ASX200 reverses early jump as Westpac confidence survey tanks

Shares rallied early but a dismal consumer confidence print took its toll, sending the ASX lower by 0.4pc at the close.

David Rogers and Melissa Yeo

36 min read

6:27AMApril 15, 2020.

Updated 5:09PMApril 15, 2020

World stocks rallied on hopes virus-related lockdowns are set to be eased soon.

Shares slip 0.4pc on energy drag
Consumer confidence takes record dive
InvoCare upsizes placement to $200m
New investors snubbed in QBE’s $1.2bn raise
Oil price slumps

That’s it for the Trading Day blog for Wednesday, April 15. The ASX gave up an early rally to finish lower by 0.4pc after Westpac’s survey of consumer confidence dropped by 17.7pc to its lowest level since the 1990s recession.

Overnight, Wall Street rallied on hopes for a reopening of the US economy. The Dow gained 2.4 per cent, the S&P 500 jumped 3.1 per cent and the Nasdaq surged 4.0 per cent.

4.29pm: $A, $NZ tumble

The Australian and NZ dollars have tumbled 1.2 pc against a slightly stronger US dollar this afternoon.

AUD/USD fell 1.2pc to a two-day low of 0.6375 after hitting a 5-week high of 0.6445 in late NY trading.

NZD/USD fell 1.2pc to a 4-day low of 0.6034 after hitting a 4-week high of 0.6131 on Wednesday.

Damon Kitney 4.22pm: Deloitte cuts salaries by 20pc

Deloitte Australian boss Richard Deutsche has asked the consulting giant’s staff earning over $65,000 to accept a 20pc reduction in pay until September 2020, translating to an 8 per cent annual cut.

The cut is part of a series of measures announced to staff this afternoon to cope with the coronavirus pandemic-induced downturn in business for the firm. Similar cuts have already been announced by the other big four accounting firms.

The changes at Deloitte also include a 25 per cent reduction for equity partners, 10 days of additional annual leave for all staff until January 31 and no new promotions until January next year.

However working hours will remain unchanged.

Mr Deutsche has urged staff to accept the proposed changes, which will take effect from May 1.

4.13pm: Shares slip 0.4pc

Market enthusiasm waned on Wednesday, closing out the session with a 0.4 per cent loss just a day after the benchmark surged into a new bull market.

A quick early boost sent shares up 0.8pc, but a “disturbing” consumer confidence read pulled the benchmark ASX200 to a daily loss of 21 points or 0.39 per cent at 5466.7.

A warning from the IMF that the global economy would have its worst year since the Great Depression added to the market pessimism.

By the close, the All Ords was lower by 19 points or 0.35 per cent at 5523.3.

Nick Evans 3.50pm: TBG explains 800pc share surge

TBG Diagnostics says its directors failed to notice a link to news its Chinese sister-company’s coronavirus testing kit had won European approval pointed to a public social media post, according to the company’s latest explanation for a trading spike that sent its shares up 800 per cent before it announced the news to the ASX.

TBG, which trades under the ASX code TDL, was suspended from trading on the ASX on March 19 after its shares jumped 800 per cent on no news and a comparatively huge volume for the thinly-traded company, days before a March 18 announcement its Chinese investee company, TBG Biotechnology Xiamen Inc, had received CE Mark approval in Europe for a COVID-19 diagnostic test.

In a March 19 response to an ASX query over the trading spike TBG said it had been “informally notified” of the CE Mark certification on March 14, a Saturday, and made the announcement when it had received confirmation of the European decision and its directors “reasonably believed” the information remained confidential until it was announced to the Australian market.

On Wednesday TBG conceded the message to director Stanley Chang from a director at its sister company included a hyperlink to a public post on social media and messaging app WeChat by the Chinese company.

Dr Chang then forwarded the message, including the link, to fellow Australian directors Emily Lee and Jitto Arulampalam – but none of them realised that market confidentiality had been breached via the post, the company said.

“The TDL directors were not actively monitoring the trading of TDL shares on 16 and 17 March 2020 and therefore were not aware of the share price movements on 16 and 17 March 2020 until the company secretary was contacted by ASX in the morning of 17 March 2020,” the company said today.

Shares in the company had previously traded at 2.6c on February 26, when 2500 shares changed hands. Its shares jumped to 14c on March 16, on the exchange of 134,549 shares and to 27c on March 17, when 988,282 shares were traded.

Its shares remain in suspension.

3.45pm: Gold to reach $US2000/oz: CS

Credit Suisse analysts are tipping gold prices to continue to rally to new heights – projected to reach $US2000/ounce from current levels around $US1700/oz.

Strategist Andrew Garthwaite argues that unprecedented levels of global monetary and fiscal stimulus was driving record debt levels and necessitating a prolonged period of negative rates.

Other supportive factors were a weak US dollar and need for governments to increase gold as a proportion of central bank reserves.

Factoring in a gold price at those levels, Credit Suisse argues that the local gold sector is “looking cheap on valuation, trading at around 0.94x P/NAV for large caps and 0.55x for the mids”.

“Our recent analysis on company leverage to gold price highlighted Evolution Mining as most leveraged to rising gold from an earnings, and NST most leveraged from a valuation, perspective,” Credit Suisse says.

“Of the large caps which are in most demand from generalists seeking gold exposure, we maintain a preference for Evolution (O) and Northern Star (N) over Newcrest (N). Of the mid-caps we prefer St Barbara (O) and Alacer Gold (O)

3.36pm: Australia ramps up bond issuance

Australia has ramped up its bond issuance to help fund the $215bn of stimulus so far announced to offset the coronavirus-related slowdown, with a record $13bn sale of November 2024 bonds at a yield to maturity just 0.47 per cent by the Australian Office of Financial Management today.

The bond sale, which almost twice covered by bids of $25.8bn beat the previous record ANZ has estimated that the AOFM will issue more than $250 billion of bonds in the next 15 months.

3.24pm: China cuts key rate, steps up support

China’s central bank on Wednesday cut a crucial interest rate that could pave the way for lower benchmark lending rates, as Beijing steps up efforts to support an economy hit by the coronavirus pandemic.

The People’s Bank of China lowered the one-year medium-term lending facility rate to 2.95pc from 3.15pc, according to a statement published on its website. The central bank last cut the rate in February.

The loan prime rate, which was revamped last year to replace an old benchmark for lending rates, is loosely pegged to the lending facility rate. The result of this month’s loan prime rate is due Monday.

