Global Fundamental Analysis 22/01/2021

Global Fundamental Analysis 22/01/2021, FP Markets

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

U.S. stocks lost steam late in the session to end mixed after disappointing U.S. labour data. The yield on the 10-year Treasury ticked higher to 1.10%, after the European Central Bank’s latest policy update. The WSJ Dollar Index fell to 84.98. U.S. oil prices fell after an unexpected build in U.S. inventories. Gold prices pulled back a bit from yesterday’s gains.

Australian Market

Australia’s S&P/ASX 200 gained 0.8% after data showed the country has recovered 90% of jobs lost to the Covid-19 pandemic. Tech, consumer and financial stocks led gains.

US Market

U.S. stocks gave up afternoon gains as investors’ optimism over stronger-than-expected earnings competed with signs that the labour market is still struggling to recover. The S&P 500 ended a choppy day up less than 0.1% while the Dow Jones Industrial Average fell less than 0.1%.  

The Nasdaq Composite performed better, gaining 0.6%, pushed higher by stocks including Apple and Amazon.com. Data showed that about 900,000 Americans filed first-time claims for unemployment benefits for the week ended Jan. 16, as companies continued to lay off workers amid a surge in Covid-19 cases.  

Meanwhile, the coronavirus pandemic continues to loom large. The U.S. reported 4,200 deaths for Wednesday, the second-highest daily number ever. 

Commodities

Gold futures logged a modest retreat, a day after settling at their highest in nearly two weeks in the wake of the inauguration of Joe Biden as the 46th U.S. president.

A weakening U.S. dollar and expectations that the Biden administration will support government spending to help boost the virus-hobbled economy provided the recent lift to gold prices.  

However, “a pullback was due” for the precious metal following its recent gains, said Naeem Aslam, chief market analyst at AvaTrade.

Oil Futures

Oil futures ended on a mixed note, with global prices slightly higher but U.S. prices modestly lower, as data from the American Petroleum Institute showed an unexpected rise in U.S. crude inventories, ahead of the U.S. government’s supply report due Friday.

The Energy Information Administration won’t be releasing its weekly data on oil and petroleum product supplies until Friday at 11 a.m. Eastern, attributing the delay to Monday’s Martin Luther King, Jr. holiday, as well as Wednesday’s U.S. presidential inauguration.

West Texas Intermediate crude for March delivery fell 0.3% to settle at $53.13 a barrel on the New York Mercantile Exchange, while March Brent crude, the global benchmark, tacked on less than 0.1% to $56.10 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 Thursday, Chinese stocks finished the session higher, continuing on an upward track fueled by the rally in new energy. The benchmark Shanghai Composite Index rose 1.1%, while the Shenzhen Composite Index gained 1.5%. The ChiNext Price Index added the most, ending 2.5% higher. The renewable energy sector led the upturn, as recent data on China’s newly installed wind and solar power capacity exceeded market expectations.

Hong Kong shares, however, ended lower, snapping the past five sessions’ strong rally. The benchmark Hang Seng Index edged 0.1% lower. China’s tech companies led the losses, as the sector retreated from a recent upturn.

  • Global Fundamental Analysis 22/01/2021, FP Markets
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