Global Fundamental Analysis 05/06/2020

OPENING CALL: The Australian share market is expected to open down. The Spi 200 contract to open  14 points lower.


The European Central Bank aggressively scaled up its bond-buying program, a bold move that eases pressure on the region’s embattled governments and puts the ECB’s stimulus effort in line with that of the Federal Reserve


ZoomInfo Technologies’ shares skyrocketed following the company’s trading debut, in what is the biggest technology initial public offering so far this year


Overnight Summary




Australian Market


US Market

U.S. stocks were mixed in a choppy trading session as investors weighed their optimism about the reopening of the economy against fresh data that showed the pandemic’s continued toll.
The Dow Jones Industrial Average swung between gains and losses throughout most of the session, before rising 12 points, or less than 0.1%, as of the 4 p.m. ET close of trading. Companies from Microsoft to UnitedHealth Group to Nike weighed on the blue-chip index, while a rally in heavyweight Boeing helped mitigate losses.

The S&P 500 dropped 0.3%, snapping a four-session winning streak. The Nasdaq Composite fell 0.7%, pulled down by declines in shares of mega-cap technology companies.  Stocks have rallied for much of the week, despite the social unrest and widespread protests that have gripped the country since George Floyd, a black man, died after being restrained by Minneapolis police. Traders had instead focused on promising signs of an economic recovery, as well as optimism that global economies could see more stimulus measures.



Gold futures rose, with prices posting their first gain in four sessions on the back of weakness in the U.S. stock market and the dollar, as investors digested policy actions by the European Central Bank. The ECB, as expected, boosted the size of its Pandemic Emergency Purchase Program on Thursday, saying the envelope for asset purchases was increased by EUR600 billion, to EUR1.35 trillion.

Gold for August delivery on Comex tacked on $22.60, or 1.3%, to settle at $1,727.40 an ounce, after trading as high as $1,729. Prices for the most-active contract tumbled 1.7% on Wednesday amid a strong rally in global equities. That decline marked a third straight loss for the most-active contract, according to FactSet data.


Oil Futures

Oil futures saw mixed trading, with U.S. prices paring earlier losses as data showing high oil-producer compliance with output cuts provided some support, even as questions are raised about the potential for an extension of the cuts beyond their expiration at the end of this month.  A failure to bring forward a meeting of the Organization of the Petroleum Exporting Countries and its major allies, including Russia, a group known as OPEC+, had led to more solid losses in earlier dealings Thursday.
West Texas Intermediate crude for July delivery shed 11 cents, or 0.3%, to trade at $37.18 a barrel on the New York Mercantile Exchange, after touching an earlier low of $36.38. Prices gained 1.3% Wednesday.



The WSJ Dollar Index was recently down 0.30% to 91.22.  Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1193 to highs near US$1.1362 and was near US$1.1330 at the US close.
The Aussie dollar rose from lows near US68.82 cents to highs near US69.87 cents and was near US69.40 cents at the US close. But the Japanese yen fell from JPY108.61 per US dollar to near JPY109.20 at the US close.


European Markets

European sharemarkets fell on Thursday as investors took profits. The pan-European STOXX 600 index closed lower by 0.7%. The European Central Bank (ECB) announced a €600bn expansion of its Pandemic Emergency Purchase Programme to €1.35trn. Germany’s coalition parties agreed a €130bn stimulus package to speed up the recovery on Wednesday, but shares in Daimler (- 2.5%) and Volkswagen (-1%) fell as the measures favoured electric cars. The German Dax index closed lower by 0.5%. The UK FTSE index fell 0.6% with London-listed shares of Rio Tinto (-1.1%) and BHP (-0.7%) both down


Asian Markets

Earlier in the day in Asia, the Nikkei Stock Average gave up some of its early morning gains to close 0.4% higher at 22695.74 following reports that the Bank of Japan doesn’t see the need now to buy municipal bonds.
Investors will also likely look out for any developments on the U.S.-China front. China stocks ended little changed. The benchmark Shanghai Composite Index slipped 0.1% to 2919.25, while the smaller Shenzhen Composite Index edged 0.3% higher and the startup-dominated ChiNext Price Index added 0.4%. Hong Kong’s Hang Seng Index posted a four-day winning streak, ending 0.2% higher at 24366.30. Casino stocks were in high demand.

South Korean shares gained for a fifth straight session, with the benchmark index Kospi ending 0.2% higher at 2151.18. Pharmaceutical, chemical and airline stocks led the gains, while shipbuilding, banking and auto shares retreated as investors booked profit after recent gains.

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