Global Fundamental Analysis 07/04/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 124 points up.


JPMorgan Chase CEO James Dimon said his bank hasn’t sought looser regulations to help it handle the economic collapse caused by the virus, detailing instead its ability to keep lending in even more dire circumstances.


The stricken Bank of Jinzhou will unload $21 billion of assets to the central bank for less than a third of their reported value, as Beijing moves to shore up the country’s
overextended smaller banks.


Overnight Summary




Australian Market

ASX futures had jumped by 124 points (or 2.4 per cent) by 7:10am AEST. The Australian dollar had risen sharply to 60.8 US cents. Meanwhile, the Reserve Bank will meet today but is very unlikely to announce any changes to economic policy.


US Market

Stocks rallied as investors cheered early signs that lockdowns in the U.S. and Europe may be helping slow the coronavirus pandemic, even as Americans brace for another
difficult week.
Major indexes in the U.S. opened sharply higher, held relatively steady for most of the day and then soared in the final 10 minutes of the trading session. A late surge in tech stocks, including Visa, Microsoft and Apple, turbocharged the gains: the Dow Jones

Industrial Average ended the session up more than 1,600 points.  All 30 stocks in the index climbed, as did all 11 sectors in the S&P 500. Beaten-down
retail and travel stocks were among the biggest gainers. Kohl’s, Nordstrom, Carnival and Marriott International each climbed at least 19%, though all four stocks are still down more than 50% for the year.  %.

The Dow Jones Industrial Average jumped 1,627.46 points, or 7.7%, to 22679.99, though it is still down 21% this year. The S&P 500 rose 175.03 points, or 7%, to 2663.68. The Nasdaq Composite gained 540.15 points, or 7.3%, to 7913.24.

The day’s gain was the Dow’s 12th consecutive move up or down of at least 1%, the longest such streak since March 2009, and its 28th consecutive move up or down at least 0.5%, according to Dow Jones Market Data. A streak like that last occurred in October 1931 during the Great Depression when the index rose or fell at least 0.5% on 33 consecutive trading days.



Gold futures finished at a more than seven-year high as a grim outlook on the spread of coronavirus supported investor appetite for the haven metal, even as U.S. benchmark stock indexes climbed on hope that fatalities from the pandemic will soon reach a peak.

June gold on Comex rose $48.20, or 2.9%, to settle at $1,693.90 an ounce. Based on the most-active contract, the precious metal marked its highest settlement Dec. 17, 2012, according to Dow Jones Market Data.


Oil Futures

U.S. crude futures dropped 8% to $26.08 a barrel on the New York Mercantile Exchange, coming off their largest one-week percentage advance ever. After tumbling to an 18-year low, prices soared late last week after President Trump said that Russia and Saudi Arabia were close to reaching a deal to curb supply. Even with that rebound, they are down about 55% for the year.

Brent crude, the global gauge of oil prices, slid 3.1% to $33.05 a barrel on the Intercontinental Exchange. Measures to contain the coronavirus pandemic have pummeled fuel demand, while a spat between Saudi Arabia and Russia over their share of global energy markets has deepened the oil glut. Prices have fallen so much that many producers can’t cover their costs. And the world could soon run out of storage for its excess oil, adding to the sense of urgency for many nations and companies to begin lowering supply.



The U.S. dollar strengthened 0.1% against the euro and 0.6% against the yen.  Major U.S. stock indexes jumped Treasury yields rose on some early signs the spread of
coronavirus may be slowing in places like Italy, Spain and New York.  USD gained 0.2% against the U.K. pound, reversing earlier movement, on reports Prime
Minister Johnson is in intensive care due to Covid-19 and asked Foreign Secretary Raab to deputize for him.


European Markets

European sharemarkets posted solid gains in response to a slowdown in the number of coronavirus deaths. The travel & leisure sector rose by 8.2%, while the auto sector led the gains, up by 9.5%. The pan-European STOXX 600 index gained 3.7%. The German Dax lifted by 5.8%. And the UK FTSE rose by 3.1%. Restraining the FTSE was a 0.4% fall in shares of BP in response to a lower oil price. In London trade, shares of Rio Tinto rose by 0.4% while shares of BHP rose by 3.0%


Asian Markets

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