Global Fundamental Analysis 01/12/2020

Global Fundamental Analysis 01/12/2020, FP Markets

Opening Call: The Australian share market is to open higher.

U.S. stocks edged lower but maintained strong monthly gains. The yield on the 10-year Treasury was flat at 0.84%. The WSJ Dollar Index rose to 86.81.

Oil prices slipped as OPEC put off a decision on maintaining output cuts. Gold prices continued their recent trend lower.

Australian Market

Australia’s S&P/ASX 200 index also reversed early gains, falling 1.3%, and wiping out all its gains of the previous week.

US Market

Stocks slipped but held on to hefty gains for the month, capping a furious November rally fueled by investors’ bets that scientists are closer than ever to finalizing Covid-19 vaccines to fight the pandemic.

The market’s momentum faded on the final trading day of November, with the Dow Jones Industrial Average falling 0.9% as of the 4 p.m. ET close of trading.

But even with Monday’s slide, stocks ended the month with historic gains. The blue-chip average was up nearly 12% for the month, its biggest gain since January 1987. The S&P 500 finished November with a 10.8% gain and the Nasdaq Composite was up 11.8% for the month.

Commodities

Gold futures declined, capping a troubling month for the haven asset that saw prices mark their lowest settlement since early July, following a loss of nearly 6% for the month of November.

February gold fell 0.4% to settle at $1,780.90, after futures lost over 4% last week, marking the steepest weekly slide since Sept. 25, based on the most-active contract.

Monday’s settlement was the lowest since July 1.

Gold futures lost 5.6% for the month, according to Dow Jones Market Data.

Oil Futures

Oil futures settled a bit lower as the Organization of the Petroleum Exporting Countries and its allies continued to debate the fate of existing output curbs in the face of a renewed rise in Covid-19 cases in the U.S. and Europe.

But crude logged a sharp monthly rise in November, buoyed by hope for a vaccine that would ease virus-related economic restrictions and losses in energy demand.

West Texas Intermediate crude for January delivery edged down 0.4% to settle at $45.34 a barrel on the New York Mercantile Exchange. The U.S. benchmark saw a 26.7% monthly advance in November, based on the front-month contract, according to Dow Jones Market Data.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.20 to lows near US$1.1926 and was near US$1.1930 at the US close. The Aussie dollar fell from highs near US73.92 cents to lows near US73.39 cents and was near US73.45 cents at the US close. And the Japanese yen fell from near 103.82 yen per US dollar to JPY104.40 and was near JPY104.35 at the US close.

European Markets

European sharemarkets closed lower on Monday. The panEuropean STOXX 600 index fell by 1%, but was still up 13.7% in November – its best month since records began in 1986. Oil and gas shares shed 3.4% on Monday. ABN Amro shares were down 8.9% after announcing job cuts. The German Dax index lost 0.3%. And the UK FTSE index dropped 1.6% with London-listed shares of Rio Tinto (-1.8%) and BHP (-2.3%) both down.

Asian Markets

Earlier Monday, China’s major stock benchmarks settled mostly lower after bank shares fell. The Shanghai Composite Index slipped 0.5% after nearly touching its highest point so far this year, according to data provider Wind.

The Shenzhen Composite Index also closed 0.2% lower, but the ChiNext Price Index gained 0.5%.

The Hang Seng Index closed 1.6% lower, with shares of oil companies weighing.

The Nikkei Stock Average reversed early morning gains to end 0.8% lower, weighed by financial stocks.

  • Global Fundamental Analysis 01/12/2020, FP Markets
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