Global Fundamental Analysis 08/03/2021

Global Fundamental Analysis 08/03/2021, FP Markets

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

 U.S. stocks posted strong gains after positive U.S. employment data. The yield on the 10-year Treasury rose to 1.57%, but was well off session highs. The WSJ Dollar Index rose to 86.77. Oil prices rose a day after OPEC+ announced its production plans. Gold prices fell amid a firmer dollar.  

Australian Market

Australia’s S&P/ASX 200 closed 0.7% lower, falling for a second straight session as the materials, health and tech sectors continued to weigh. Many stocks that began 2021 strongly have reversed as the benchmark index followed U.S. indexes lower. The ASX 200 gained 0.6% for the week, ending a run of three consecutive weekly losses.

US Market

U.S. stocks closed out a volatile trading week with gains among cyclical sectors and losses in technology shares as a healing economy and surge in government-bond yields led investors to reassess their positioning.  

The S&P 500 rose 1.95% on the day, while the Dow Jones Industrial Average advanced 1.85%. The Nasdaq Composite added 1.55%.  

The S&P 500 ended the week with modest gains, as advances by the energy, financial and industrial sectors weighed against declines in the technology and consumer discretionary groups. The tech-heavy Nasdaq Composite, meanwhile, finished the week with a decline of about 2.1%-its third consecutive week losing ground.  

The Dow Jones Industrial Average, which is less oriented toward fast-growing technology stocks, enjoyed the largest weekly gain of the major indexes, about 1.8%.  

“This last week has been a classic correction in growth versus value,” said Tom Plumb, president and portfolio manager at Plumb Funds. “But it doesn’t mean that it portends something much greater.”

Commodities

Gold futures ended below the $1,700 mark, with prices for the precious metal posting a third straight weekly loss.  

The U.S. dollar index touched its highest level in over three months and Treasury yields briefly topped 1.6% as the latest employment report showed larger-than-expected job gains in February.  

Gold for April delivery on Comex fell 0.1% to settle at $1,698.50 an ounce. Prices for the most-active contract ended at their lowest since June 5, FactSet data show.

Oil Futures

U.S. and global benchmark crude-oil prices logged their highest settlements since 2019, up more than 7% for the week, a day after the Organization of the Petroleum Exporting Countries and its allies, in a surprise move, said they would roll over current production cuts to the end of April.

Saudi Arabia also extended its voluntary output cut of one million barrels per day, which was due to expire at the end of March, through the month of April, though Russia and Kazakhstan have been allowed a modest production boost for next month.  

West Texas Intermediate crude for April delivery rose 3.5% to settle at $66.09 a barrel on the New York Mercantile Exchange. Front-month contract prices saw their highest finish since April 2019.  

May Brent crude, the global benchmark, gained 3.9% to settle at $69.36 a barrel. Prices settled Friday at their highest since May 2019.  

For the week, WTI crude ended 7.5% higher, while Brent crude logged a weekly climb of 7.7% — its seventh straight weekly gain.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1960 to lows near US$1.1895 and was near US$1.1910 at the US close. The Aussie dollar fell from highs near US77.25 cents to lows near US76.25 cents and was near US76.75 cents at the US close of trade. And the Japanese yen eased from near 108 yen per US dollar to JPY108.60 yen and was near JPY108.40 at the US close.

European Markets

European sharemarkets eased on Friday. The pan-European STOXX 600 index lost 0.8% with travel (-4.0%) and financials (-2.5%) stocks both down. But the index rose 0.9% on the week. The German Dax index fell 1.0% and the UK FTSE index lost 0.3%. UK-listed shares in Rio Tinto (-0.4%) and BHP (-1.0%) both fell.

Asian Markets

Earlier Friday, Chinese markets edged higher, reversing losses from earlier in the session. The Shanghai Composite Index ended the session flat. The Shenzhen Composite Index edged 0.2% higher, while the ChiNext Price Index gained 0.7%. Chinese leaders said that they will target GDP growth of 6% or more this year.  

Hong Kong’s Hang Seng Index pared early losses to end 0.5% lower, weighed by pharmaceutical and tech stocks.  

The Nikkei Stock Average lost 0.2%, weighed on by falls in real-estate stocks, as the government mulls an extension of the Covid-19 state of emergency for Tokyo. The broader market index Topix rose 0.6%.  

  • Global Fundamental Analysis 08/03/2021, FP Markets
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