Global Fundamental Analysis 03/07/2020

OPENING CALL: The Australian share market is expected to open higher. SPI futures contract expected to open up 35 points up. 


Unemployment fell and the U.S. economy regained 4.8 million jobs in June, but the recent surge in coronavirus infections could throw the recovery off course. The job growth followed May’s payroll gain of 2.7 million and showed people were
getting back to work and the economy was healing faster than anticipated. Still, the U.S. labor market is operating with about 15 million fewer jobs than in February.


The U.S. Treasury Department has agreed to terms for loans to American Airlines Group Inc. and four smaller airlines as part of an aid program to help the industry weather the coronavirus pandemic.


Overnight Summary




Australian Market

Australian shares closed 1.7% higher at 6032.7. All 12 sectors of the benchmark S&P/ASX 200 index rose, with tech stocks again leading.


US Market

U.S. stocks rose after the June employment report showed the economy added more jobs than expected, reassuring investors that the recovery is continuing. The Dow Jones Industrial Average climbed about 93 points, or 0.4%, after earlier rising
nearly 470 points. The S&P 500 was up 0.5%, its fourth day of gains.



Gold futures settled higher as investors showed concern over the economic impact of the rising numbers of new COVID-19 cases in the U.S. and around the world, despite improving economic data. August gold picked up $10.10, or 0.6%, to settle at $1,790 an ounce. For the holiday-shorted week, prices based on the most-active contract finished around 0.5% higher than last Friday’s settlement.


Oil Futures

Crude-oil prices rose for a second session to mark their highest finish since March, buoyed by better-than-expected U.S. job growth in June, after data a day earlier showed the biggest weekly domestic crude supply decline since 2019.
West Texas Intermediate crude for August rose 83 cents, or 2.1%, to settle at $40.65 a barrel on the New York Mercantile Exchange. For the holiday-shortened week, oil saw a weekly gain of 5%, based on the most-active contract close last Friday.



Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1300 to lows near US$1.1221 and was near US$1.1235 at the US close. The Aussie dollar fell from highs near US69.50 cents to lows near US69.02 cents and was near US69.20 cents at the US close. The Japanese yen held between JPY107.33 per US dollar and JPY107.70 and was near JPY 107.55 at the US close.


European Markets

European sharemarkets lifted on Thursday. The pan-European STOXX 600 index was up by 2%, boosted by shares of banks (+4.3%) and automakers (+3.4%). The German Dax index rose by 2.8% and the UK FTSE index was up 1.3%. London-listed shares in Rio Tinto (+2.2%) and BHP (+2.1%) both rose.


Asian Markets

Earlier in the day in Asia, Japanese stocks ended slightly higher as gains in auto and insurance shares offset losses in pharmaceutical companies. The Nikkei Stock Average edged 0.1% higher to 22145.96.  Mainland China stocks reversed opening losses to close higher on improving sentiment. The Shanghai Composite Index climbed 2.1% to 3090.57, the highest closing level in five-and-a-half months.

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