Global Fundamental Analysis 20/10/2020

Global Fundamental Analysis 20/10/2020, FP Markets

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

U.S. stocks closed lower on stimulus worries. The 10-year Treasury note yield ticked up to 0.761%, from 0.743% on Friday. The WSJ Dollar Index recently was down 0.19% to 88.44.

Crude oil prices ended slightly lower amid an OPEC pledge. Gold futures ended higher as investors focused on talks on coronavirus relief.

Australian Market

Australia’s S&P/ASX 200 index ended the session with a 0.9% gain to 6229.4, its highest close since early March. Tech, health care and industrials led gains, with property trusts the only one of the benchmark’s 12 sectors to lose ground.

US Market

The Dow Jones Industrial Average fell about 1.4% as investors’ hopes for a fresh stimulus package before the election dwindled.

The Dow was down 409 points, or 1.4%, as of the 4 p.m. ET close of trading. The blue-chips index had been up more than 105 points just after the opening bell. The S&P 500 slid 1.6%, while the technology-heavy Nasdaq Composite was down 1.7%.

Commodities

Gold futures ended higher to start the week, with talk of a last-ditch effort to strike a deal by U.S. lawmakers on a fresh round of fiscal relief before the 2020 presidential elections helping to drive buying appetite, experts said.

December gold for delivery on Comex rose $5.30, or 0.3%, to settle at $1,911.70 an ounce, after bullion posted a 1% weekly decline on Friday, based on the most-active contract, according to FactSet data.

Oil Futures

Oil futures settled ended a tiny 0.1% lower at $40.83 a barrel as investors interpreted assurances by Saudi officials that OPEC stands ready to balance the market as a sign the group is comfortable with current, rangebound prices near $40.

West Texas Intermediate crude for November delivery, the front-month contract, fell by 5 cents, or 0.1%, to settle at $40.83 a barrel. The November contract expires at the end of Tuesday’s session. The most-active December WTI contract lost 6 cents, or nearly 0.2%, to $41.06 a barrel on the New York Mercantile Exchange.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1703 to highs near US$1.1793 and was near US$1.1765 at the US close. The Aussie dollar fell from highs near US71.14 cents to lows near US70.58 cents and was near US70.60 cents at the US close. And the Japanese yen held between 105.29 yen per US dollar and JPY105.48 and was near JPY105.40 at the US close.

European Markets

European share-markets fell on Monday with pandemic restrictions weighing on sentiment. The pan-European STOXX 600 index fell by 0.3%. Saab shares dropped 14.3% after the Swedish defense company and carmaker posted disappointing third quarter results. The German Dax index lost 0.4%. And the UK FTSE index fell 0.6% due to a surging British pound sterling. In London trade, shares of Rio Tinto (-0.9%) and BHP (-1.4%) both fell.

Asian Markets

Japanese stocks closed broadly higher, led by tech and e-commerce-related stocks, on hopes for a gradual economic recovery from the Covid-19 pandemic. Earnings-related updates remain in focus.

China’s major stock benchmarks closed lower, as the market weakened from a brief recovery last Friday. The benchmark Shanghai Composite Index and the Shenzhen Composite Index each shed 0.7%, settling at 3312.67 and 2249.53, respectively. The ChiNext Price Index lost 1.3% to 2689.67. The ChiNext index measures the performance of startups and emerging industries, including the renewable-energy sector, which was among the top decliners.

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