China’s central bank on Wednesday also injected 100 billion yuan ($US14.19bn) of liquidity via MLF operations.

Chinese authorities have heightened efforts to prop up the economy by injecting extra cash and guiding down lending rates. The central bank could soon move to reduce deposit rates to further encourage banks to lower borrowing costs, according to economists.

Dow Jones Newswires

ðŸ‡¨ðŸ‡³ #China Adds Liquidity, Trims Rates Ahead of Poor GDP Data - Bloomberg
*#PBoC offered 100 billion yuan ($14 billion) via the one-year medium-term lending facility, cutting the rate to 2.95% from 3.15%.
*Link: https://t.co/UGjMEObG6O pic.twitter.com/DMpX2Qz2P2
— Christophe BarraudðŸ›¢ (@C_Barraud) April 15, 2020

2.54pm: Hemp food maker doubles value

Hemp food manufacturer Australian Primary Hemp has more than doubled its market value in today’s session, after providing a bumper quarterly update to the market.

The group posted a revenue lift of 25pc for the third quarter from the previous, to a record of $45,000.

It said COVID-19 had not adversely impacted its sales to date, with March its largest revenue month in the company’s history. Instead, APH said industry feedback had suggested its imported competition was getting held up, giving the company an advantage in the local market.

“The Company will continue to progress new product development and business collaborations and will update shareholders as these are crystallised,” it said in an update to the market.

“With a cash balance of $2.9m at 31 March, together with projected revenue progress and a significantly reduced burn rate, the business is well positioned for growth during 2020.”

APH shares are among the best performers on the market – last up 114pc to 15c.

Bridget Carter 2.42pm: Salt Lake Potash seeking $20m

DataRoom | Euroz Securities and Canaccord Genuity are assisting Salt Lake Potash on its $20m-plus equity raising efforts.

The company will use the proceeds to fund its Lake Way project development and other lakes exploration, as well as for general working capital purposes.

The company will raise at least $20m at 34c each through a placement and a $750,000 placement for a company director.

Bridget Carter 2.24pm: New Century raise already oversubscribed

DataRoom | Zinc miner New Century Resources is raising more than $20m through Canaccord Genuity.

The group will raise $20m through a two-tranch placement at 10c per share.

The first tranche will raise about $13.5m and the second tranche will raise $6.5m.

In addition to the placement, the company intends to conduct a Share Purchase Plan to up to $10m.

The deal is already oversubscribed.

Its market value is $96m.

2.16pm: ASX, $A retreat

Australia’s sharemarket and the Aussie dollar have retreated fairly sharply today.

The S&P/ASX 200 is down 1.1pc at 5427.5 and AUD/USD is down 0.5pc at 0.6409.

Both risk assets hit multi-week highs at 5533 and 0.6445 respectively early today.

Both have had spectacular gains of 26 per cent and 17 per cent respectively from their lows last month.

1.48pm: Bubs boost buoys milk formula makers

A surge in quarterly revenue for infant milk formula maker Bubs is helping the rest of the sector higher on Wednesday, helping larger rival a2 Milk to set new record highs.

Bubs reported a 67pc lift in quarterly revenue and a doubling of direct sales to China over the three months to March 31.

That’s helped its shares to add 5.4 per cent to 92c on Wednesday.

But the boost is also rubbing off on a2 Milk – its shares are up 3.5 per cent to $18.09, after hitting a new high of $18.39.

Blackmores, who also has exposure to the sector, is higher by 2pc to $76.89.

David Swan 1.41pm: Spirit shares lift on acquisition talk

ASX-listed independent telco Spirit has completed a $9.2m raise, as the Melbourne company continues to rack up acquisitions and expand its focus to becoming a one-stop-shop IT provider.

The company, led by Sol Lukatsky who took over in September 2019, also expanded its debt facility to $10.9m, to be deployed to acquisitions and growth of the company’s Spirit X telco digital sales platform.

The plan was first reported in The Australian’s DataRoom.

Mr Lukatsky told The Australian Spirit has two potential acquisitions in advanced due diligence and term sheet stage, as it moves from being a pure-play fixed wireless internet provider to also offering IT services the education, aged care, hospital and SMB sectors.

ST1 shares are higher by 7.1 per cent to 15c in afternoon trading.

1.21pm: Petronas to raise $US6bn in bond sale

Malaysian state oil company Petronas is raising $US6bn in its first dollar-bond sale since 2015.

Petroliam Nasional, known as Petronas, is selling $US2.25bn of 10-year bonds with a coupon of 3.50pc, according to a term sheet seen by The Wall Street Journal. The bonds are priced slightly below face value to give a yield of 3.652pc.

The oil group is raising $US2.75bn via 30-year notes and $US1bn via 40-year notes, both sold at face value, with coupons of 4.55pc and 4.80pc, respectively.

Petronas said it will use the proceeds for general corporate purposes, including capital expenditure and refinancing.

Moody’s Investors Service has an A2 rating on the bonds, the sixth-highest investment-grade rating on its scale. S&P Global Ratings rates the bonds at A-, one notch lower on its scale.

Bank of America Securities, Citigroup, HSBC, Maybank and MUFG are managing the deal. Petronas last sold dollar bonds in 2015 in a $US5bn deal

WSJ

A drone sprays disinfectant over Kuala Lumpur’s Petronas Towers as a preventive measure against the spread of the COVID-19. Picture: Mohd Rasfan / AFP.

1.09pm: Kathmandu surges as Norges Bank buys in

Shares in adventurewear retailer Kathmandu are surging in lunch trade after Norges Bank, the central bank of Norway, picked up a 5pc stake in the group.

In a disclosure to the market this morning, Kathmandu said Norges Bank had become a substantial holder in the company during its latest capital raise, scooping up 30,508,350 shares.

Earlier this month, the retailer raised $NZ207m at NZ50c per share.

KMD last traded up 15.3 per cent to 80.7c.

1.02pm: Shares bounce from daily lows

The local market is holding lower by 0.6 per cent, bouncing from its lows but still negative despite an early rally.

At 1pm, the benchmark ASX200 is lower by 35 points to 5452.7 after slipping to lows of 5416.4.

Energy stocks are the biggest drag, down 3.5pc after a tumble in oil prices overnight, while tech stocks lift 1 per cent.

Afterpay is slipping by 3.2pc after yesterday’s rally while gold miners are outperforming, with Newcrest up 1pc.

