Global Fundamental Analysis 14/01/2021

Global Fundamental Analysis 14/01/2021, FP Markets

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

U.S. stocks ended mixed ahead of a vote by lawmakers on impeaching President Trump. The yield on the 10-year Treasury note slumped 5.3 basis points to 1.09%, extending its pullback after touching its highest level since March on Monday. The WSJ Dollar Index recently was up 0.25% to 85.20. Crude oil prices ended lower, ending a six-session rally. Gold prices ended higher as investors watch the Trump impeachment debate.

Australian Market

Australia’s S&P/ASX 200 index closed 0.1% higher on strength from commodity-related stocks. The benchmark was led by the energy sector’s 4.3% surge. 

US Market

U.S. stocks wobbled, swinging between small gains and losses for most of the session, as investors monitored the impeachment proceedings against President Trump in Washington.

House lawmakers voted shortly after the stock market closed to impeach the president for inciting last week’s Capitol riot, just days before he is due to leave the office. While the political rancour has weighed on market sentiment in recent days, most money managers are looking past the developments in Washington to focus on the prospects for additional fiscal stimulus.

“The market is largely focusing on the fundamentals around a Biden administration,” said Willem Sels, global chief investment officer at HSBC Private Banking.  

The S&P 500 ticked up 8.65 points or 0.2%. The Dow Jones Industrial dropped 8.22 points or less than 0.1%. The Nasdaq Composite rose 56.52 points or 0.4%.

Commodities

Gold futures settled higher after a report on U.S. inflation and as investors monitored a House vote on impeaching President Donald Trump, for a second time, days before he is set to relinquish power to President-elect Joe Biden on Jan. 20.

February gold traded $10.70, or 0.6%, higher to settle at $1,854.90 an ounce, after settling 0.4% lower on Tuesday.

Oil Futures

U.S. benchmark oil prices closed lower for the first time in seven sessions, ending down 0.6% at $52.91 a barrel after a weekly report showed U.S. fuel demand remains weak due to coronavirus.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2221 to lows near US$1.2138 and was near US$1.2155 at the US close. The Aussie dollar fell from highs near US77.77 cents to lows near US77.22 cents and was near US77.40 cents at the US close. And the Japanese yen eased from near 103.61 yen per US dollar to near JPY103.99 and was near JPY103.90 at the US close.

European Markets

European sharemarkets were little changed on Wednesday. The pan-European STOXX 600 index rose by just 0.1%. Telecoms stocks climbed 1.1% but travel and leisure shares shed 1.1%. Spanish
telecoms giant Telefonica (+9.7%) announced a US$9.4 billion mobile phone mast sale to American Towers. The German Dax index also rose 0.1%, but the UK FTSE index lost 0.1% with UK-listed shares of Rio Tinto (-2.2%) and BHP (-1.4%) both down.

Asian Markets

The Japanese Nikkei ended up 1.0%, reaching its highest close since August 1990, led by gains in semiconductor-related stocks.

China’s major stock benchmarks closed lower after a recent rally sent the Shanghai Composite Index and the blue-chip benchmark CSI 300 Index to respective multi-year highs. The Shanghai Composite Index closed 0.3% lower while the Shenzhen Composite Index lost 1.1% and the ChiNext Price Index slid 1.6%.

  • Global Fundamental Analysis 14/01/2021, FP Markets
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