Global Fundamental Analysis 09/09/2021

Global Fundamental Analysis 09/09/2021, FP Markets

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

 

U.S. stocks posted small losses on continued coronavirus worries and questions over when central banks might tighten policy. The yield on the 10-year Treasury slipped to 1.34%. The WSJ Dollar Index edged higher to 87.39. Oil prices advanced in a static trading session ahead of weekly reports on U.S. oil inventories. Gold prices posted a second-straight loss.

 

Australian Market

Australia’s S&P/ASX 200 lost 0.2%, weighed down by mining stocks. Gold miners were the biggest drag on the materials sector, which fell 1.0%. The financial sector was the only one to make meaningful gains, rising 0.6%. The ASX 200 is about 1.5% lower so far this week.

 

US Market

U.S. stocks fell on investors’ concerns that Covid-19 cases remain elevated and uncertainty about when central banks may dial back easy-money policies. The S&P 500 was down 0.1% as of the 4 p.m. close of trading in New York. The Dow Jones Industrial Average retreated 0.2%. Meanwhile, the tech-heavy Nasdaq Composite fell 0.6% as large technology stocks fell.  

Stocks have lost steam in recent days as investors assessed the rise in coronavirus cases and a weaker-than-expected jobs report on Friday. Money managers are awaiting fresh cues from the Federal Reserve and the European Central Bank about how signs of a slowing economic recovery and high inflation levels may influence their plans to taper monetary stimulus.  

“For so long, there’s been a glass-half-full view,” said Aoifinn Devitt, chief investment officer at financial advisory firm Moneta. “There was so much toward the upside, latching on to the growth narrative. Nothing has changed really, but some negative exogenous factors such as Afghanistan, Hurricane Ida and Friday’s jobs report, which have combined to dampen the sentiment in the current week.”

 

Commodities

Gold futures remained below the key $1,800 mark, stretching their losses to a second consecutive session, pressured by further strength in the U.S. dollar. The precious metal traded a bit higher than Wednesday’s price settlement after the Federal Reserve’s Beige Book on economic conditions said that overall economic growth “downshifted slightly to a moderate pace in early July through August. “December gold futures fell 0.3% to settle at $1,793.50 an ounce. In electronic trading shortly after the Beige Book release, the contract traded at $1,794.90.

 

Oil Futures

Oil prices climbed, finding support on a sluggish return of energy output in the Gulf of Mexico in the wake of Hurricane Ida. “It’s clear that the storm was one of the most damaging on record for offshore oil and as production, as well as import/export terminals and refineries in Louisiana,” said Robbie Fraser, global research & analytics manager at Schneider Electric.  

Late Tuesday, the Bureau of Safety and Environmental Enforcement estimated that more than 79% of Gulf of Mexico oil production and nearly 78% of natural gas output remains shut-in following Hurricane Ida, a deadly and powerful storm that made landfall on the Louisiana Gulf Coast on Aug. 29.  

West Texas Intermediate crude for October delivery rose 1.3% to $69.24 a barrel on the New York Mercantile Exchange. November Brent crude, the global benchmark, was up 1% to settle at $72.39 a barrel on ICE Futures Europe.

 

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1844 to lows near US$1.1801 and was near US$1.1820 at the US close. The Aussie dollar fell from highs near US73.84 cents to lows near US73.45 cents and was near US73.65 cents at the US close. And the Japanese yen firmed from near 110.44 yen per US dollar to JPY110.14 and was near JPY110.25 at the US close.

 

European Markets

European share markets fell on Wednesday, a day before the European Central Bank meeting. The pan-European Stoxx 600 index shed 1.1% with automobile stocks down 2.2%. The German Dax index slid 1.5% and the UK FTSE index lost 0.8%. London-listed shares in Rio Tinto (-1.0%) and BHP (-1.3%) both fell.

 

Asian Markets

Earlier Wednesday, Chinese stocks finished mixed, as coal miners and electric power companies advanced while liquor makers dragged. Amid supply tightness in the electricity market, companies could raise prices, which will boost their earnings, Tianfeng Securities said. The Shanghai Composite Index ended flat, a tad below this year’s highest closing level set in February. The Shenzhen Composite Index gained 0.1% and the ChiNext Price Index lost 1.0%.  

Hong Kong shares fell amid broad-based losses, with energy majors among notable decliners. Expectations of slowing GDP growth in China likely weighed on investor sentiment. The benchmark Hang Seng Index closed 0.1% lower, while the Hang Seng Tech Index dropped 0.2% to 6871.28.  

Japanese stocks advanced, led by gains in tech stocks, as hopes continued for an economic stimulus. The Nikkei Stock Average rose 0.9% to its highest close since March Investors remained focused on any developments related to the ruling Liberal Democratic Party’s leadership election.




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