Global Fundamental Analysis 29/04/2022

Global Fundamental Analysis 29/04/2022, FP Markets

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

U.S. stocks jumped, led by big gains in tech and communications stocks. The yield on the 10-year Treasury settled higher and then pulled back to 2.83%. The WSJ Dollar Index continued its advance, reaching 95.88, limiting gains for gold futures. Oil prices climbed as the likelihood of Europe halting Russian energy imports grew.

Australian Market

Australia’s S&P/ASX 200 climbed 1.3%, paring its losses from the previous three sessions amid strength from commodity stocks. Nine of the top 11 strongest stocks were resource-related.

US Market 

U.S. stocks soared, with technology stocks leading the charge, as investors cheered solid earnings report by Meta Platforms that showed resilience in the face of rising inflation. The Facebook owner’s stock rose 18% after the company said it had added more users than investors expected in the first quarter. That gain helped send the Nasdaq Composite Index up around 3.1% and boosted the S&P 500 technology sector. The S&P 500 climbed about 2.5%, while the Dow Jones Industrial Average jumped about 1.8%.  

Traders said the stock market was poised for a rally following recent selloffs in tech stocks, including a big swoon earlier in April after Netflix earnings disappointed investors. With little visibility over how higher interest rates will filter through the wider economy, money managers say trading has been thin and prone to whipsaw moves in both directions. “Nothing goes down in a straight line and nothing goes up in a straight line,” said Michael Antonelli, managing director and market strategist at Baird. “You don’t need a lot to move the stock market when everyone’s this pessimistic.”



Gold futures eked out a modest gain, after ending the previous session at a two-month low, as a surging U.S. dollar kept pressure on the precious metal and other commodities. “Gold has been getting pummeled as the dollar continues to rally on Fed rate-hike expectations,” said Edward Moya, senior market analyst at OANDA. Gold futures for June delivery rose 0.1% to settle at $1,891.30 an ounce on Comex. 


Oil Futures

Oil futures turned higher after The Wall Street Journal reported that Germany was prepared to stop buying Russian crude, clearing the way for a European Union embargo. Oil has seen choppy trading, with a soaring U.S. dollar weighing on commodity prices as investors also assessed worries about the impact of Covid on China’s economy. “The globe is in a mad scramble for energy supply as Russia, as many expected, is signaling that they will use their energy dominance over Europe as a weapon.

The reverberations are being felt not only in European natural gas markets but even here at home in products like gasoline but more acutely in diesel,” said Phil Flynn, analyst at Price Futures Group. West Texas Intermediate crude for June delivery rose 2.6% to $104.62 a barrel on the New York Mercantile Exchange. June Brent crude, the global benchmark, settled 1.7% higher at $107.16 a barrel on ICE Futures Europe.  



Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0560 to lows near US$1.0470 and was near US$1.0505 at the US close. The Aussie dollar fell from highs near US71.60 cents to lows near US70.50 cents and was near US71.00 cents at the US close. And the Japanese yen fell from 129.87 yen per US dollar to JPY131.22 and was near JPY130.85 at the US close.


European Markets

European sharemarkets rose on Thursday. Investors were encouraged by earnings results. Shares in Volvo Cars rose 8% after its profit beat market expectations. But sharemarkets finished off session highs in response to US GDP data and higher-thanexpected German inflation figures. The pan-European STOXX 600 index lifted 0.6%. The German Dax rose 1.4% and the UK FTSE lifted 1.1%. In London trade, shares of Rio Tinto fell 0.8% while
shares in BHP rose 0.9%.


Asian Markets

Earlier Thursday, Chinese stocks ended mixed, with coal miners leading the gains after strong earnings. Builders strengthened further after the country’s leader called for “all-out efforts” to boost infrastructure construction. The Shanghai Composite Index gained 0.6%, but the Shenzhen Composite Index dropped 0.7% and the ChiNext Price Index was 1.8% lower.

Hong Kong’s Hang Seng Index advanced 1.7% for a third straight session, supported by tech shares. Japan’s Nikkei Stock Average gained 1.75% after the BOJ left monetary-policy settings unchanged but signaled a dovish stance. The yen weakened sharply. Gains on the Nikkei were broad-based, with auto parts manufacturer Denso jumping 9.7%.

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