Global Fundamental Analysis 19/04/2021

Global Fundamental Analysis 19/04/2021, FP Markets

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

U.S. stocks ticked higher, with the Dow Industrials and S&P 500 hitting fresh records. The yield on the 10-year Treasury ticked up to 1.58% but fell sharply for the week amid U.S.-Russia tensions. The WSJ Dollar Index slipped to 86.4. Oil prices slipped for the session but jumped 6% for the week as economies continued to recover. Gold prices also posted strong weekly gains amid slipping Treasury yields and international tensions.

Australian Market

Australia’s S&P/ASX 200 closed edged higher for its highest weekly close since February Losses among energy and financial stocks offset gains elsewhere. The ASX 200 gained 1.0% for the week, its fourth straight weekly gain.

US Market

U.S. stocks inched ahead to fresh records amid another volley of blue-chip earnings and more signs of economic growth.  

The Dow Jones Industrial Average rose 0.5%, its third straight day of gains a day after it hit 34000 for the first time Thursday. The S&P 500 rose 0.4% after posting its 22nd all-time closing high of 2021. The Nasdaq Composite rose 0.1% but remained shy of its closing record set in February.  

All three indexes ended the week with gains of more than 1%. A strong start to earnings season from banks and other financial companies has combined with data showing the economy is growing at a rapid clip to propel stocks higher this week. Adding to the momentum: A drop in yields on U.S. government bonds has surprised some investors in its size and speed.

Commodities

Gold futures ended the session higher for a second straight day, with bullion posting the sharpest weekly percentage gain of the year.  

The precious metal benefitted from benchmark bond yields receding for the week, a decline in the U.S. dollar, and a pullback in bitcoin, one of the assets seen competing against safe-haven gold.  

June gold futures rose 0.8% to settle at $1,780.20 an ounce on Comex.  

For the week, gold saw a weekly rise of about 2%, for its biggest weekly advance since the period ended Dec. 18, 2020, according to Dow Jones Market Data.  

Palladium futures climbed to a record settlement, and some analysts said prices show no signs of a slowdown even with the rally for the metal moving into its sixth year in a row.  

The most active June palladium contract rose 1.3% to settle at a record high of $2,774.70 an ounce, according to Dow Jones Market Data.

Oil Futures

Oil futures pulled back, settling lower after posting four consecutive session gains, but prices scored a more than 6% weekly climb.  

Support from a strong economic report from China helped to offset pressure from concerns that rising cases of Covid-19 in parts of the world threaten a fitful recovery from the demand-sapping pandemic.  

The energy markets have so far been buttressed by monthly reports that point to a healthy recovery from the pandemic, as well as tensions between the U.S. and Iran and Russia, which could have some impact on crude markets.  

West Texas Intermediate crude for May delivery fell or 0.5% to settle at $63.13 a barrel on the New York Mercantile Exchange.  

June Brent crude edged down nearly 0.3% to settle at $66.77 a barrel on ICE Futures Europe.  

WTI saw a weekly gain of 6.4%, while Brent marked a rise of 6.1%, based on the front-month contracts, according to Dow Jones Market Data.

Those were the best weekly returns for both contracts since the week ended March 5.

Forex

Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1957 to highs near US$1.1993 and was near US$1.1980 at the US close. The Aussie dollar rose from lows near US77.26 cents to highs near US77.57 cents and was near US77.30 cents at the US close. And the Japanese yen rose from 108.96 yen per US dollar to JPY108.70 and was near JPY108.75 at the US close.

European Markets

European sharemarkets advanced on Friday. The pan-European STOXX 600 index closed up by 0.9% to a record high to be 1.1% higher over the week. Auto stocks climbed 2.1% after strong quarterly earnings from Daimler (+2.7%). The German Dax index gained 1.3% to hit an all-time high, while UK’s FTSE 100 index was up 0.5%, closing at over one-year highs. London-listed shares in Rio Tinto rose 1.2%, but BHP shares fell 0.1%

Asian Markets

Earlier Friday, Chinese stocks ended the session mixed as range-bound trading continued and momentum remained muted. Investors digested a flood of key economic indicators out of China. The numbers showed a robust performance in March and record first-quarter GDP growth but missed expectations on some points. The benchmark Shanghai Composite Index gained 0.8%, while the Shenzhen Composite Index added 0.6%. The ChiNext Price Index shed 0.3%. The food-and-beverage sector led to gains, which were offset by weakness in electronics manufacturing companies.  

Hong Kong stocks climbed, boosted by the positive economic data out of China. The benchmark Hang Seng Index rose 0.6%. Geely Auto led the rise with a 7.1% jump as the carmaker unveiled the first model under its newly established premium electric vehicle brand Zeek. Chinese oil majors also advanced.  

The Nikkei Stock Average edged 0.1% higher, led by gains in energy and electronics stocks, as concerns about rising borrowing costs eased. The U.S.-Japan summit meeting will be closely watched.

  • Global Fundamental Analysis 19/04/2021, FP Markets
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