Here’s the biggest movers at 1pm:

12.54pm: Home building work slips in Q2

The value of building work done in the December quarter dropped 4.7 per cent to $28.9bn, the Australian Bureau of Statistics says.

The value of residential construction work fell 5.9 per cent, while non- residential construction work fell 3.6 per cent, following a rise of 8.2 per cent in September.

The number of starts for residential buildings other than houses grew 4.7 per cent to 16,002.

AAP

12.39pm: Potential for rising wedge pattern

Australian sharemarket bears may be clutching at straws but some are now looking at a potential rising wedge pattern on the S&P/ASX 200.

If so, the support line today is at 5398, the resistance line is at 5460, and the apex of the pattern is around 5500.

Obviously the move above the resistance line on Tuesday and today would have to be labelled “false breaks”.

Bears would now be selling upticks to the resistance line with a stop-loss above today’s high at 5533, or waiting for a clear break of support.

The sharp reversal of intraday strength today certainly seems to have emboldened the bears, even though the market has recovered somewhat.

The S&P/ASX 200 is down 0.5pc at 5455.8 after choppy trading within 5416.4-5533.0.

Patrick Commins 12.35pm: Treasurer plays down dire IMF outlook

Josh Frydenberg has played down the IMF’s dire outlook for the Australian economy, saying the international body’s economists finalised their forecasts before the announcement of the government’s $130bn JobKeeper package and before we successfully “bent the curve” of new coronavirus cases.

The International Monetary Fund’s latest World Economic Outlook, released overnight, predicts the worst year for the global economy since the Great Depression in the 1930s, with the hit to growth eclipsing that seen during the GFC.

Australia’s economy will contract by 6.7 per cent this year, the IMF said, before rebounding 6.1 per cent in 2021.

Notably, the IMF forecasts the jobless rate will reach 7.6 per cent this year, before climbing to 8.9 per cent in the next, despite the expected economic recovery.

When quizzed about the prediction of a climbing jobless rate, the Treasurer this morning said the IMF’s outlook was completed before the announcement of the $1500 a fortnight wage subsidy program, a measure which “will ensure many Australians remain in their jobs and won’t be joining the dole queue”.

12.16pm: Losses to persist for Qantas: UBS

Qantas can weather lengthy travel restrictions, but the airline will have a rough 12 months after travel restrictions are lifted, so warns UBS.

In analysis of the airline’s recovery prospects, Matt Ryan notes that despite Qantas’ best efforts to manage capacity, he expects losses in the first year back after restrictions are lifted and return to FY19 levels in four years time.

“We now forecast underlying profit before tax outcomes of -$1.2bn loss in FY21, $0.5bn in FY22E and $1.3bn in FY23E. A multi-year travel impact from COVID-19 is becoming more likely, which we have reflected in demand recovering to FY19 levels by FY24E,” he writes.

Still, UBS maintains a buy on the stock as it trades at a FY23E price-to-earnings multiple of 5x, notwithstanding the current uncertainty.

“We also view Qantas’ strong liquidity position plus high exposure to domestic earnings as placing it in a relatively strong position among peers,” he adds.

Qantas and Virgin plans grounded at Adelaide Airport. Picture: Emma Brasier/AAP

12.03pm: Overseas arrivals drop 26pc

Travel restrictions have slashed Australia’s visitor numbers by 26 per cent for February, while more than 785,000 Australian residents return home.

The latest data from the Australian Bureau of Statistics shows the initial shock to the local tourism sector from coronavirus, ahead of ramped-up restrictions in March.

For the month, 685,400 visitors arrived in Australia, down 26pc on the same month a year ago – most notably to NSW, where visitors dropped by 29pc.

“Although China was previously the largest source country for visitors for this month, it had decreased by nearly 90pc when compared to a year ago,” ABS director of migration statistics said.

Among the top ten source countries, the highest annual decreases beyond China were recorded for Hong Kong (-28pc), Singapore (-25pc), and Germany (-16pc). An increase of 16pc was recorded for those travelling to Australia from India.

Nick Evans 12.01pm: Chalice Gold rockets on new discovery

Shares in explorer Chalice Gold have rocketed after the company said drilling results had confirmed it had made a spectacular new palladium nickel and copper discovery only 70km north of Perth.

Chalice shares spiked 42.5c, or 75.c per cent, to 99c in early trading when it reported the latest drilling results from its Julimar project, with the company saying the results suggested it had discovered a new nickel-copper-palladium province in WA.

Shares in the explorer were trading at 17c when the discovery was first announced on March 23, and have since run hard as the company launched a discovery confirmation program.

Best hits from the latest round of reverse circulation drilling include 41 metres at 2.6 grams a tonne palladium, 0.5 per cent nickel and 0.4 per cent copper from 39m, and 33m at 6.5g/t palladium, 1.6 per cent nickel and 0.7 per cent copper.

ASX: Significant nickel-palladium discovery confirmed at Julimar. New wide high-grade palladium-nickel-copper zone intersected ~60m east of the discovery hole, plus wide palladium intervals in all six drill holes assayed to date: https://t.co/HM5n2XMTad $CHN pic.twitter.com/htS0cVfhiT
— Chalice Gold Mines (@ChaliceGold) April 14, 2020

11.48am: Energy drags despite oil rebound

Oil rebounded in Asian trade Wednesday following sharp falls the day before, as doubts persist about whether a deal to cut output is enough to bolster coronavirus-hit prices.

US benchmark West Texas Intermediate (WTI) was up 2.73 per cent to $US20.66 a barrel in morning trade after tumbling more than 10 per cent in New York. A barrel of Brent crude, the international benchmark, was trading 1.49 per cent higher at $30.04.

Prices have crashed as the coronavirus pandemic saps global demand, with the situation compounded by a supply glut resulting from a price war between OPEC cartel kingpin Saudi Arabia and non-OPEC rival Russia.

A compromise hammered out at the weekend by Saudi Arabia, Russia and other crude producers to slash output by around 10 million barrels per day briefly boosted prices but the rally soon fizzled out.

“Reality set in as the market contemplated the … agreement,” ANZ Bank said in a note.

While the reduction was one of the biggest co-ordinated cuts in history, “it still falls short of the hit to demand,” the bank added.

“A rebound in fuel demand remains elusive, with many countries indicating international travel will be curtailed for the foreseeable future, even as the virus eases,” it said.

Still, energy stocks are lower by 3.2pc, the worst performing sector in midday trading.

