Global Fundamental Analysis 15/09/2021

Global Fundamental Analysis 15/09/2021, FP Markets

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

U.S. stocks ended lower after the release of inflation data. The 10-year Treasury note yield fell to 1.29%, compared with 1.32% on Monday. The WSJ Dollar Index rose 0.05% to 87.29. U.S. oil prices settled little changed as output concerns tied to Tropical Storm Nicholas fade. Gold futures ended back above $1,800.

Australian Market

Australia’s S&P/ASX 200 index closed 0.2% higher on surging energy stocks and strength among heavyweight financials. The benchmark posted a third straight gain, matching its best streak in a month. The energy sector jumped 4.4% for its largest gain since Feb. 23 amid higher oil prices. Industrial, tech, health and consumer stocks were weak.

US Market

Stocks fell, continuing their recent pullback even after fresh data showed that inflation climbed at a slower pace than economists expected in August. The S&P 500 declined 0.6%, while the Dow Jones Industrial Average shed 0.8%. The technology-heavy Nasdaq Composite fell around 0.5%. The market has broadly pulled back this month amid concerns that rising cases of the Delta variant of Covid-19 could weigh on economic activity and that stocks have rallied for too long without a correction.

Through Monday, the S&P 500 fell in five of the past six trading sessions. The Labor Department’s consumer-price index rose a seasonally adjusted 0.3% in August from July-lower than the 0.4% that economists surveyed by The Wall Street Journal expected. Investors have been closely following inflation data for signs of whether the Federal Reserve might begin to scale back its easy-money policies. Tuesday’s inflation reading appeared unlikely to change the Fed’s plans.

Commodities

Gold futures ended higher, finding support as the U.S. dollar weakened after a report showing U.S. inflation rose in August at the slowest pace in seven months. Gold for December delivery rose 0.7% to settle at $1,807.10 an ounce, reversing course from an earlier drop to as low as $1,780.60.

Oil Futures

Oil futures settled little changed, holding ground at their highest prices in about six weeks, as concerns eased over the impact of Tropical Storm Nicholas on crude and natural-gas production in the Gulf of Mexico after the storm made landfall as a hurricane on the Texas coast.  

West Texas Intermediate crude for October delivery on the New York Mercantile Exchange rose by a penny to settle at $70.46 a barrel on the New York Mercantile Exchange. That was enough to mark its highest finish since Aug. 3, but prices had climbed to as high as $71.22 during the session, FactSet data show. November Brent crude, the global benchmark, climbed by 0.1% at $73.60 a barrel on ICE Futures Europe, the highest front-month finish since July 30.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1845 to lows near US$1.1800 and was near the lows at the US close. The Aussie dollar fell from highs near US73.70 cents to lows near US73.15 cents and was near US73.20 cents at the US close. But the Japanese yen rose from 110.14 yen per US dollar to JPY109.52 and was near JPY109.65 at the US close.

European Markets

European sharemarkets were mixed on Tuesday with miners, banks and luxury stocks leading to the declines in concerns about rising Covid cases in China. Banks fell 1.1% and basic resources fell by 1.9%. But Reuters noted that “shares in Pandora, the world’s largest jewellery maker, rose 6.8% after it boosted its earnings target for the coming years and lifted its share buyback plan.” The pan-European Stoxx 600 index was flat. The German Dax rose by 0.1% while the UK FTSE index fell by 0.5%. In London trade, shares in Rio Tinto fell by 2% and shares in BHP fell by 2.6%.

Asian Markets

Japan’s Nikkei Stock Average closed 0.7% higher, its highest level since August 1990, driven by hopes for fiscal stimulus and other economic policies by the new chief of Japan’s ruling party. Investors continue to focus on comments from ruling-party chief candidates ahead of the election later this month. Steel, chip and shipping stocks have led to the recent surge in stocks. Tuesday’s gains were led by insurance and tech stocks.

Chinese stocks ended the session mixed amid the country’s latest Covid-19 outbreak in Fujian province that has prompted a localized lockdown. Steelmakers, which rallied in recent weeks, suffered heavy losses. Property developers also fell after market leader China Evergrande said it expected a significant decline in September contracted sales. The Shanghai Composite Index fell 1.4%, the Shenzhen Composite Index was 0.5% lower, and the ChiNext Price Index gained 1.3%.

  • Global Fundamental Analysis 15/09/2021, FP Markets
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