Global Fundamental Analysis 16/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 61 points up.


U.S. policy makers are contemplating a significant fiscal stimulus to protect businesses and consumers from the economic disruptions caused by the coronavirus epidemic.


Bayer Moves Closer to Roundup Settlement  – The company has agreed on draft settlement terms with law firms representing tens of thousands of plaintiffs alleging that its Roundup weedkiller causes cancer.


Overnight Summary




Australian Market


US Market

Stocks in the U.S. swung higher, continuing a haywire period on Wall Street and avoiding one of the worst weeks in the stock market’s history.
The Dow Jones Industrial Average soared into the 4 p.m. trading close with a gain of about 1,980 points, or about 9.4%, to 23182, concluding a topsy-turvy session. The S&P 500 rose 9.2%, and the Nasdaq Composite jumped 9.3%.

Those moves recovered some ground on the heels of Wall Street’s worst day in more than three decades, when the Dow plunged 10% as the rapidly spreading coronavirus drove fears of a global slowdown despite action from the Federal Reserve and attempts by lawmakers and the White House to reassure investors and the public.

Fears about how far and wide the global pandemic would spread have triggered a rush out of riskier assets like stocks and commodities. Even with Friday’s gains, the Dow is on pace to decline about 15% this week, which would register as the worst week since 2008 and one of the worst in its history. Some said they were expecting the punishing stretch of selling to continue.



Gold futures ended sharply lower for a fourth straight session, with a loss of more than 9% for the week–the largest since September 2011.  Volatility-shocked investors looked for news on fiscal stimulus packages from governments around the world to help ease the economic pain of the COVID-19 epidemic that has ground some of the world’s business activity to a halt and rocked financial markets.


Oil Futures

U.S. benchmark crude oil prices surged 5% to $33.06/bbl. as President Trump said he’s ordered the Energy Department to buy large quantities of crude oil for the Strategic Petroleum Reserve to take advantage of a fall in oil prices and reinforce America’s strength in the energy sector.



 The U.S. dollar surged 3.3% against the yen and strengthened 0.7% against the euro.  U.S. stocks enjoyed their best day since 2008 and 10-year Treasury yields approached 1% after President Trump declared a national emergency to fight the coronavirus, unlocking billions of dollars in federal aid.  USD traded just above Y108. The WSJ Dollar Index gained 1%.


European Markets

European stocks closed higher despite paring gains during the session as investors nervously pondered developments in the coronavirus pandemic.   The Stoxx Europe 600 gained 1.4%, the FTSE 100 advanced 2.5%, the CAC-40 was up 1.8%, the DAX climbed 0.8% and Italy’s FTSE MIB rose 7.1%.


Asian Markets

China stocks recouped most of the morning’s sharp falls seen to end slightly lower, outperforming Asian peers that have broadly tumbled on global selloffs triggered by
heightening anxiety over the coronavirus pandemic. The benchmark Shanghai Composite Index, declining 4.1% upon market open, ticked down 1.2% to 2887.43.

Hong Kong stocks recouped most of their losses to edge lower, in line with other Asian equities which broadly clawed their way back, following a rise in U.S. futures. The Hang Seng Index ended down 1.1% at 24032.91 after diving 7.4% upon opening, but the HSI still ended at its lowest closing level since April 2017.

Japan’s Nikkei Stock Average falls 6.1% at 17431.05, its lowest close since November 2016, on persistent concerns about the coronavirus pandemic. The percentage point drop was the biggest since June 2016. The Nikkei at one point was down 10% but trimmed its losses.

Indian shares ended the session higher, reversing steep intraday declines, following a rebound in Asian markets this afternoon that was driven by the momentum in U.S. stock futures. The benchmark Sensex rose 4.0% to close at 34103.48, after falling up to 10% during the day.

South Korean stocks sank to a near eight-year closing low on continuing fears over the coronavirus pandemic. The benchmark Kospi index closed 3.4% lower at 1771.44–its lowest closing level since July 2012, but trimmed earlier losses after U.S. equity futures rose. The Kospi dropped over 8.0% earlier in the session, triggering a 20-minute trading halt.

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