AFP

11.31am: Volatile ASX turns down 1.3pc

The Australian sharemarket still can’t be trusted even entering a “bull market” yesterday.

The S&P/ASX 200 has dived 71 points or 1.3pc to an intraday low of 5416.4 after initially rising 0.8pc to a 5-week high of 5533.

While the fall came amid a collapse in Westpac’s consumer confidence index for April, the market ignored an equally-dire and arguably more important plunge in NAB’s business survey yesterday.

The Australian dollar and bonds have been little affected by the consumer confidence data, but perhaps Westpac chief economist Bill Evan’s assessment that the data are “very disturbing” is upsetting some investors.

With so much central bank intervention globally via liquidity additions and quantitative easing it’s hard to know whether to price assets for perpetual central bank support or the dire economic reality caused by COVID-19.

11.21am: Appen maintains guidance

Appen still expects to meet its full-year earnings guidance, as the remote nature of its workforce insulates the machine-learning company from the worst of the coronavirus.

The Australian company on Wednesday restated the fiscal 2020 guidance it issued in February for underlying earnings before interest, tax, depreciation and amortisation of between $125m and $130m. That would represent an increase of 24pc to 29pc on fiscal 2019.

Appen uses crowdsourced labour to collect and label data to train machine learning in fields such as speech and image. It said all staff are working safely and productively from home, with the exception of skeleton crews in secure facilities and staff in China, who have returned to their offices.

It noted that any slowdown in digital advertising or IT spending could yet hit earnings, while there were also risks from reduction or cancellation from its smallest customers, global hardware supply chain interruptions, and suspension of face-to-face projects such as audio data collection.

Nonetheless, support could come from a pandemic-led increase in the use of search, social media and e-commerce, an increase in available crowd workers due to lay-offs elsewhere, and a weaker Australian dollar.

Appen said it maintained cash resources in excess of A$100 million and is well positioned to exploit any opportunities.

APX shares last down 0.9pc to $23.89.

Dow Jones Newswires

11.03am: Afterpay virus impact ‘unclear’: UBS

UBS analyst Tom Beadle has cut Afterpay to Sell and trims his target price to $13.00, saying impacts from COVID-19 were “unclear”.

Combined with a downgrade from Goldman Sachs, the cut by UBS has trimmed almost 8pc off Afterpay today after it surged 29pc on a trading update yesterday.

“Ultimately what Afterpay reports will be a function of how much growth it’s prepared to sacrifice to manage bad debts, the severity and duration of COVID-19’s economic impact, and it’s ability to manage its risks,” he says.

His base case factors $11.5bn of underlying sales and 1.4pc in FY21E, with an upside scenario of $18.8bn or 2.0pc, and a downside scenario of $7.5bn/1.0pc respectively.

But he warns that Afterpay “remains reliant on materially uncertain long-term assumptions” along with other risks previously identified – competition, regulation, execution.

On the positive side, COVID-19 could also accelerate positive structural changes like movement away from cash, and a consumer shift to alternative credit.

In a downside scenario he sees FY25E underlying sales of $16bn giving a $7 per share valuation, with upside to $110bn giving a potential $36 per share valuation.

10.37am: ASX dives as confidence slumps

The worst Australian consumer confidence on record has pushed Australian shares down after an early rise.

Westpac’s consumer confidence index for April slumped 17.7pc on month to 75.6pc, its biggest monthly decline to the lowest level since the 1990s recession.

“It is pertinent to note that the lows in previous recessions were reached after one to two years of continuous deterioration compared to the one month collapse we have seen here,” Westpac chief economist Bill Evans says.

“Certainly we cannot rule out the Index dropping below the historic low of 64.6 we saw in November 1990.”

The S&P/ASX 200 is down 0.38pc at 5467.4 after initially rising 0.8pc to a 5-week high of 5533.

Nick Evans 10.30am: Panoramic pauses WA nickel mine

Troubled WA nickel producer Panoramic Resources says it has mothballed its Savannah nickel mine in WA’s Kimberley Region over the impact of coronavirus lockdowns, saying it cannot continue to operate the mine in the face of the restrictions.

While most mines in WA have won exemptions from internal movement restrictions and increased the length of work shifts to reduce the number of people moving within the state, Panoramic’s Savannah mine sits in the remote Kimberly region, which has tougher movement restrictions than the rest of WA because of fears the virus could devastate vulnerable indigenous communities.

Panoramic said in late March it believed it could operate the mine despite the restrictions, but said its board had now been forced to mothball Savannah.

“There are currently no cases of COVID-19 reported at the Savannah Nickel Mine. However, the situation is rapidly evolving and has changed materially since the Company provided its 27 March 2020 COVID-19 update,” Panoramic said in a statement.

“In particular, the pandemic is adversely impacting operations, including transportation, availability and cost of personnel, equipment and supplies at site, and controls at site, particularly given the heightened sensitivity within the Kimberley region and communities close to the operation.”

10.27am: ASX rallies to 5-week high

The local share surge is picking up speed, the benchmark ASX200 now up 0.8pc to a 5-week high of 5533 despite a 0.4pc fall in S&P 500 futures.

That follows a stronger-than-expected 3.1pc rise in the S&P 500 amid talk of restarting the US economy, as well as the Fed’s new support for commercial credit.

Positive momentum is also building in the Australian sharemarket due to a “fear of missing out” after the S&P/ASX 200 entered a bull market yesterday.

Large healthcare, financials and industrials are doing most of the heavy lifting, with CSL up 1.4pc, Macquarie up 2.5pc, Transurban up 2.5pc and a2 Milk up 4.4pc.

Lilly Vitorovich 10.24am: Media industry gets gov’t relief

The Morrison government will provide some short-term financial relief to the embattled media industry, including $41m in spectrum tax rebates and $50m for regional journalism, as the coronavirus crisis wipes out advertising revenue.

The government has also agreed to suspend Australian drama, children’s and documentary content quotas this year, which has been a thorn for the free-to-air television and subscription television companies for years. It will also fast-track the consultation process on how best to support Australian stories on screens.

Communications Minister Paul Fletcher said “many Australians are doing it tough right now and the media sector is sharing that pain, especially in regional areas”.

“Broadcasters and newspapers face significant financial pressure and COVID-19 has led to a sharp downturn in advertising revenue across the whole sector,” he said in a statement on Wednesday.

Seven West Media shares are up 16pc on the news to 9.7c, as Nine Entertainment trades up 0.9pc to $1.19.

