Global Fundamental Analysis 06/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 136 points down.


A unit of Goldman Sachs is in talks to buy a stake in Permira, in a deal that would value the private-equity firm at more than $5 billion.


Treasury yields fell intraday, pulled down by investors’ appetite for safe assets and wagers that the Federal Reserve will take further action to counter the economic impact
of the novel coronavirus.


Overnight Summary




Australian Market

The Australian share market closed 1.1% higher at 6395.7 after a late surge dragged it away from its session lows.
The benchmark S&P/ASX200 jumped 1.9% in early trade following strong U.S. gains and hopes that coordinated global stimulus will help support economies against the worst impacts of the coronavirus epidemic. However, it was just 0.7% ahead with 10 minutes to go until buyers stepped in.

TPG Telecom was the ASX 200’s best performer, gaining 9.6% after the competition watchdog dropped its opposition to a merger with Vodafone Hutchison. Nonetheless, healthcare was the strongest sector as strong gains by CSL and Mayne Pharma helped it rise 2.7%.


US Market

U.S. stocks tumbled intraday, continuing a painful stretch of market turbulence as investors around the world remain jittery about the economic fallout from the coronavirus outbreak.

The Dow Jones Industrial Average lost more than 1,000 points, or 3.7%, erasing much of the gains notched Wednesday as losses accelerated midday. As investors fled stocks, the rush for traditionally safer assets continued, sending Treasury yields falling and mortgage rates to a record low.

The moves continued what has been a dizzying week on Wall Street. The S&P 500 is on track to rise or fall at least 2% for the fourth consecutive session, the longest such
stretch since August 2011, according to Dow Jones Market Data, when the European debt crisis rocked markets.



Gold futures climbed to mark their highest settlement in more than a week. Prices for the haven metal got a boost from a sharp drop in the U.S. stock market, as
well as weakness in the dollar and Treasury bond yields. April gold added $25, or 1.5%, to settle at $1,668 an ounce. That was the highest most-active contract settlement since Feb. 24, according to FactSet data.  In other commodity markets, March wheat prices rose 2 3/4 cents to $5.24 1/4.


Oil Futures

Oil futures finished with a loss of nearly 2% after the Organization of the Petroleum Exporting Countries recommended that its members and allies extend current production cuts to the end of the year, and reduce output by an additional 1.5 million barrels a day for the second quarter.

OPEC and its allies are expected to announce a final decision at their meeting on Friday. April West Texas Intermediate oil fell 88 cents, or 1.9%, to settle at $45.90 a barrel on the New York Mercantile Exchange.



The WSJ Dollar Index recently was down 0.30% at 90.68.


European Markets

European stocks were back in the red as markets continued their roller-coaster ride on the back of uncertainty about the coronavirus epidemic.
The Stoxx Europe 600 dropped 0.4%, the FTSE 100 declined 1.6%, the CAC-40 was down 1.9% and the DAX retreated 1.5%. lower.


Asian Markets

Shares in Asia rose, building on a U.S. surge, as investors welcomed growing signs of coordinated action to counter the economic impacts of the fast-spreading coronavirus. Benchmarks in Japan, South Korea, Hong Kong and China all rose, with the Shanghai Composite closing 2% higher, taking it back into positive territory for the year. Japanese stocks ended higher, with the Nikkei Stock Average rising 1.1% to close at 21329.12.

South Korean stocks advanced for a fourth straight session, buoyed by global stimulus efforts to combat the coronavirus epidemic. The benchmark Kospi closed 1.3% higher at 2085.26. Petroleum and transport stocks led the gains.

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