Global Fundamental Analysis 17/11/2020

Global Fundamental Analysis 17/11/2020, FP Markets

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

U.S. stocks rose as a second coronavirus vaccine candidate showed promising results. The yield on the 10-year Treasury ticked higher to 0.91%. The WSJ Dollar Index fell to 87.27. Oil prices followed equities higher. Gold prices eked out a gain amid further lockdowns to deal with coronavirus.

Australian Market

Australia’s S&P/ASX 200 index jumped 1.2% in early trade before a technical issue forced a halt just 25 minutes into the session. Market operator ASX abandoned the session less than an hour before the scheduled end of trade. It later said a software issue was to blame.

US Market

The Dow Jones Industrial Average and S&P 500 closed at records after a second set of upbeat test results from a potential Covid-19 vaccine lifted shares of companies that have been walloped by the pandemic.

The index of blue-chip companies ended higher by 1.6%. The climb put the Dow within striking distance of the 30000 mark.

Gains were wide-ranging. Shares of several tech stocks rallied alongside banks, retailers, oil companies and travel stocks. The S&P 500 rose 1.2%, while the Nasdaq Composite rose 0.8%.

Commodities

Gold tallied a third gain in a row, with prices for the haven metal edging higher following some fresh economic restrictions amid efforts to reduce the spread of COVID-19, as well as data showing a slowdown in New York factory activity.

December gold edged up 0.08%, marking a third straight climb.

Oil Futures

Oil futures rallied, with the U.S. benchmark finishing 3% higher after the positive news concerning Moderna’s vaccine candidate.

West Texas Intermediate crude for December delivery jumped 3%. January Brent crude added 2.4%.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1868 to lows near US$1.1813 and was near US$1.1850 at the US close. The Aussie dollar rose from lows near US72.80 cents to highs near US73.25 cents and was near US73.20 cents at the US close. And the Japanese yen fell from near 104.35 yen per US dollar to JPY105.06 and was near JPY104.60 at the US close.

European Markets

European sharemarkets hit their highest levels in more than eight months on Monday as hopes for an effective coronavirus vaccine were boosted by positive news from Moderna (detailed below). The panEuropean STOXX 600 index closed up 1.3% with oil shares (+4.1%) leading gains on the back of a jump in crude prices, while banks rose 3.3%, led by Spanish lender BBVA (+15.3%). The German Dax index rose by 0.5% and the UK FTSE index climbed 1.7% after Vodafone’s (+6.9%) strong earnings forecast. In London trade, shares in Rio Tinto (+1.1%) and BHP (+2.2%) both lifted.

Asian Markets

Earlier Monday, Chinese stocks ended higher, as the market rebounded from recent losses after Beijing released strong economic data. The benchmark Shanghai Composite Index rose 1.1%. The Shenzhen Composite Index added 0.9%, while the ChiNext Price Index edged up 0.2%.

Japanese stocks gained 2.1%, hitting its highest level since June 1991, thanks to improving earnings and a tailwind from the signing of Asia-Pacific trade agreement.

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