Global Fundamental Analysis 20/07/2020

OPENING CALL: The Australian share market is to open higher. 


The U.S. labor-market recovery is losing momentum as a surge in coronavirus cases triggers heightened employer uncertainty and consumer caution. Job openings in July are down from last month across the U.S., and Google searches for
“file for unemployment” are creeping up. Growth in worker hours is waning at small businesses after several weeks of gains.


Overnight Summary




Australian Market


US Market

The S&P 500 rose on the day and closed the week with modest gains even as a sharp U.S. stock rally shows signs of faltering.  After bounding higher from late March through early June, the broad U.S. stock index has been rangebound as investors weigh the prospects for economic recovery amid continued spread of the coronavirus.  The broad U.S. equity index rose 0.3%, adding 1.3% for the week and nearly erasing its 2020 loss. The Dow Jones Industrial Average slipped 0.2%, or 62 points. The Nasdaq Composite added 0.3%.



Gold futures registered a sixth weekly gain in a row, buoyed by a combination of rising expectations for additional fiscal stimulus in Europe and the U.S. as well as uncertainty over the global economic outlook as the COVID-19 cases continue to rise. Gold for August delivery on Comex rose $9.70, or 0.5%, to settle at $1,810 an ounce, while September silver added 19 cents, or 1%, at $19.764 an ounce. Gold logged a nearly 0.5% weekly rise and was up 18.8% for the year to date after hitting its highest level since 2011 earlier this month and moving within striking distance of its all-time high.


Oil Futures

U.S. oil prices settled 0.4% lower and finished the week virtually flat, at $40.59 a barrel as bearish OPEC plans to raise production and a stalling of oil’s demand recovery due to new coronavirus cases are being offset by bullish declines in U.S. oil
inventories. WTI’s front-month contract has now ended the week at virtually the same level for three straight weeks, just above $40.50 a barrel.



Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1375 to highs near US$1.1435 and was near US$1.1425 at the US close. The Aussie dollar rose from lows near US69.70 cents to highs near US70.05 cents and was near US69.95 cents at the US close. The Japanese yen lifted from 107.27 yen per US dollar to JPY106.93 and was near JPY107.00 at the US close.


European Markets

European sharemarkets rose on Friday. Investors were awaiting the outcome of an European Union summit with leaders expected to agree on a 750 billion euro recovery fund. However an agreement is far from assured. The pan-European STOXX 600 index rose by 0.2%. Gains in autos, commodity and technology stocks outweighed falls in banks, energy and travel & leisure stocks. The German Dax index was up by 0.4% and the UK FTSE index closed 0.6% higher. In London trade shares in Rio Tinto rose by 2.4% with shares in BHP up by 2.9%


Asian Markets

Earlier Friday, Chinese stocks ended the session higher, after the market had weakened for the past three days. The benchmark Shanghai Composite Index rose 0.1% to settle at 3214.13; the index saw its largest one-day loss since February on Thursday. The Shenzhen Composite Index gained 0.7% to 2158.94, while the ChiNext Price Index, which measures the performance of emerging industries and startups, added 0.6% to end at 2662.40. The consumer-services sector led gains.
Japanese stocks, on the other hand, fell as declines in real-estate, steel and airline stocks offset gains in electronics and tech companies that may enable a more digitally connected society amid a prolonged Covid-19 pandemic.

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