Global Fundamental Analysis 17/09/2020

Global Fundamental Analysis 17/09/2020, FP Markets

OPENING CALL: The Australian share market is to open lower.

U.S. stocks ended the day mostly lower, forfeiting much of their early gains. The yield on the 10-year Treasury ticked higher to 0.69%. The WSJ Dollar Index fell to 87.99. Oil prices rose on bullish inventory data. Gold prices rose again after the Fed confirmed low interest rates will be in place for some time.

 

Overnight Summary

EACH MARKET IN FOCUS

Australian Market

U.S. stocks lost early momentum despite the Federal Reserve signaling it was ready to keep interest rates near zero for three more years and unpin the economy even in the face of inflation.

The S&P 500 fell 0.5% as of the 4 p.m. close of trading in New York, while the Dow Jones Industrial Average added 38 points, or 0.1%, staying relatively stable after the central bank’s release. Both broad indexes were aiming for their fourth-straight session of gains.

US Market

U.S. stocks rose as technology shares recouped some of their recent losses. The S&P 500 added 0.5%, and the tech-heavy Nasdaq Composite climbed 1.2% as of the 4 p.m. ET close of trading.

The Dow Jones Industrial Average hovered around the flatline. Earlier in the day in Asia, the Nikkei Stock Average closed lower, weighed by falls in steel, electronic and transportation shares, as the yen strengthened amid continuing global economic uncertainty.

Commodities

Gold futures climbed for a third straight session, then moved even higher after the Federal Reserve said it intends to keep key interest rates near zero through 2023, which is likely to prove bullish for long-term metals investors.

Shortly after the Fed decision, December gold was at $1,974.10 an ounce in electronic trading. It had settled with a gain of $4.30, or 0.2%, at $1,970.50 an ounce, with most-active contract prices again ending at their highest Sept. 1, according to FactSet data.

Oil Futures

Oil prices climbed, after unexpectedly upbeat U.S. inventory numbers extended a rally that began Tuesday.

Brent crude, the global benchmark of prices, rose 4.2% to $42.36 a barrel and West Texas Intermediate futures, the U.S. benchmark, added 4.9% to $40.16 a barrel. Prices have pared some of this month’s slide with their recent rebound, though they remain well below where they started the year with the corona-virus sapping demand.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1880 to lows near US$1.1790 and was near US$1.1805 at the US close. The Aussie dollar fell from highs near US73.45 cents to lows near US72.80 cents and was near US73.05 cents at the US close. But the Japanese yen lifted from 105.40 yen per US dollar to JPY104.80 and was near JPY104.95 at the US close.

European Markets

European sharemarkets were mixed on Wednesday. The panEuropean STOXX 600 index was up 0.6% – the fourth straight daily gain. The broader retail index rose 1.3% after positive financial results from Spain’s Inditex. German logistics group Deutsche Post rose 1.9% and Britain’s Royal Mail gained 5.3% after strong earnings from US delivery firm FedEx Corp. But a stronger pound sterling weighed on export-focussed stocks in the UK. The German Dax index lifted 0.3%. But the UK FTSE index lost 0.4%. In London trade, shares in Rio Tinto lost 1.7% but shares in BHP rose by 0.7%

Asian Markets

Chinese stocks ended the session lower, snapping a three-day gaining streak. The benchmark Shanghai Composite Index fell 0.4%, while the Shenzhen Composite Index lost 0.9%. The ChiNext Price Index was the largest decliner today, shedding 1.55%. The food and beverage sector and consumer-services providers led the downturn.

Japanese stocks edged higher thanks to gains in e-commerce and online-services stocks. The Nikkei Stock Average added 0.1% to 23475.53.

  • Global Fundamental Analysis 17/09/2020, FP Markets
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