Read more: Virus cash for media

10.14am: Shares cautiously higher

Shares are edging higher in early trade, not quite the rally seen on Wall Street overnight as energy stocks trim some of the lift.

At the open, the benchmark ASX200 is up by 23 points or 0.4 per cent to 5510.6.

The energy sector is lower by 1.2 per cent after a 10pc drop in oil prices, while health stocks outperform thanks to a 1.4pc lift in CSL.

QBE is trading higher by 0.8pc after its successful equity raise, along with InvoCare, who is trading up 2.5pc.

10.04am: Magellan too expensive: Morgan Stanley

Morgan Stanley’s Andre Stadnik says Magellan Financial shares are “too expensive”.

He says a “rare retail outflow” of $300m last month may signal a “maturing customer profile” in unlisted funds that “leaves Magellan more exposed to elevated gross outflows than investors appreciate”.

“The lack of product diversity also means MFG does not have a more defensive strategy for clients seeking less market risk,” he adds, tipping retail flows to remain negative for the next six months before stabilising.

Mr Stadnik remains Underweight on Magellan and has cut his target 20pc to $40 a share.

9.59am: ANZ confidence survey shows lift

Signs of a slowdown in virus cases, along with further government stimulus, helped consumer confidence to edge higher for a second week, according to ANZ.

In the bank’s weekly consumer survey, confidence gained almost 9pc, adding to a jump of 10pc in the previous month.

Respondents perception of current financial conditions gained 8.7pc, while future financial conditions rose by 7.9pc.

“Confidence is now up close to 20pc from the historic low reached over the last weekend in March. Despite this, it is still some way below the levels seen during the GFC,” head of Australian economics David Plank says.

ANZ-Roy Morgan Australian Consumer Confidence: The Governmentâ€™s fiscal packages and the flattening pandemic curve are helping confidence make further gains. Confidence is now up close to 20% from the low of the last weekend in March. @DavidPlank #ausecon @roymorganonline pic.twitter.com/bR501mqEqk
— ANZ_Research (@ANZ_Research) April 14, 2020

9.35am: ASX may stride higher in new bull market

Positive momentum in the Australian sharemarket may build today after the S&P/ASX 200 entered a “bull market” yesterday.

Overnight futures were relatively flat, but the S&P 500 surged 3.1pc which is about twice the rise indicated by futures at the Sydney close.

WTI crude plunged 10pc to $US20.11 – near the lowest close since 2002 – on reports Saudi Arabia is selling cheap crude to Asia and will pump more next month. That made Energy the weakest S&P 500 sector but it fell by a surprisingly small 0.5pc.

Financials also underperformed with JPMorgan and Wells Fargo down sharply on provisions for a recession.

S&P 500 futures are down 0.4pc this morning which may take the edge off the Australian market initially but continued talk by US leaders including Donald Trump about reopening the US economy may help sentiment.

Investor “fear of missing out” may intensify after the S&P/ASX 200 entered a bull market too.

Chart support may now emerge on dips to the April 7 peak at 5423. Resistance may emerge at former support/resistance at 5539.

Westpac’s monthly consumer confidence data for April is due at 10.30am AEST.

Bridget Carter 9.24am: Electro Optic raising $134m

DataRoom | Electro Optic Systems is raising $134m by way of a placement through investment bank Citi.

Shares are being sold in the software company at $4.75 each, a 17.4 per cent discount to their last closing price of $5.75.

The company said this morning logistical issues were causing delivery and payment delays under some existing contracts, estimated to trim $9m from full year earnings expectations.

EOS said it was launching the raise to fund working capital for inventory expansion, investments to maintain growth and additional liquidity.

Bridget Carter 9.21am: Existing investors only for QBE raise

DataRoom | Strong demand for QBE’s $1.2bn-plus equity raising meant only existing shareholders secured additional stock in the insurance company.

The message on the equity raising take up was sent out to investors Wednesday morning.

It comes after QBE on Tuesday raised $1.2bn through an institutional placement, with shares sold at $8.25 each, a 9.4 per cent discount to the closing price of $9.11.

9.20am: Shutdowns trim Lynas output by 18pc

Lynas Corp’s third-quarter rare earths oxides production has dropped 18 per cent due to coronavirus-led shutdowns at its Malaysian processing plant and limited operations at its flagship mine in Australia.

The ASX-listed company produced 4465 tonnes of rare earths oxides in the quarter ended March 31, compared with 5444 tonnes last year. The miner said production of neodymium praseodymium or NdPr, used to make high- strength permanent magnets found in ventilators, computers and wind turbines, fell 14 per cent to 1369 tonnes.

Reuters via AAP

Lynas Corp $LYC increased production over the March Q, while sales revenue rose by ~6% '...despite subdued production levels in early January...& the complete shutdown of the plant in late March in response to the MCO issued by the Malaysian govt' #ausbiz pic.twitter.com/QDEVv7f8TC
— CommSec (@CommSec) April 14, 2020

9.08am: InvoCare upsizes placement to $200m

Funeral home operator InvoCare has upsized its equity raising to $200m, citing significant demand from investors.

The group yesterday announced a planned $150m placement to provide support for its growth initiatives as restrictions on funeral attendees reins in its revenue.

In a notice this morning, InvoCare said it increased the placement to $200m after demand from existing and new investors, with shares offered at $10.40 apiece.

“With a strengthened balance sheet InvoCare is well positioned to weather the current market uncertainties while continuing to maintain momentum in its growth strategies to deliver long-term value to its shareholders,” chief Martin Earp said.

On the completion of the placement, expected on Friday, the group will also offer up to $50m in shares to eligible investors in its share purchase plan.

IVC last traded at $11.28.

InvoCare chief executive Martin Earp. Picture: Lyndon Mechielsen/ The Australian.

9.04am: What’s on the broker radar?

Adelaide Brighton raised to Overweight – JP Morgan
Afterpay cut to Neutral – Goldman
BlueScope cut to Neutral – Citi
CSR raised to Neutral – JP Morgan
Coca-Cola Amatil cut to Neutral – JP Morgan
G8 Education raised to Buy – UBS
G8 Education raised to Neutral – Macquarie
Graincorp reinstated at Outperform – Credit Suisse
Inghams rated new Buy – Bell Potter
Magellan target price cut 20pc to $40 – Morgan Stanley
Mesoblast rated new Hold – Jefferies
Northern Star raised to Buy – Shaw and Partners
Prospa Group raised to Neutral – Macquarie

Damon Kitney 8.57am: Bubs China sales double amid lockdown

Goats milk infant formula producer Bubs Australia has posted record quarterly revenue of $19.7m, up 67pc on the previous year and up 36pc on the previous quarter.

