Global Fundamental Analysis 22/10/2020

Australian Market

Australia’s S&P/ASX 200 index rose 0.1%, recovering from a brief mid-session slip into negative territory due largely to strength in the heavyweight materials and financial sectors.

US Market

U.S. stocks traded in a narrow range, closing down, as investors assessed prospects for a fresh stimulus bill and the health of major American businesses through their quarterly reports.

The S&P 500, which drifted between gains and losses, was down 0.2% as of the 4 p.m. close of trading in New York, while the Dow Jones Industrial Average fell 0.4%. The tech-heavy Nasdaq Composite Index lost 0.3%.

Commodities

Gold prices tallied a third straight gain, with prices for the precious metal marking their highest finish in over a month, as a rise in bond yields was overshadowed by weakness in the U.S. dollar.

Copper futures, meanwhile, logged another settlement at the highest since 2018, buoyed by signs of strength in Chinese demand.

December gold climbed 0.7% to settle at $1,929.50 an ounce. The settlement was the highest for a most-active contract since Sept. 18, according to FactSet data.

Oil Futures

WTI oil prices posted a second consecutive session of sizable declines, falling 4% after data showed gasoline demand, which had been rising, is beginning to weaken again. The Energy Information Administration said U.S. gasoline inventories climbed last week, while implied gasoline demand fell.

Gold prices tallied a third straight gain, with prices for the precious metal marking their highest finish in over a month, as a rise in bond yields was overshadowed by weakness in the U.S. dollar.

Forex

Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.1842 to highs near US$1.1879 and was near US$1.1855 at the US close. The Aussie dollar rose from lows near US70.69 cents to highs near US71.35 cents and was near US71.15 cents at the US close. And the Japanese yen rose from 105.32 yen per US dollar to JPY104.34 and was near JPY104.55 at the US close.

European Markets

European sharemarkets fell on Wednesday with the pan-European STOXX 600 index down by 1.3%. Shares of gold miner Centamin slumped 19.2% after cutting its 2020 production forecast. The German Dax index lost 1.4%. And the exporter-heavy UK FTSE index slumped 1.9% – hit by a surge in the pound – after the EU’s top negotiator Michel Barnier suggested that a Brexit trade deal is within reach. In London trade, shares of Rio Tinto and BHP both fell 0.2%.

Asian Markets

Earlier Wednesday, Chinese stocks ended the session lower, weakening from a short-lived recovery. The benchmark Shanghai Composite Index shed 0.1%, while the Shenzhen Composite Index lost 1.1%. The ChiNext Price Index was the largest decliner, settling 1.5% lower amid losses in the renewable-energy sector.

Japanese stocks rose 0.3% as gains in auto and financial stocks helped offset losses in e-commerce and game companies that were seen to have benefited from movement restrictions during the coronavirus pandemic.