Global Fundamental Analysis 08/02/2021

Global Fundamental Analysis 08/02/2021, FP Markets

Opening Call: The Australian share market is to open higher.


U.S. stocks, gold prices and silver prices rose after a lukewarm U.S. jobs report boosted expectations for further fiscal relief. The yield on the 10-year Treasury also rose on that sentiment, eventually reaching 1.17%. The WSJ Dollar Index dropped to 85.75. Oil prices continued to strengthen on expectations demand will return.


Australian Market

Australia’s S&P/ASX 200 closed 1.1% higher, completing its strongest week in three months, as financial and tech stocks resumed their ascents. Travel agents benefited as Victoria state relaxed some coronavirus border restrictions, while consumer-discretionary stocks performed well after positive retail sales data.


US Market

U.S. shares rose, with the S&P 500 notching its best week since November, as investors pivoted to focus on a possible new stimulus package and shook off some of the razzmatazz in individual stocks that marked the previous month of trading.

he Dow Jones Industrial Average gained 0.3%. The S&P 500 climbed 0.4%, hitting a record high for the second day in a row. The benchmark is up more than 4.6% on the week, its biggest one-week gain since the week ending Nov. 6.

The tech-heavy Nasdaq Composite rose 0.6% to a record and also closed its best week since Nov. 6. The heavily traded stocks at the centre of a social-media spectacle have lost some of their steam. GameStop rose 19%, after falling by 30% or more for three of the previous four trading days. It’s down 80% for the week, but still up more than 200% for the year.



Gold and silver futures recovered a little ground, capping a volatile week for precious metals after a weaker-than-expected monthly update on U.S. employment lent support for approval of a second Covid-19 fiscal stimulus plan in Congress.

Gold for April delivery rose 1.2% to settle at $1,813 an ounce, after dropping 2.4% on Thursday to mark the lowest settlement since late November, FactSet data show. For the week, most-active contract prices lost 2%.

On Comex, March silver added 3% to end at $27.019 an ounce, after the metal also skidded by 2.4% in the prior session. For the week, silver prices rose by about 0.4%.


Oil Futures

Oil futures settled higher, with Brent crude nearing the $60-a-barrel threshold and U.S. benchmark prices up roughly 9% for the week, boosted in part by expectations for stronger energy demand and production restraint by major oil producers.

West Texas Intermediate crude for March delivery rose 1.1% to settle at $56.85 a barrel on the New York Mercantile Exchange, leaving front-month U.S. benchmark prices up 8.9% for the week, according to Dow Jones Market Data. Prices marked their highest finish since Jan. 21, 2020.

April Brent crude, the global benchmark, advanced nearly 0.9% to $59.34 a barrel on ICE Futures Europe, up 7.8% for the week to settle at their highest since Jan. 29, 2020. Prices, based on the front-month contract, scored a sixth straight session gain.



Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1955 to highs near US$1.2050 and was near US$1.2045 at the US close. The Aussie dollar rose from lows near US75.90 cents to highs near US76.76 cents and was near the highs at the close of US trade. And the Japanese yen held between 105.32 yen per US dollar and JPY105.75 yen and was near the strongest levels at JPY105.34 at the US close of trade.


European Markets

European share markets were broadly unchanged on Friday. The pan-European STOXX 600 index was flat on the day but up 3.5% on the week. Travel & leisure rose 1.9% and banks rose 1.2%, but utilities, telecoms and healthcare fell. The German Dax index fell by less than 0.1%. And the UK FTSE index fell by 0.2% with exporters lower in response to a stronger pound. In London trade, shares in Rio Tinto fell by 0.5% but shares in BHP rose by 0.5%.


Asian Markets

Earlier Friday, Chinese stocks ended the session lower, reversing earlier gains. The benchmark Shanghai Composite Index and the ChiNext Price Index lost 0.2%, while the Shenzhen Composite Index fell 0.9%.

Hong Kong stocks ended the day higher, driven by strong gains in the Macau gaming sector. The benchmark Hang Seng Index rose 0.6%. Casino operators led gains after Wynn Macau’s earnings beat expectations, driving investors to turn more positive on the sector as a whole.

The Nikkei Stock Average gained 1.5%, supported by transportation and real estate stocks. Corporate earnings remain closely watched.

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