Global Fundamental Analysis 21/01/2021

Global Fundamental Analysis 21/01/2021, FP Markets

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

U.S. stocks reached record highs after the inauguration of U.S. President Joe Biden. The yield on the 10-year Treasury ticked lower to 1.09%. The WSJ Dollar Index fell to 85.18 amid bets stimulus spending will increase. Oil and gold prices rose on the same belief.

Australian Market

Australia’s S&P/ASX 200 rose 0.4% as tech, energy, and industrial gains more than offset weakness among banks. The benchmark index opened higher following a positive lead from U.S. stocks.

US Market

Rising shares of Netflix and other streaming companies led the S&P 500 to a new record Wednesday, reviving Wall Street’s appetite for growth stocks. Shares of the streaming giant jumped 17%, its biggest single-day gain in more than four years. The rally came after Netflix reported better-than-expected results for the most recent quarter.  

Investors took the results to sign that streaming companies have been clear winners throughout the Covid-19 pandemic. With millions of Americans spending large chunks of time at home, many have passed the time by streaming movies and television shows.

Shares of other streaming companies also rose, including Disney and Amazon.com. That pushed the S&P 500 up 1.4% as of 4 p.m. ET to a new record closing level. The Nasdaq Composite gained 2% to its own closing record. The Dow Jones Industrial Average also rose, adding 0.8%, also reaching a new high.

Commodities

Gold futures climbed, notching their highest finish in nearly two weeks, as expectations for further fiscal stimulus measures under the Biden administration pressured the U.S. dollar, boosting prices for the dollar-denominated precious metal.  

The market expects additional fiscal stimulus measures to be “announced very soon,” providing support for gold, said Chintan Karnani, the chief market analyst at Insignia Consultants.  

February gold climbed by 1.4% to settle at $1,866.50 an ounce – the highest finish for a most-active contract since Jan. 7, FactSet data show.

Oil Futures

Oil futures rose for a second straight session, as traders pencilled in expectations for aggressive pandemic aid spending by the administration of President Joe Biden. “Markets are filled with enthusiasm for a new policy era, and oil markets are no exception,” said Bj?rnar Tonhaugen, head of oil markets at Rystad Energy, in a daily commentary. “The Biden administration is not only seen as the beginning of more political stability in the U.S. but also as the catalyst for a generous relief package that will create more economic activity and more demand for oil as a result.”  

West Texas Intermediate crude for February delivery rose 0.5% to settle at $53.24 a barrel on the New York Mercantile Exchange. March WTI, which became the front-month contract at the day’s settlement, climbed by 0.6% to finish at $53.31 a barrel. March Brent crude, the global benchmark, rose 0.3% at $56.08 a barrel on ICE Futures Europe.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.2084 to highs near US$1.2143 and was near US$1.2125 at the US close. The Aussie dollar fell from highs near US77.23 cents to lows near US76.88 cents and was near US76.95 cents at the US close. And the Japanese yen rose from near 104.07 yen per US dollar to near JPY103.83 and was around JPY103.90 at the US close.

European Markets

European sharemarkets rose on Wednesday with the pan-European STOXX 600 index up 0.7%. Dutch chip equipment maker ASML (+3.0%) and Swiss luxury group Richemont (+2.8%) provided
encouraging earnings updates. Shares of education group Pearson (+8.6%) and fashion brand Burberry (+3.9%) rose as investors reacted positively to trading reports. The German Dax index gained 0.8% and the UK FTSE index rose 0.4%. London-listed shares of Rio Tinto (+2.0%) and BHP (+2.8%) both lifted.

Asian Markets

Earlier Wednesday, Asia’s stocks indexes were mixed. The Shanghai Composite Index rose 0.5%. Hong Kong shares ended higher for a fifth straight session, extending their New Year rally. The benchmark Hang Seng Index rose 1.1% to reach its highest closing level since May 2019. China’s tech sector led the upturn.  

Chinese internet giant Alibaba jumped 8.5% in Hong Kong after its embattled owner, Jack Ma, made his first public appearance in three months, ending concerns about his whereabouts.  

Japanese stocks lost 0.4%, dragged by falls in e-commerce and transportation stocks as investors awaited fresh trading cues before pushing the benchmark index above the next threshold of 29000. Concerns persisted over elevated Covid-19 deaths this winter. Any changes to earnings guidance will be closely watched.

  • Global Fundamental Analysis 21/01/2021, FP Markets
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