Global Fundamental Analysis 09/11/2021

Global Fundamental Analysis 09/11/2021, FP Markets

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


U.S. stocks edged higher following the passage of the $1 trillion infrastructure bill in the House late Friday. The yield on the 10-year Treasury rose before edging lower after trading hours to 1.50%. The WSJ Dollar Index dropped to 88.3. U.S. oil prices rose in a tight-range trading session after Saudis Arabia lifted prices for their crude products. Gold prices rose for a third-straight session.


Australian Market

Australia’s S&P/ASX 200 edged less than 0.1% lower, paring its losses thanks to strength among commodity stocks. The energy sector added 1.95% amid higher oil prices for its best day in two weeks, while gold miners were the big gainers in the materials sector.


US Market

U.S. stocks closed at record highs, while Tesla shares fell after a Twitter poll run by Chief Executive Elon Musk urged him to sell a chunk of his stock. The S&P 500 was up 0.1% as of 4 p.m. ET trading, hitting a record for the eighth consecutive trading session, a feat it hasn’t accomplished since 1997.  

The technology-focused Nasdaq Composite also ticked up 0.1%, while the Dow Jones Industrial Average gained 0.3%. Both indexes reached fresh records. Stocks have rallied in recent weeks on strong corporate earnings and signs that the economic recovery remains on track, including data showing a rebound in job growth in October.  

The spate of upbeat earnings reports has helped offset concerns that mounting inflation could hurt corporate profits. About 81% of S&P 500 companies that have reported results this season have topped analysts’ earnings forecasts, according to Refinitiv.



Gold futures also climbed, with prices stretching their streak of gains to a third consecutive session to mark another finish at the highest since early September. If prices for gold were going to drop, “they should have done so after the [Federal Open Market Committee] decision” last Wednesday, said Fawad Razaqzada, the market analyst at ThinkMarkets. “Instead, they rallied into the close of the week, and look poised to make further gains – especially if the upcoming speeches by central bank officials continue to suggest monetary policy will not be tightened aggressively and that inflation is going to be transitory.”  

“With several central bank officials speaking this week, let’s see if we will continue to hear more dovish rhetoric,” Mr Razaqzada said. If so, “this should be good news for stocks and gold or risk assets in general.”Gold futures for December delivery rose 0.6% to settle at $1,828 an ounce, following a 1.8% weekly gain. Prices based on the most-active contract marked a second-straight finish at the highest since Sept. 3, as well as a third session gain in a row, FactSet data show.


Oil Futures

Oil futures rose as investors cheered the passage of a $1 trillion U.S. infrastructure spending package and Saudi Arabia lifted prices for crude exports. West Texas Intermediate crude for December delivery rose 0.8% to settle at $81.93 a barrel on the New York Mercantile Exchange. The U.S. benchmark fell 2.8% last week, January Brent crude, the global benchmark, gained 0.8% to settle at $83.43 a barrel on ICE Futures Europe after falling 1.2% last week.  

“When the market saw oil prices fall after last week’s OPEC+ meeting most observers knew this was an exaggerated reaction and the expectation was that prices would quickly jump back as there was no surprise to justify the drop,” said Louise Dickson, senior oil markets analyst at Rystad, in a note.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1550 to highs near US$1.1595 and was near US$1.1590 in afternoon US trade. The Aussie dollar rose from lows near US73.85 cents to highs near US74.30 cents and was near US74.25 cents in afternoon US trade. And the Japanese yen lifted from near 113.65 yen per US dollar to JPY113.05 and was near JPY113.20 in afternoon US trade.


European Markets

European share markets were little changed on Monday. Leading the gains were basic resources (up 1.4%) and energy (up 0.9%) after the US Congress passed a US$1 trillion infrastructure bill. Reuters reported “Frankfurt-listed shares of Tesla dropped 3.5% after Twitter users voted “yes” to Tesla Chief Executive Officer Elon Musk’s proposal to sell 10% of his stock in the company.” The pan-European STOXX 600 index rose by less than 0.1% to record highs. The German Dax index and the UK FTSE index both fell by 0.1%. In London trade shares in Rio Tinto rose by 1.1% while BHP shares rose by 0.7%.


Asian Markets

Earlier Monday, Chinese stocks advanced, as lithium producers and airlines led gains, while the healthcare sector weakened. The Shanghai Composite Index climbed 0.2%, the Shenzhen Composite Index rose 0.5% and the ChiNext Price Index gained 0.8%. Hong Kong shares fell on higher crude-oil prices and ongoing worries over Chinese companies’ debt payments, with the Hang Seng Index losing 0.4% and the Hang Seng Tech Index falling 1.3%.

Developments, such as rising oil prices and a media report that Scenery Journey, a unit of China Evergrande Group, hasn’t made interest payments to some offshore bondholders, appear to be adding a cautious tone, said Oanda. The Nikkei Stock Average dropped 0.4% amid mixed trading for Asian equity markets with construction-related companies among the worst performers. The market is likely to be focussed on Nissan Motor’s first-half earnings on Tuesday.

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