The company said it experienced a significant increase in demand through all channels in the three months to March 31, with direct sales to China more than doubling.

Bubs recorded positive quarterly operating cashflow of $2.3m and had a strong cash balance at the end of the quarter of $36.4m.

“This quarter demonstrated the strength of our business model and agility of our team to continue to meet the needs of our Bubs Family in a challenging operating environment, and I am pleased that we have been able to maintain our sales momentum and deliver on our main objectives,’’ said Bubs founder and CEO Kristy Carr.

“The Bubs infant formula range performed strongly, up 137 per cent over the prior comparable period and 33 per cent quarter-on-quarter.”

She said the company’s strong financial flexibility meant it was well positioned to take advantage of a dynamic and evolving market.

Bubs shares have almost doubled in value on the ASX over the last month to trade at 87c after plunging to a 12-month low in mid-March.

8.49am: Oz Minerals boosts liquidity buffer

Oz Minerals bolstered its financial buffer by expanding its revolving debt facility by 60pc, while stating the COVID-19 pandemic hasn’t had a material impact on production so far.

Oz Minerals extended its revolving credit facility to $480m from $300m, and said this had provided “an additional liquidity buffer should it be required as we continue to fund the ramp-up of Carrapateena and development of the Carajás Hub”.

Oz Minerals reported copper production of 20,231 tonnes in the three months through March, which is the company’s fiscal first quarter. Gold output totalled 55,606 troy ounces, led by production from its Prominent Hill mine in South Australia.

Management said all-in sustaining costs averaged $US0.749/lb in the first quarter, below annual guidance for between $US1.15-$US1.30/lb.

“Despite the COVID-19 pandemic constraints and response to protect the health of our employees, other stakeholders and business generally, the operations delivered a strong opening to 2020 with only critical frontline roles on site in the latter half of the quarter,” Chief Executive Andrew Cole said.

Dow Jones Newswires

Cameron Stewart 8.43am: Trump halts WHO funding

Donald Trump has halted US funding of the World Health Organisation, saying the UN agency failed in its responsibility to warn the world about the deadly nature of the coronavirus.

Mr Trump said WHO failed in its ‘basic duty’ to ‘obtain information in a timely and transparent fashion’ about the nature and contagious risk posed by the virus as it emerged in Wuhan in China.

The president accused WHO of ‘severely mismanaging and covering up’ the coronavirus and of taking China at its word about claims that the virus could not be transmitted to humans.

“The WHO willingly took China’s assurances at face value … even praising china for its so-called transparency,” Mr Trump said “The WHO said it was not communicable, saying there was no need for travel bans.”

He said the US, which is easily the largest funder of WHO, would suspend its $US400 million to $US500 million annual contribution pending a review into the actions of the agency.

President @realDonaldTrump is halting funding of the World Health Organization while a review is conducted to assess WHO's role in mismanaging the Coronavirus outbreak. pic.twitter.com/jTrEf4WWj0
— The White House (@WhiteHouse) April 14, 2020

8.08am: Aid for US airlines

US Treasury Secretary Steven Mnuchin said the nation’s major airlines have tentatively agreed to terms for $US25 billion in federal aid to pay workers and keep them employed through September.

The deals aren’t final, but the assistance is almost certain to be a mix of cash and loans, and the government could take a small ownership stake in the leading airlines.

The airlines did not want to give up equity, but Treasury demanded compensation for taxpayers. The airlines have little leverage – their business has collapsed as the COVID-19 pandemic reduces air travel to a trickle and they face mass lay-offs without the federal aid.

The nation’s six biggest airlines – Delta, American, United, Southwest, Alaska and JetBlue – along with four smaller carriers have told the Treasury Department they plan to take part, and discussions are continuing with others, Mnuchin said.

8.00am: Copper at four-week high

Copper prices have hit a four-week high, boosted by coronavirus-linked supply disruptions and expectations of stronger demand, although gains were capped by caution over the pace of an economic recovery.

Benchmark copper on the London Metal Exchange was up 2.9 per cent at $US5,163 a tonne at. Prices of the metal used by investors as gauge of economic health touched $US5,200 earlier, the highest level since March 17.

“Some people are convinced things are improving and are positioning accordingly, but a V-shaped recovery could turn out to be an illusion,” said Peter Fertig, analyst at Quantitative Commodity Research.

“China is starting up, but we are far from normalisation, price gains could be getting ahead of economic reality.” China is the world’s largest consumer of copper and other industrial metals.

Reuters

7.50am: Oil price slumps

Oil prices have dropped sharply, with US prices sliding back toward $US20 a barrel, as investors bet that fuel demand destruction caused by the coronavirus pandemic would be too much for producers embarking on record global output cuts to offset.

Global oil-producing nations are expected to reduce production by as much as 19.5 million barrels per day, but those cuts are being implemented slowly and in some cases will not start for weeks.

By contrast, demand plunged by roughly 30 per cent worldwide several weeks ago, causing refiners and producers suddenly stuck with oil to stick it into rapidly filling storage.

US West Texas Intermediate crude settled at $US20.11 a barrel, down $US2.30 or 10.3 per cent, as one prominent pipeline executive told Texas regulators that storage would be filled by mid-May.

WTI is not far from where markets traded prior to a rally founded on hopes for the OPEC+ production deal inked over the weekend.

Brent crude futures fell $US2.14, or 6.7 per cent, to settle at $US29.60 a barrel.

Reuters

7.30am: Aged care pleads for rescue

Aged care providers are pleading for a $1.3 billion federal rescue package to keep the sector afloat as they shoulder the cost of keeping residents and home care recipients safe from COVID-19.

Providers say measures to contain the spread of the virus such as employing concierges to enforce strict visitation rules and price rises for personal protective equipment are hitting already stretched budgets.

“We need an emergency intervention to ensure we can stay open and continue to keep people safe,” Aged and Community Services Australia chief executive Pat Sparrow told Nine newspapers. “We are already under pressure. There are additional costs to us of keeping people safe and that’s what we want to do.”

7.20am: ASX tipped to edge higher

The Australian share market is tipped to open higher after a strong overnight session on Wall Street, where investors were buoyed by signs coronavirus lockdown measures could begin to ease.

