Global Fundamental Analysis 27/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 184 points up.


More than 3 million workers applied for unemployment benefits last week as the new coronavirus hit the economy. A strong labor market had kept the U.S. economy humming for a decade-and then, in a matter of days, it stopped.

Powell Says Economy May Be in Recession, Virus Will Dictate Timetable  – The chairman of the Federal Reserve said the Fed’s job now is to make sure businesses
of all sizes can have a bridge of support so that the economy can recover faster.

Overnight Summary



Australian Market

Australian shares closed 2.3% higher after agreement on a US$2 trillion stimuluspackage in the U.S. lifted hopes the global economic impact of the coronavirus could yet
be limited.  Every sector rose except financials as the benchmark S&P/ASX 200 gained for a third straight session to finish at 5113.3, 12% above its bear-market low.

Afterpay rose 30% as the buy-now-pay-later provider more than doubled in value in three days. Beaten-down casino operator Star Entertainment rose 21% despite pandemic-driven venue closures after a round of valuation-based analyst upgrades.


US Market

U.S. stocks soared higher intraday, even after data showed the ranks of unemployed Americans surged in the past week, signaling that investors remain hopeful that a $2
trillion stimulus package can help save the country’s weakening economy.  The Dow Jones Industrial Average climbed 4% by mid-afternoon, putting the blue-chip
index near the level where it would possibly finish the day in a bull market-a move that would mark the shortest bear market for the index in history. The S&P 500 gained 4%, and tech-heavy Nasdaq Composite added 3.6%.

The surge in all three indexes after the opening bell marked the third time this week that U.S. stocks opened higher, following a month of steep losses and wild turbulence as the fallout from coronavirus worsened. And even as the jobless claims revealed that the economic toll of the outbreak is as severe as anticipated, some investors were already looking ahead.



Gold prices ended higher, finding support as the U.S. dollar weakened, after a jump in U.S. jobless claims to a weekly record, with the data providing a grim insight into the
impact of the coronavirus outbreak in the world’s largest economy.

Gold for April delivery on Comex rose $17.80, or 1.1%, to reach $1,651.20 an ounce after the precious commodity shed 1.7% on Wednesday.  In other commodity markets, May wheat prices fell 11 cents to $5.69.


Oil Futures

Oil futures settled lower as growing worries around the decline in energy demand prompted prices to mark their first decline in four sessions.
At an online event hosted by the Atlantic Council, Fatih Birol, the International Energy Agency’s executive director, said global oil demand may fall by as much as 20
million barrels a day, with 3 billion people in the world on lockdown, according to a report from Bloomberg News.

May West Texas Intermediate oil fell $1.89, or 7.7%, to settle at $22.60 a barrel on the New York Mercantile Exchange.



The WSJ Dollar Index was recently down 1.56% to 94.01. The dollar climbed to a three-year high last week as investors scrambled for safe assets.


European Markets

European stocks rose on optimism over global efforts to offset the economic impact of the coronavirus pandemic.  The Stoxx Europe 600 gained 2.5%, the FTSE 100 increased 2.2%, the DAX added 1.3% and the CAC-40 was up 2.5%.

The U.S. Senate on Wednesday passed a $2.2 trillion rescue package to provide relief to citizens and businesses affected by coronavirus. Meanwhile, G20 leaders said they were willing to do whatever it takes to tackle coronavirus.


Asian Markets

Japanese stocks dropped, with electronics stocks falling especially sharply, one day after the benchmark index posted the biggest percentage gain in 11 years.
The Nikkei Stock Average fell 4.5% at 18664.60.  Mainland China shares sustained a second day of solid recovery from a global selloff
earlier amid the escalating coronavirus pandemic. The benchmark Shanghai Composite Index rose 2.2% to 2781.59 while the Shenzhen Composite Index gained 2.9% to 1714.86. The ChiNext Price Index, which measures the performance of startups and emerging industries, increased 3.3% to settle at 1937.85. Automobile stocks led the upturn, following a slew of policies by local governments aimed at supporting the industry.

Hong Kong stocks continued their initial weakness to close a tad lower, ending a two-day rebound that followed earlier falls caused by worries over the coronavirus
pandemic. The Hang Seng Index closed down 0.7% at 23352.34. Mainland large caps across some sectors broadly retreated from gains made the past two sessions.

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - cache | Page ID - 22084

Get instant Updates in Telegram