EasyJet planes parked on the tarmac at Luton Airport after the airline announced it has grounded its entire fleet of 344 aircraft due to the coronavirus pandemic, in Bedfordshire, England, Monday March 30, 2020.The highly contagious COVID-19 coronavirus has impacted on nations around the globe, many imposing self isolation and exercising social distancing when people move from their homes. (Jonathan Brady/PA via AP)
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Monday related to the global economy, the work place and the spread of the virus.
AIRLINES: The founder and top shareholder of European carrier easyJet says the company has enough money only to get through August at best and wants to cancel a 4.5 billion-pound ($5.5 billion) contract with planemaker Airbus for what he calls 107 “useless aircraft."
In a long statement to the media, Stelios Haji-Ioannou says that terminating the contract is the only way for shareholders to retain any value in their holdings in the company. EasyJet, which flies predominantly in Europe, has grounded all 344 planes and like other airlines is struggling mightily with the global lockdowns on business and travel.
European companies are expected to get financial support from the government, though unlike the U.S. there has not been a coordinated regional plan to bail out airlines or planemakers.
In the U.S., Delta Air Lines, American Airlines, United Airlines and JetBlue have said they applied Friday for their share of $25 billion in federal grants designed to cover airline payrolls for the next six months. None disclosed the amount they are seeking. The grant money was part of $2 trillion relief bill approved last week. Delta’s CEO says his airline is burning more than $60 million cash per day, and United’s president puts it at $100 million a day.
Singapore, meanwhile, said it will suspend its Changi Airport Terminal 2 for 18 months from May 1. The airlines in Terminal 2 will be reallocated across the remaining terminals.
Its Terminal 4 operations have also been scaled down considerably, and Changi Airport may consider suspending operations temporarily if the remaining airlines choose to suspend or adjust their flight schedules.
STIMULUS: Japanese Prime Minister Shinzo Abe is preparing to announce a 108 trillion yen ($1 trillion) economic package to help the country weather the coronavirus crisis. Abe said Monday he plans to disclose details of the package as early as Tuesday.
Japan, the world’s third-biggest economy, was already in a contraction late last year before the virus outbreak walloped business and travel. The government has been slow to roll out containment measures, on a piecemeal basis, and only recently announced it would postpone the Tokyo 2020 Olympics by one year. But a surge in infections has prompted Abe and other leaders to discuss more stringent methods to contain the pandemic. Abe is expected to announce a state of emergency on Tuesday, at least for the hardest-hit big cities, such as Tokyo.
Japan’s package amounts to about one-fifth of its economy and includes 6 trillion yen in ($55 billion) in cash benefits, loans to help protect jobs and extensions of deadlines for for taxes and social benefit payments.
Companies Mentioned in This Article
10 Oversold Stocks That Are Ready For a Comeback
A fundamental concept of investing is to buy stocks at a value. One strategy used by investors is to focus on stocks that are oversold. Fundamental analysis can give investors an idea of certain stocks to look at. However, momentum is also important. For that reason, investors look for technical indicators to help them find oversold stocks that might be ready for a comeback.
One of the most popular tools is the Relative Strength Index (RSI). The RSI is a momentum indicator that measures the velocity and magnitude of price movements. The index also compares them with the magnitude of average gains and average losses.
The formula for calculating RSI is as follows:
RSI = 100 - ( 100 / 1 + RS)
Where RS (Relative Strength) is the average gain divided by the average loss.
Investors can use virtually any timeframe they wish. One of the most common is a 14-day RSI. Decreasing the number of days makes the RSI more sensitive to price changes. Conversely increasing the number of days makes the indicator less sensitive to price changes.
Investors may have different overbought or oversold indicators, but standard benchmarks are a stock may be overbought if its RSI exceeds 70 and may be oversold if its RSI exceeds 30.
The stocks in this presentation are chosen for a variety of fundamental and technical indicators. And all the stocks have been affected in one form or another by the Covid-19 pandemic.
View the "10 Oversold Stocks That Are Ready For a Comeback".