Global Fundamental Analysis 16/11/2020

Global Fundamental Analysis 16/11/2020, FP Markets

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

U.S. stocks rose, with the Dow industrials and S&P 500 capping off a second weekly gain. The yield on the 10-year Treasury ticked higher to 0.90%. The WSJ Dollar Index dropped to 87.46.

Oil prices fell as Covid’s growing spread sparked demand concerns. Gold prices gained, helped by the dollar’s fall.

Australian Market

Australia’s S&P/ASX 200 index slipped 0.2%, paring its strong weekly gains. Utilities and energy led a second consecutive loss to leave the benchmark 3.5% higher for the week. Financials also pulled back.

US Market

The Dow Jones Industrial Average rose, giving the index its second straight week of gains, as optimism over a Covid-19 vaccine led investors to pile into previously underperforming sectors like energy and banks.

The Dow industrials climbed 1.4%. The blue-chips index rallied 4.1% for the prior week.

The S&P 500 rose 1.4%, giving it a weekly gain of about 2.2%. The tech-heavy Nasdaq Composite rose 1%, recovering some ground from recent days but still lagged behind the others with a 0.6% loss for the prior week.

The last week when the Dow outperformed the Nasdaq by such a wide margin was 2002, according to Dow Jones Market Data.

Commodities

Gold futures headed higher, but were set for a weekly decline of at least 3% in a week which saw appetite for bullion tested by growing prospects for coronavirus remedies and vaccines.

December gold climbed 0.7% to settle at $1,886.20 an ounce. The yellow metal, however, saw a 3.4% weekly decline, based on the most-active contract.

Oil Futures

Oil futures settled with a loss, pressured by a rapid climb in Covid-19 cases and an unexpected weekly climb in U.S. crude supplies, though prices still scored sharp weekly gains inspired by progress toward a vaccine.

West Texas Intermediate crude for December delivery fell 2.4% to settle at $40.13 a barrel on the New York Mercantile Exchange.

Forex

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1800 to highs near US$1.1835 and was near the highs in late US trade. The Aussie dollar rose from near US72.25 cents to highs near US72.70 cents and was near the highs in late US trade. And the Japanese yen rose from near 105.14 yen per US dollar to JPY104.56 and was near JPY104.62 in late US trade.

European Markets

European sharemarkets were mixed on Friday. Optimism over a virus vaccine balanced worries about the impact of rising virus case numbers on economies. Banks rose while travel stocks fell. The pan-European STOXX 600 index was broadly unchanged. The German Dax index rose by 0.2% but the UK FTSE index fell by 0.4%. In London trade, shares in Rio Tinto fell by 0.7% and shares in BHP fell by 0.3%.

Asian Markets

Earlier Friday, China’s major stock benchmarks ended mixed. The Shanghai Composite Index dropped 0.9% and the Shenzhen Composite Index slipped 0.2%. The startup-heavy ChiNext Price Index gained 0.2%. Banks, property developers and other cyclical stocks broadly retreated from their gains earlier this week.

Japan’s Nikkei Stock Average lost 0.5%, amid some profit-taking and rising concerns over prolonged Covid-19 containment measures in several parts of the globe. Real estate stocks were weaker, as well as shares of insurance companies.

  • Global Fundamental Analysis 16/11/2020, FP Markets
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