Global Fundamental Analysis 02/06/2020

OPENING CALL: The Australian share market is expected to open higher. The Spi 200 contract to open 9 points higher.


Factories in the U.S. and abroad continued to reduce output and shed jobs last month, though the pace of deterioration moderated as governments moved to ease coronavirus-related restrictions on their economies.


An alliance of oil-producing nations led by Saudi Arabia and Russia is close to a deal that would extend their collective production cuts through Sept. 1, as the world emerges from pandemic-induced lockdowns.


Overnight Summary




Australian Market


US Market

Stocks rose as investors embraced signs that global factory activity was on a path toward recovery and largely shrugged off the violent clashes in U.S. cities.
The Dow Jones Industrial Average climbed 91 points, or 0.4%, as of the 4 p.m. ET close of trading. The S&P 500 was also up 0.4%, while the Nasdaq Composite gained 0.7%. Overseas, major European and Asian indexes posted gains.
Data from surveys of purchasing manufacturers indicated that factories in the U.S. and abroad continued to reduce output last month, but the pace of deterioration slowed as governments eased coronavirus-related restrictions. In China-the first country to impose sweeping lockdowns to combat the virus-factories reported an increase of activity, offering investors hope that other countries would follow.

In the U.S., the Institute for Supply Management’s manufacturing index for May rose to 43.1 from an 11-year low of 41.5 in April. A reading above 50.0 indicates an increase in activity, while a reading below that level indicates a decrease.



Gold prices settled with a modest loss as investors weighed demand for the precious metal against a backdrop of nationwide protests following the death of a black man in Minneapolis police custody, the latest developments tied to U.S.-China tensions over Hong Kong, and some data that point to an improvement in the economy.

Gold for August delivery on Comex fell by $1.40, or 0.08%, to settle at $1,750.30 an ounce. The most-active contract traded between a low of $1,737.60 and a high of $1,761, according to FactSet data.  July silver was up 33 cents, or 1.8%, at $18.827 an ounce.


Oil Futures

U.S. benchmark oil prices ended the session nearly unchanged as they closed down a marginal 5 cents, or 0.1%, at $35.44 a barrel. Analysts say investors were focused partly on bearish factors including tensions
between the U.S. and China, and early indications that U.S. crude-oil production is starting to ramp up again as some recent shut-ins are restored in North Dakota and other shale regions. But crude also found price-support from the news that OPEC and other global producers including Russia will move up to this Thursday a meeting on output cuts.
That could signal the group is going to extend those cuts until demand weakness from coronavirus has rebounded more fully.



The US dollar weakened against other major currencies, including 0.3% against the euro and 0.2% against the yen.  The WSJ Dollar Index sunk 0.6%.


European Markets


Asian Markets

Mobile-gaming group NetEase begun taking investor orders for a multibillion-dollar Hong Kong share sale, as momentum builds for U.S.-listed Chinese companies to obtain secondary listings closer to home.

China’s apparent recovery from the coronavirus shutdowns is allowing the country to project strength abroad, but a closer look at its labor market raises some questions over that progress.

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