At 7am (AEST) the SPI200 futures contract was up 10 points, or 0.18 per cent, to 5,500.0 points, suggesting local stocks will climb again after hitting their highest point in a month the previous session.

The S&P/ASX200 benchmark index dipped 27 points in early trading after the Easter break but climbed steadily after the first hour to finish Tuesday up 100.8 points, or 1.87 per cent, to 5,488.1.

The bourse has now recovered 1,085.6 points, or 24.7 per cent from its March 23 nadir – when it had declined 2,794.7 points, or 38.8 per cent, from its February 20 all-time peak.

US stocks surged overnight after the White House said President Trump would be making a number of announcements about reopening the US economy in the next day or two as the health crisis appeared to be easing.

The Dow Jones Industrial Average rose 558.99 points, or 2.39 per cent, to 23,949.76, the S&P 500 gained 84.43 points, or 3.06 per cent, to 2,846.06 and the Nasdaq Composite added 323.32 points, or 3.95 per cent, to 8,515.74.

The Australian dollar was buying US64.42 cents at 7am (AEST), up from US64.10 cents at the close of markets on Tuesday.

AAP

6.12am: US stocks surge

US stocks surged as investors looked ahead to the eventual reopening of the economy, even as earnings reports from big banks indicated that the coronavirus is taking a toll.

The Dow Jones Industrial Average rose about 560 points, or 2.4 per cent, continuing last week’s historic rally. The S&P 500 jumped 3.1 per cent, and the Nasdaq Composite rose nearly 4 per cent.

The gains gave the blue-chip index its fourth advance in the past six trading days. Stocks have charged higher on signs that the coronavirus pandemic is slowing in hard-hit locations — so much so that two groups of governors began discussing this week how they would gradually ease social-distancing guidelines. No timeline has been set.

Still, the Dow industrials are down roughly 20 per cent from their mid-February high.

After surging yesterday to usher in a new bull market, the ASX is tipped to edge higher at the open. At 6am (AEST) the SPI future index was up 13 points, or 0.2 per cent.

The recent optimism by government leaders — and, in turn, investors — stands in sharp contrast to the realities playing out for businesses and Americans.

Additionally, the International Monetary Fund said Tuesday that the global economy is almost certainly in a recession, with its chief economist predicting that the downturn will be worse than the global financial crisis a decade ago.

The start of earnings season revealed the growing damage already seen from the coronavirus. JPMorgan Chase and Wells Fargo reported steep declines in first-quarter profits as they set aside billions of dollars for potential losses on loans to consumers and companies.

The possibility of more pain ahead sent some investors into safer assets. The yield on the 10-year U.S. Treasury note edged up to 0.751pc, down from 0.749pc Monday. Yields fall as bond prices rise.

Front-month gold futures also gained 0.7pc to $US1,756.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

Meanwhile, Brent crude, the global benchmark for oil, dropped nearly 7pc to $US29.60 a barrel. Despite historic oil production cuts that were agreed to over the weekend, analysts expect energy demand to remain low and crude inventories to continue to swell.

Outside the U.S., the pan-continental Stoxx Europe 600 advanced 0.6pc. Japan’s Nikkei 225 closed 3.1pc higher, boosted by electronics and retail stocks, while South Korea’s Kospi Composite advanced 1.7pc.

Stocks in mainland China were buoyed by better-than-feared trade data, which showed exports dropped 6.6pc in March from a year earlier. Economists polled by The Wall Street Journal had forecast declines of 15.9pc. The benchmark Shanghai Composite Index closed up 1.6pc.

Dow Jones Newswires

5.57am: Oil falls

Benchmark US crude oil fell $US2.30, or 10.3pc, to settle at $US20.11 a barrel.

Brent crude oil, the international standard, fell $US2.14, or 6.7pc, to $US29.60 a barrel.

5.55am: Adidas eyes state-guaranteed loan

German sportswear maker Adidas said it had received approval for a 3 billion euro ($US3.3 bn) loan largely funded by the German government to help it weather the impact of the coronavirus crisis.

“Today, the company received the approval of the German government for the participation of KfW, Germany’s state-owned development bank, in a syndicated revolving loan facility … to bridge this unprecedented situation,” Adidas said in a statement.

The syndicated loan would comprise 2.4 billion euros from German public lender KfW, with a further 600 million coming from Adidas’ partner banks including HSBC, UniCredit and Deutsche Bank, the company said.

“One of the conditions … is that Adidas de facto suspends dividend payments for the duration of the facility,” the company said, adding that it would “repay any used portion of the loan, including interest and fees, as quickly as possible.”

Adidas has been approved for a German government loan. Picture: AP

AFP

5.50am: JPMorgan, Wells Fargo profits hit

Earnings plunged at JPMorgan Chase and Wells Fargo Tuesday as both US banking giants set aside billions of dollars to cover loans vulnerable to the economic devastation from coronavirus shutdowns.

Pointing to what Chief Executive Jamie Dimon called the “likelihood of a fairly severe recession,” JPMorgan booked reserves of nearly $US8.3 billion, including a build of $US6.8 billion in the first quarter.

Wells Fargo announced a reserve build of $US3.3 billion. Like their counterparts at JPMorgan, Wells Fargo executives signalled the number would rise further.

“If confidence does deteriorate and the shelters-in-place stay on for longer, it wouldn’t surprise me if the loss estimates would have to go up,” Wells Fargo Chief Executive Charlie Scharf told analysts on a conference call.

“There’s more downside than upside given the uncertainty in this environment.”

The reserves led to staggering drops in first-quarter profits at both banks. Bank of America, Goldman Sachs and other large banks report later this week.

The biggest US bank by assets, JPMorgan reported profits of $US2.9 billion for the quarter ending March 31, down 69 per cent from the year-ago period. Revenue dipped three per cent to $US28.3 billion.

Wells Fargo, meanwhile, reported first-quarter profits of $US653 million, down 89 per cent from the year-ago period. Revenues fell 18.2 per cent to $US5.8 billion.

AFP

5.45am: Stocks climb on China data

Stock markets mostly rose as better-than-expected Chinese trade data lifted some of the economic gloom wrought by the coronavirus pandemic.

Oil prices fell, despite US President Donald Trump claiming that producers were mulling a global daily output cut of 20 million barrels.

The US dollar dropped against main rivals, helping to push gold above $US1,700 an ounce — the highest level for more than seven years, according to traders.

