Global Fundamental Analysis 26/07/2021

Global Fundamental Analysis 26/07/2021, FP Markets

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

U.S. stocks rose to records. The 10-year Treasury note yield rose 2.2 basis points to trade at 1.286% versus a level of 1.264% Thursday afternoon. The WSJ Dollar Index rose 0.10% to 87.55. U.S. oil prices moved higher to end the volatile week with a modest gain. Gold prices ended lower to log their first weekly loss in five weeks.

Australian Market

Australia’s S&P/ASX 200 index rose 0.1%, closing at a record for the second-straight day, despite a slide in major bank stocks. The financial sector — the ASX 200’s largest by market capitalization — retreated 0.5%. The materials sector lost 0.1%, but strength from tech, health and consumer stocks carried the benchmark to a third-straight gain. The ASX 200 rose 0.6% for the week.

US Market

U.S. stocks rallied, pushing the Dow Jones Industrial Average across the 35000 closing milestone for the first time, in a striking rebound from major indexes’ pullback earlier this week.  

All three major U.S. stock indexes finished at new all-time highs after each posted solid weekly gains of at least 1%. At the start of the week, a rally to records seemed improbable after all three indexes dramatically tumbled.  

On Friday, the Dow industrials added 0.7%, marking a 1.1% weekly gain. The S&P 500 finished up 1%, to close at a record after a 2% gain for the week. The Nasdaq Composite also gained 1%, to finish at its own closing record. It rallied 2.8% for the week.

Commodities

Gold futures ended lower to post their first weekly loss in five weeks, as Treasury yields bounced and the U.S. dollar edged higher. August gold fell 0.2% to settle at $1,801.80 an ounce on Comex. For the week, the most active gold contract marked a 0.7% loss.

Oil Futures

Oil futures moved higher, with gains for a fourth-straight session allowing prices to rebound from the lowest settlements since May after a sharp drop on Monday. West Texas Intermediate crude for September delivery rose 0.2% to settle at $72.07 a barrel on the New York Mercantile Exchange. That led the U.S. benchmark up by 0.7% for the week, based on the front-month contract, according to Dow Jones Market Data. September Brent crude, the global benchmark, added 0.4% at $74.10 a barrel on ICE Futures Europe, leaving it with a 0.7% climb for the week.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs from near US$1.1785 to lows near US$1.1755 and was near US$1.1770 at the US close. The Aussie dollar fell from highs near US73.85 cents to US73.55 cents and was near US73.65 cents at the US close. And the Japanese yen eased from 110.25 yen per US dollar to JPY110.58 and was near JPY110.55 at the US close.

European Markets

European share markets were firmer on Friday with Refinitiv noting “optimism about the earnings season and the European Central Bank’s pledge of continued monetary support outweighed risks of a resurgence in COVID-19 cases.” The pan-European STOXX 600 index rose by 1.1% to record highs. Automakers led the way with the sector up 2.5%. Also, data showed that Euro zone business activity expanded at its fastest monthly pace in over two decades in July. The German Dax index rose by 1.0%. And the UK FTSE rose by 0.9%. In London trade, shares in Rio Tinto rose by 1.4% and BHP gained 1.3%.

Asian Markets

Japan’s Nikkei Stock Average was closed for the Sports Day holiday. Chinese stocks ended the session sharply lower, capping a week of mixed trading. The benchmark Shanghai Composite Index shed 0.7% and the Shenzhen Composite Index dropped 1.4%. The ChiNext Price Index fell 2.1%, its biggest percentage drop in a week. Drugmakers led the downturn as the sector extended Thursday’s losses.

  • Global Fundamental Analysis 26/07/2021, FP Markets
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