New cases in Europe seem to be on a falling trend as attention turns toward the winding down of the economic shutdowns across the continent. But news is mixed in the US, with reports pointing at significantly higher contagion numbers in New York compared with the official counts. Fatalities in California rose the most during the last 24 hours.

WTI crude recovered to $18 a barrel as Iran joined Trump’s strategic battleship game to wreak havoc in the Mid-East to support oil prices, as cutting production - which would be the most gentle way of dealing with the oversupply issue, seems to be an unachievable dream for distressed oil producers. Iran responded to Trump’s yesterday tweet by saying that they would bring down any US vessel that endanger the Iranian ships in the Persian Gulf. But the recovery in oil prices are expected to remain capped as geopolitical tensions could hardly threaten supply in a meaningful way provided the broadly flooded oil market. Resistance should come in play near the $20 level and above.

Still, energy companies are poised to react to any sign of recovery in the oil markets. Exxon Mobile (+3.31%) was among the leading stocks in the Dow Jones, as BP closed 2.20% higher in London.

But improved oil prices didn’t improve mood in FTSE futures (-1.58%) that hint at a bearish open in London today.

DAX futures (-2.52%) are also expected to fall as the conclusions of Thursday’s EU summit fell short of investor expectations. EU leaders agreed on a 540-billion-euro rescue package to combat the coronavirus-led economic slowdown, to work towards a Recovery Fund and increasing the EU budget to finance it by around 2% of gross national income, but they failed to agree on details around this package and sent the ball to the European Commissions (EC) camp, which is now asked to come up with a proposal. The release gave little insight on the 2-trillion aid investors were looking for. The EURUSD slipped below 1.08 on worries that the coronavirus crisis could tear the European block apart, as core countries would be tempted to save themselves first before saving the others. Released yesterday, April flash PMI data showed important contraction in activity, but given a near-complete economic shutdown, the numbers - though significantly lower than analyst expectations, weren’t a shocker.

The British services PMI fell to a never-seen 12.3 low as businesses shut down to contain the coronavirus contagion in late March.

Released this morning, core retail sales in the UK sank 5.1% m-o-m in March versus a 4.0% decline penciled in by analysts amid shop and business shutdowns took a heavy toll on activity. Figures were lower than analyst estimates, but the pound remained resilient faced with the terrifying data pointing that the UK is heading toward a historic economic recession, while preparing to part ways with the EU as soon as the end of this year. Still, the dampened mood could drag sterling toward the 1.23 mark against a gradually strengthening US dollar across the board.

On the earnings side, American Airlines earnings are due today before the opening bell and the latest EPS estimate points at -2.26, like Delta Airlines which has posted its first loss in 9 years earlier this week. Now it is not said that the headline figures will shoot the stock price down. The ultra-low oil prices should decrease operating costs and redress the airline companies’ results in the coming quarters, but it will also depend on how fast the activity will pick up. American Airlines shares dropped from 30 to 9 since February, a quite dramatic fall. We see opportunity in buying the dip in airline stocks where the downside potential is probably, almost-fully exploited, as the coronavirus-led sell-off has certainly hit a bottom near these levels. Government help to save the airline companies should also help bettering the investor mood.

One last word for this week. With the coronavirus pandemic sitting almost alone in the global headlines since the beginning of the year, we have almost forgotten the US-China trade war. Though the last season of US-China trade saga ended on hope amid the signature of the phase-one trade deal, the future of negotiations and the signature of a more comprehensive deal between the two countries seem increasingly under threat. As the ‘Chinese virus’, as Trump calls it, has landed full force in America and paralyzed life and businesses, the blame game has already started deteriorating the relationship between Washington and Beijing.