“Markets continue to react in an odd way, mostly ignoring all the bad figures that have come their way and focusing on the positives, such as the China figures,” said Chris Beauchamp, chief market analyst at IG trading group.

Asian stock markets kicked off the day with gains after official data showed Chinese exports fell 6.6 per cent and imports slid 0.9 per cent in March on a yearly basis.

“The data coming out of China is a rough leading indicator for the rest of the world,” noted Jasper Lawler, head of research at London Capital Group.

“The smaller exports drop is a clue that China’s first-quarter growth figures released on Friday could also surprise on the topside.”

There were plenty of dismal figures that investors could have chosen to focus upon.

The IMF issued a stark warning that the coronavirus crisis would trigger a global recession that would very likely be the deepest economic contraction since the 1930s.

Markets’ focus was meanwhile firmly also on oil.

“There is still a lot uncertainty over whether the reduction in output will be enough,” said Neil Wilson, chief market analyst at trading website Markets.com “The biggest uncertainty for oil is how quickly does demand recover in the medium term? Indeed, this is the central question for risk assets in general,” he added.

Oil prices have crashed as the coronavirus outbreak sends demand off a cliff, with a Saudi-Russian price war having compounded the crisis. While they rose ahead of the weekend deal, they fell back by 5 per cent on Tuesday.

In European markets, London ended down 0.9 per cent, Frankfurt rose 1.3pc and Paris ended 0.4pc higher.

AFP

5.40am: J&J slashes outlook

Johnson & Johnson, anticipating significant impact from the COVID-19 pandemic, slashed its 2020 sales forecast by billions of dollars and cut its profit expectations by about 15pc.

It’s one of the first major U.S. corporations to report first-quarter earnings and likely a harbinger of things to come as the outbreak disrupts the global economy.

The world’s biggest health products maker on Tuesday said it now expects 2020 revenue of $US77.5 billion to $US80.5 billion, down from its January forecast of $US85.4 billion to $US86.2 billion. It also forecast adjusted earnings per share of $7.50 to $7.90, down from the January forecast of $9 to $9.15 per share.

Despite that, the company increased its quarterly stock dividend, for the 58th consecutive year, from 95 cents to $1.01 per share.

5.37am: France court order to Amazon

A French court has ordered Amazon to stop selling, storing or delivering non-essential goods for the next month to protect its employees from the virus.

The emergency ruling requires Amazon to evaluate health risks at all its facilities nationwide and negotiate new safety measures with worker representatives, according to lawyers for unions that launched the legal proceedings.

The court stopped short of halting all Amazon activity, as unions had sought. Amazon must suspend its non-essential trade within 24 hours of Tuesday’s ruling or face 1 million euros ($1.1 million) in fines per day, said lawyer Judith Krivine. Sales of food, medicine and hygiene supplies are still allowed.

An Amazon distribution centre in France. Picture: AFP

AFP

5.35am: Gold shoots to 7-year peak

Gold struck a seven-year pinnacle above $US1,700 an ounce Tuesday as massive Fed stimulus floods markets with dollars, weakening the greenback and sending investors running to the precious metal, analysts said.

Late Tuesday (AEST), gold rallied to $US1,731.25 an ounce on the London Bullion Market, striking a peak last seen in November 2012.

The US dollar slid against main rivals in the wake of the Federal Reserve’s ongoing stimulus policies that are aimed at cushioning the blow to the world’s biggest economy from the deadly COVID-19 outbreak.

This has made dollar-denominated commodities like gold cheaper for buyers holding rival currencies.

AFP

5.30am: Renault closing main China business

Renault SA said it will shut down its main China business and focus on electric and commercial vehicles.

The French automaker’s 7-year-old joint venture with state-owned Dongfeng Motor Corp. already was suffering from lacklustre sales before the outbreak of the coronavirus crushed Chinese demand.

China is the auto industry’s biggest global market but competition is intense and total sales have fallen since their 2017 peak.

First-quarter sales this year fell 45.4pc to 2.9 million cars, SUVs and mini-vans after Beijing closed dealerships and told consumers to stay home to stop the virus’s spread.

Renault’s factory is in Wuhan, the central Chinese city where the outbreak began in December.

5.25am: China to avoid recession: IMF

Some of Asia’s biggest economies are likely to narrowly avoid recession this year and are poised to bounce back strongly in 2021 if the coronavirus is contained, the IMF forecast, with China leading the recovery.

The pandemic has hammered the world economy, with millions of jobs lost and businesses shut because of unprecedented lockdown measures to slow the spread of the disease.

But unlike the United States and major Western nations, China — the world’s second-largest economy — will scrape through 2020 without going into recession, the IMF said in its latest World Economic Outlook.

It predicted growth of 1.2 per cent growth for China this year, the slowest expansion in more than four decades.

AFP

5.20am: Pandemic recession could get worse: IMF

The coronavirus pandemic is pushing the global economy into its deepest recession in a century, cutting world output by three per cent this year, the International Monetary Fund said.

If the virus is contained and economies can begin operating again, 2021 should see a rebound of 5.8 per cent, according to the IMF’s latest World Economic Outlook.

But the authors acknowledged the difficulty in making an accurate forecast amid the rapidly changing situation.

With much of the global economy shutdown amid efforts to contain the virus and keep health systems from collapsing, the IMF warned that there are “severe risks of a worse outcome,” due to the “extreme uncertainty around the strength of the recovery.” The US economy is expected to contract by 5.9 per cent but see growth recover by 4.7 per cent next year.

However, the forecasts assume the pandemic will fade in the second half of the year.

5.15am: JPMorgan reports 69pc profit drop

JPMorgan Chase reported a staggering decline in first-quarter earnings after setting aside nearly $US8.3 billion for loans vulnerable to the economic devastation from coronavirus shutdowns.

The biggest US bank by assets reported profits of $US2.9 billion for the quarter ending March 31, down 69 per cent from the year-ago period. Revenue dipped three per cent to $US28.3 billion.

Chief Executive Jamie Dimon described the bank’s underlying results as “extremely good” during the first quarter, but said the addition of large credit reserves was needed because of the “likelihood of a fairly severe recession.”

The bank said in a press release that the reserve build reflects “deterioration in the macro-environment as a result of the impact of COVID-19 and continued pressure on oil prices.”

The provisions included $US4.4 billion, primarily in its credit card business, and $US2.4 billion across businesses, with the biggest amounts in oil and gas, real estate and retail.