Global Fundamental Analysis 22/04/2020

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open 109 points down.


Netflix beat its forecast for subscriber growth in the first quarter as consumers in many countries stayed at home due to the coronavirus pandemic


Texas Regulators Decline to Force Oil Cuts, but Companies Are Cutting Anyway – Market forces are already making some Texas producers reduce output as fuel demand
shrivels and storage facilities fill up. The Railroad Commission of Texas plans to revisit possible production curbs on May 5.


Overnight Summary




Australian Market

Australian shares are headed for another sharp fall and oil prices have collapsed for a second straight day to their lowest value in 20 years.

The Australian dollar slipped (-0.8pc) to 62.8 US cents.


US Market

The Dow Jones Industrial Average dropped more than 600 points, battered by plunging oil prices, in the latest bout of market turbulence sparked by the coronavirus pandemic.  Major indexes opened sharply lower and continued tumbling in afternoon trading as the selloff in oil accelerated. The stock market’s losses were broad: 29 of the 30 stocks in the blue-chip index declined, as did all 11 sectors in the S&P 500. Both indexes suffered their first back-to-back sessions of losses since April 1.

The Dow industrials fell 631 points, or 2.7%, while the S&P 500 dropped 3.1% and technology-laden Nasdaq Composite dropped 3.5%.  The declines mark a setback after stocks finished their biggest two-week rally in decades on Friday. The Dow and S&P 500 remain down more than 15% for the year, while the
Nasdaq is off 8%.
The rout in the oil market continued, a day after U.S. crude-oil futures dropped below zero for the first time ever, as a sharp drop in global economic activity erases demand for energy.



Gold futures ended below $1,700 an ounce, at their lowest in nearly two weeks, as the U.S. dollar strengthened, pressuring the commodity priced in the currency
after modest gains in the previous session.  Commodity traders speculated that the yellow metal could also be facing some resistance after prices punched above $1,700 as a plunge in crude-oil prices sparked some investors to flee to the perceived safety of bullion.


Oil Futures

Brent crude futures, the international benchmark for oil markets, dropped 24% to $19.33 a barrel, their lowest level in more than 18 years.
The U.S. contract for delivery next month, which settled at a historic minus $37.63 a barrel Monday, rose to expire at $10.01 in thin trading.



The U.S. dollar strengthened 1.1% against the pound and was up slightly against the euro and yen.
Deutsche Bank warned thats the UK’s coronavirus lockdown could lead to volatile inflation in the coming months even though it isn’t likely to be reflected in March data,
while BK Asset Management sees downside risk for March’s figures.  The WSJ Dollar Index gained 0.3%.


European Markets

European sharemarkets closed lower on Tuesday. The panEuropean STOXX 600 fell by 3.4%. The basic materials sector fell by 5.9% and the energy sector closed lower by 4.3% with BP, Royal Dutch Shell and Total shares down by 2.5%-3.8% following an historic plunge in crude oil prices on Monday.

The German Dax index fell by 4.0% and UK FTSE index closed lower by 3.0%. In London trade, shares of Rio Tinto fell by 5.2% and BHP shares closed lower by 6.4% after warning of a sharp drop in global steel production due to the coronavirus pandemic.


Asian Markets

Earlier in the day in Asia, by the close of trading, Hong Kong’s Hang Seng Index fell 2.2%, South Korea’s Kospi Composite dropped 1% and Japan’s Nikkei 225 fell almost 2%.

Japanese stocks ended lower, as falls in electronics companies outweighed some gains in food stocks. The Nikkei Stock Average ended at 19280.78. South Korea’s benchmark Kospi index fell 1.0% to close at 1879.38, led by declines in shipbuilding, auto and tech stocks.

Hong Kong stocks fell alongside most other Asian equities as the plunge in U.S. crude-oil prices spooked investors. The Hang Seng Index extended early losses to close
2.2% lower at 23793.55. Most constituents on the index ended in negative territory.

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Source - database | Page ID - 21998

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