Global Fundamental Analysis 16/05/2022

Global Fundamental Analysis 16/05/2022, FP Markets

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

U.S. stocks rose Friday, winning a reprieve in a week of punishing losses. The yield on the 10-year Treasury note rose to 2.92% from 2.82% on Thursday. The WSJ Dollar Index fell 0.17% to 96.75. U.S. oil prices finished at a seven-week high, lifted by a surge in gasoline futures. And gold prices ended at 14-week low.

Australian Market

Australia’s S&P/ASX 200 index closed 1.9% higher but still suffered a fourth consecutive weekly loss. The tech sector led a broad-based rally, rising almost 7%. Health, real-estate and consumer stocks also rebounded strongly. Shares of gold miners were among the few to lose ground. Even so, the materials sector rose 1.6% amid gains by iron-ore and lithium companies. The ASX 200 lost 1.8% for the week.


US Market 

U.S. stocks ended higher after a punishing week of losses across major indexes. Traders welcomed the reprieve from the brutal spring selloff that has left virtually no corner of the market unscathed. This week brought several shocks for the market. Data showed inflation is still running hot, disappointing investors. Cryptocurrencies swooned after a so-called stable coin unexpectedly crashed. The S&P 500 on Thursday flirted with bear market territory, a level 20% lower than a recent high, and the Dow Jones Industrial Average posted weekly losses for the seventh consecutive week, its longest losing streak in more than 20 years.  

The Nasdaq Composite Index jumped 3.8%, while the S&P 500 gained 2.4% and the Dow industrials rose 1.5%. All three indexes were down from highs seen earlier in the session. Technology stocks were among those that led the rebound. “Will this week be the low for the year? I doubt it,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. “I wouldn’t be surprised if we get a deeper growth scare sometime this summer.”



Gold futures fell, booking their lowest close since Feb. 4 and extending a skid into a fourth straight week. June gold fell 0.9% to settle at $1,808.20 an ounce on Comex — the lowest close for the most-active contract since Feb. 4, 2022, according to Dow Jones Market Data.


Oil Futures

Oil prices finished the session higher, getting a lift from surging gasoline futures. West Texas Intermediate crude for June delivery finished at the highest level since March 25, ending up 4.1% at $110.49 a barrel. July Brent, the global crude oil benchmark, rose 3.8% to $111.55.  

Driving the gains was a rebound in risk appetite as U.S. stock markets rallied a bit after a brutal trading week. Also, energy investors remain concerned over falling U.S. inventories of refined fuels, especially diesel.



Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0417 to lows near US$1.0354 and was near US$1.0410 at the US close. But the Aussie dollar rose from lows near US68.65 cents to session highs near US69.40 cents at the US close. And the Japanese yen eased from 128.50 yen per US dollar to JPY129.43 and was near
JPY129.20 at the US close.


European Markets

European sharemarkets climbed on Friday. The pan-European STOXX 600 index rose by 2.1% with travel and leisure stocks up by 4.8%. The STOXX 600 snapped a four-week losing streak, lifting
0.8%. On Friday, the German Dax index added 2.1% and the UK FTSE index jumped 2.6%. In London trade, shares in Rio Tinto rose by 2.2% and BHP shares added 2.4%.


Asian Markets

Earlier, in Asia, Japan’s Nikkei Stock Average rose 2.6% on possible bargain-hunting following its recent selloff. Gains were broad-based, with Sysmex jumping 15%, SoftBank Group climbing 12% and Olympus up 8.5%. Tokyo Electron added 5.5% after its fourth-quarter net profit beat an analysts’ consensus estimate.  

Chinese stocks ended higher, tracking broad gains among other Asian share markets. The Shanghai Composite Index gained 1.0%, while the Shenzhen Composite Index rose 0.5% and the ChiNext Price Index added 0.3%. Industrial & Commercial Bank of China advanced 1.1% and Agricultural Bank of China added 0.7%.

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