Global Fundamental Analysis 15/05/2020

Australian Market

US Market

U.S. stocks swung sharply as investors weighed weak economic data and rising tensions with China against broad pushes to reopen local economies.
The session was particularly rocky. The Dow Jones Industrial Average tumbled after the opening bell, sliding more than 450 points, before staging a furious rally to trade up about 377 points, or 1.6%. The S&P 500 also waffled between gains and losses. By the close of trading in New York, it was up 1.2%.

The moves coincided with a jump in financial stocks, which have slumped this year as interest rates have fallen. American Express added 7.4%, and JPMorgan Chase rose 4.2%.  If the Dow’s gains hold through the end of the day, the blue-chip index will notch its biggest comeback since mid-March.

Commodities

Gold futures climbed to their highest finish in three weeks as investors digested an economic report on the U.S. labor market, which highlights a growing sense of
the challenge the economy may face in recovering from the COVID-19 pandemic.  Gold for June delivery on Comex rose $24.50, or 1.4%, to settle at $1,740.90 an ounce,
after rising 0.6% on Wednesday. That was the highest settlement for a most-active contract since April 23, according to FactSet data. Meanwhile, July silver climbed 48.5
cents, or 3.1%, to $16.156 an ounce, following a 0.2% slide in the previous session.

Oil Futures

U.S. oil prices finished at their highest level since April 3, closing up 9% at $27.56/bbl due to production rates that continue to fall and demand that’s gradually recovering as coronavirus stay-at-home orders are lifted in some places.

Forex

The U.S. dollar strengthened 0.2% against the euro and 0.3% against the yen.  President Trump said earlier he would prefer a stronger dollar to accompany the
economic recovery. He also said he’s considering requiring Chinese companies to follow U.S. accounting rules to be listed on NYSE and criticized China’s handling of the pandemic, raising trade fears.
The WSJ Dollar Index recently rose 0.01% to 94.14.

European Markets

European sharemarkets fell on Thursday on investor economic recovery doubts. Eurozone banks closed lower by 0.7% after hitting a record low in the session. The pan-European STOXX 600 lost 2.2%. The German Dax index fell 2% and the UK FTSE index was down by 2.8%. In London trade, shares of Rio Tinto were up by
0.7% and BHP shares rose by 0.8%.

Asian Markets

Earlier in the day in Asia, major indexes ended the day sharply lower.  The Nikkei Stock Average extended early declines to end 1.7% lower at 19914.78, after
Bank of Japan Gov. Haruhiko Kuroda said the central bank will continue to pursue its 2% inflation target. Hong Kong shares ended lower for a third straight day as investor sentiment was further dampened by the Fed’s latest warning of economic risks, coupled with renewed worries over U.S.-China tensions. The benchmark Hang Seng Index fell 1.5% to settle at 23829.74. Financial institutions were among the top losers.

South Korea’s benchmark Kospi index fell 0.8% to close at 1924.96, tracking the broad downturn in global equities markets. Tourism and auto stocks were among the largest decliners. Malaysia’s benchmark Kuala Lumpur Composite Index closed flat at 1397.25, as the rally in glove stocks continued to offset the broader market selldown ahead of an expected economic contraction in the second quarter and amid a tepid corporate earnings reporting season for the first quarter.