Global Fundamental Analysis 16/04/2020

Australian Market

US Market

Stocks fell as U.S. retail sales dropped more than expected in March, underscoring the economic toll of the coronavirus pandemic, while slumping energy demand sent oil prices to an 18-year low.
The Dow Jones Industrial Average slid 443 points, or 1.9%. The S&P 500 dropped 2.2%, while the Nasdaq Composite Index declined 1.4%.  The sharp drop in retail sales for March, when restaurants, malls and most stores were closed, highlights the effect of the global health crisis on U.S. consumer activity. Layoffs and furloughs, as well as the looming recession, are denting American households’ appetite for nonessential goods.

Meanwhile, U.S. industrial-production figures released Wednesday showed a decline in factory activity as global supply chains were disrupted and demand for goods evaporated. Production for March fell a worse-than-expected 5.4%.

Commodities

Gold futures ended at their lowest in a week, snapping a multiday climb that had lifted prices for the metal to a more than seven-year high a day earlier.
The sharp pullback in bullion prices came as the dollar was firmly higher, providing some resistance to the asset’s recent climb toward an all-time high.

Gold for June delivery on Comex fell $28.70, or 1.6%, to settle at $1,740.20 an ounce, marking the lowest finish for most-active contract since April 8, according to FactSet
data. Prices marked a fourth straight session climb on Tuesday to settle at the highest since October 2012.

Oil Futures

U.S. benchmark oil prices ended down 1.2% at $19.87/bbl., marking the lowest closing price since early 2002 after a weekly report showed U.S. crude-oil inventories rose by nearly 20 million barrels last week as the coronavirus reduces oil consumption by unprecedented levels.

Forex

The WSJ dollar index rose 0.8% as investors pushed back into haven assets like Treasurys and shed stocks and emerging currencies as economic damage from the coronavirus came into sharper focus. The euro weakened by 0.6% to 1.0916 and the dollar gained 0.3% against the Japanese currency, trading at 107.52 yen.
Corporations are showing the strain of shutdowns in 1Q earnings, while economic reports including the Empire State manufacturing survey, March retail sales and industrial production all fall sharply as businesses are shut in.

European Markets

European sharemarkets closed weaker on Wednesday – the first declines in six days – a period that had seen the market rise almost 8%. Energy led the declines, down 6.3%, as the oil price fell again. The pan-European STOXX 600 fell by 3.3%. The German Dax lost 3.9%. And the UK FTSE was down by 3.3%. There were reports that
the UK economy could be facing the deepest recession in 300 years. In London trade, shares of Rio Tinto fell by 4.0% while shares of BHP closed lower by 4.9%.

Asian Markets