. Crude immediately soared on the back of those comments, rising over 25% at one point, to record its biggest one-day rally. It was another very eventful session as investors were given the unemployment data which showed a spike in unemployment claims of 6.6 million Americans and the global infected coronavirus cases topped 1,000,000.
⛽️Oil is still down for the year, albeit 58% low since its record high, after yesterday’s gains. Oil has a very close relation to other sectors such as manufacturing and travel. If losses on oil are big, investors will be forced to sell other assets. With a strong correlation to the energy companies, as oil rallied, Chevron and Exxon Mobil gained 11% and 7.7% respectively. Markets have fully priced in what Trump said, but the devil will lie in the details and there will be more volatility to come depending on what was part of the actual deal.
🤷🏻♂️The US jobless claims released yesterday were the worst on record. Although everyone expected a very ugly number, getting the actual 6.6 million claims were eye-popping as the pandemic unfolds across the globe. Some states in the US already have over 10% unemployment. As the coronavirus reduces consumption and disrupts entire industries from travel to retail to consumption, academic and bank economists expect the number to rise further in the coming months.