Global Fundamental Analysis 03/04/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 114 points up.


SoftBank Group terminated an offer to pay up to $3 billion for shares in office-space provider WeWork, depriving co-founder Adam Neumann of a potential windfall of nearly a billion dollars.


Amazon Has Hired 80,000 Workers Out of 100,000 Plan – The tech giant has quickly ramped up hiring and plans to introduce more safety gear and
precautions after warehouse workers and other hourly employees pressed the company to do more to protect them.


Overnight Summary




Australian Market

Australian shares pared losses through the day but still closed 2.0% lower. The benchmark S&P/ASX 200 slumped 3.7% in early trade and steadily ground its way
higher to finish at 5154.3, 28% down from its Feb. 20 record close.

The property, tech and financial sectors led losses, falling by between 3.4% and 4.2%. The big four lenders — CBA, Westpac, ANZ and NAB — lost between 3.8% and 5.6%, after Moody’s downgraded the Australian banking system to negative from stable. The ratings firm cited increased strain on the operating environment and loan performance amid the fallout of the coronavirus pandemic.


US Market

U.S. stocks rose intraday on signs of potential easing in the oil price war between Saudi Arabia and Russia, raising hopes for the battered energy sector.
Major indexes pushed higher after President Trump suggested on Twitter that talks between Saudi Arabia and Russia could lead to a cut in oil production. Saudi Arabia is willing to consider massive oil-supply curbs as long as other nations join the effort, The Wall Street Journal reported midday.

The signs that oil prices could recover some of their recent losses bolstered energy shares and the stock market more broadly, after weeks of punishing losses as the coronavirus pandemic slows economic activity.

The Dow Jones Industrial Average gained 0.7%, about 150 points, after declining more than 900 points on Wednesday. The S&P 500 added 1%, and the Nasdaq Composite was up 0.6%.



Gold futures gained ground as another large jump in U.S. weekly first-time jobless claims prompted prices to settle higher for the first time in five sessions.

The news boosted haven demand for gold, sending the June futures contract on Comex up by $46.30, or 2.9%, to settle at $1,637.70 an ounce, following losses for the contract over the past four sessions in a row. That marked the biggest one-day percentage gain for the most-active contract since March 24, according to FactSet data.

May silver advanced 67 cents, or 4.8%, to $14.654 an ounce.  In other commodity markets, May wheat prices fell 8 1/2 cents to $5.41 3/4.


Oil Futures

U.S. crude oil closed up 25% at $25.32 a barrel, logging its sharpest percentage gain on record, according to a Dow Jones Market Data analysis of figures going back to 1983.

Brent rose 21% to $29.94, also recording its best day ever.  The gains marked a rare bright spot for oil prices in recent weeks. Both Brent and U.S. crude are still down more than 50% so far this year, leaving many traders skeptical that production cuts alone can lift prices back near recent highs



The WSJ Dollar Index was recently up 0.44% at 94.49.


European Markets

European stocks were broadly higher as hopes of a breakthrough in the stand-off between crude producers Saudi Arabia and Russia boosted oil shares. The Stoxx Europe 600 gained 0.4%, the FTSE 100 advanced 0.5% and the CAC-40 and DAX rose 0.3% apiece.


Asian Markets

Japanese stocks ended lower, dragged by auto and financial stocks, as the coronavirus pandemic continues to disrupt businesses. The Nikkei Stock Average fell 1.4% at 17818.72. Coronavirus-related business decisions are closely watched after many companies entered a new fiscal year on Wednesday.

South Korea’s benchmark Kospi closed 2.3% higher at 1724.86, led by gains in oil refiners and construction stocks. Hopes for resolution of a damaging oil price war between Saudi Arabia and Russia boosted investor sentiment, erasing earlier losses due to fears of the economic impact of the coronavirus pandemic.

Hong Kong stocks ended the session higher, with Chinese oil majors climbing sharply following the bounce-back in crude oil prices due to news that President Trump is set to discuss potential support measures with executives of large U.S. oil firms. The benchmark Hang Seng Index rose 0.8% to 23280.06. PetroChina surged 9.7%, Sinopec jumped 8.9% and CNOOC gained 7.5%.

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