Global Fundamental Analysis 30/04/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 108 points up.

The Federal Reserve said the U.S. economy has deteriorated due to the coronavirus pandemic and pledged to take aggressive action to support an eventual recovery.  The U.S. economy shrank at a 4.8% pace in the first quarter as the coronavirus spread, the steepest contraction since the last recession.

 

Microsoft Corp. posted higher third-quarter earnings propelled by strength in its cloud-computing business with some of its operations getting an extra boost from the
coronavirus pandemic.

 

Overnight Summary

 
 

EACH MARKET IN FOCUS

 

Australian Market

 

US Market

U.S. stocks rose on hopes of progress for a coronavirus treatment and as Federal Reserve Chairman Jerome Powell said the central bank is in no hurry to end its economic stimulus. Major indexes opened sharply higher and maintained their gains into the final hour of trading. All 11 sectors of the S&P 500 rose, led by shares of beaten-down energy stocks.

The Dow Jones Industrial Average rose 528 points, or 2.2%, as of the 4 p.m. close of trading in New York. The S&P 500 gained 2.7%, and the Nasdaq Composite jumped 3.6%. All three indexes have surged in April after a punishing selloff when the pandemic brought the economy to a near halt.

 

Commodities

Gold futures finished lower for a fourth straight session, with possible progress on an experimental treatment for COVID-19 dulling haven demand for the precious metal.
Prices then edged higher after the official settlement when the Federal Reserve pledged to help the economy fight the devastating impact of the coronavirus pandemic.

Gold for June delivery was at $1,716.80 shortly after the Federal Open Market Committee kept its benchmark interest rate in a range of 0 to 0.25% and said it will commit to using a full range of tools as the economy continues to face a public-health crisis.

 

Oil Futures

U.S. oil prices ended the session sharply higher, closing up 22% at $15.06/bbl. after weekly EIA data suggested oil and fuel demand is turning higher now that many U.S. states have begun the process of reopening their economies shut by coronavirus.
EIA reported an unexpected 3.7M-bbl. decline in gasoline inventories last week and another uptick in motor gasoline supplied to the market-a proxy for demand.
Edward Moya at Oanda in NY says price support is also coming from production cut efforts around the globe.

 

Forex

The U.S. dollar weakened 0.5% against the euro and 0.2% against the yen. The Fed pledged aggressive action as economic distress from coronavirus worsens, which sparked selling in the dollar.
Investors may also be embracing more risk on some promising Covid-19 drug news from Gilead and more reopening plans in Europe, and they seem to be looking past a dismal 1Q GDP report that showed the economy shrank 4.8%, its fastest pace since the 2007-09 recession.   The WSJ Dollar Index fell 0.6%.

 

European Markets

European sharemarkets closed higher on Wednesday. The panEuropean STOXX 600 rose by 1.8%. Austrian chipmaker AMS (+24.4%) said it expected the impact from the coronavirus in the second quarter to be limited. The German Dax index rose 2.9%. The UK FTSE index lifted by 2.6% with London-listed shares of Rio Tinto up by 4.5% and BHP shares 5.1% higher.

 

Asian Markets




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