Global Fundamental Analysis 31/01/2022

Global Fundamental Analysis 31/01/2022, FP Markets

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

U.S. stocks ended the last session of a wild week higher. The yield on the 10-year Treasury slipped to 1.77%, after a volatile week highlighted by a hawkish Federal Reserve. The WSJ Dollar Index continued to rise, climbing to 90.76. U.S. oil prices climbed, marking a sixth straight week of gains. Gold prices slipped amid continued pressure from the dollar.

Australian Market

Australia’s S&P/ASX 200 gained 2.2%, with all sectors finishing in the green. Consumer discretionary stocks were the best performers, up 3.3%, with telecom services stocks also climbing 2.9%. Ramelius Resources, which lost 8.0%, was the biggest loser for the day. The ASX 200 lost 2.6% over the week, its third consecutive weekly finish in the red.

US Market

The S&P 500 climbed, buoyed by strong earnings from Apple, in a move that helped the broad market index snap a three-week losing streak. The S&P 500 settled 2.4% higher. The Dow Jones Industrial Average gained 1.65%. The technology-heavy Nasdaq Composite jumped 3.1% on the day, erasing all its losses for the week.

Major stock indexes have had a roller coaster week, as the Federal Reserve has rattled markets by moving toward raising interest rates. The Dow and S&P ended the volatile period with gains of 1.3% and 0.8%, respectively. Nasdaq was roughly flat on the week.

Some upbeat big-name corporate earnings reports cheered investors. Shares of Apple, the world’s largest publicly traded company by market capitalization, rallied 7% a day after the iPhone maker posted record revenue and profit. “Apple was the savior yesterday for the whole market,” said Louis Ricci, head trader of Emles Advisors, an investment-management firm.



Gold prices posted their lowest finish in more than six weeks, as the dollar climbed in a week that has helped solidify opinions among investors that the Federal Reserve is readying for an interest-rate hike in March. “Gold prices have moved lower this week, pressured by the Fed’s clear intent to raise rates beginning in March and to begin to reduce its balance sheet shortly after it begins to increase rates,” said Jeff Klearman, portfolio manager at GraniteShares.  

April gold futures, which is now the most-active futures contract, fell 0.5% to settle at $1,786.60 an ounce. That was the lowest settlement since Dec. 15, according to Dow Jones Market Data. February gold, previously the most-active contract, shed 0.5% to $1,784.90 an ounce. Based on the most-active contracts, gold was down 2.5% for the week — the biggest weekly decline since November 2021.


Oil Futures

Oil futures scored a sixth-consecutive weekly gain, with global benchmark prices settling at a fresh seven-year high, but U.S. prices ended below the day’s best levels. Fears about a potential Russian invasion of Ukraine and tight crude supplies continue to provide support. “Geopolitical tensions are at the forefront ahead of the weekend, with fears of Russian invasion and ongoing turbulence in the Middle East,” said Phillip Streible, chief market strategist at Blue Line Futures.

March Brent crude, the global benchmark, climbed 0.8% to settle at $90.03 a barrel on ICE Futures Europe, logging the highest finish since October 2014, according to Dow Jones Market Data. The front-month contract rose 2.4% for the week. West Texas Intermediate crude for March delivery rose 0.2% to settle at $86.82 a barrel on the New York Mercantile Exchange after trading as high as $88.84, the highest intraday level since October 2014. For the week, front-month contract prices gained about 2%.



Major currencies were mixed against the US dollar in European and US trade. The Euro held between US$1.1120 and US$1.1170 and ended US trade at US$1.1143. The Aussie dollar fell from
US70.40 cents to near an 18-month low of US69.70 cents and was near US69.85 cents at the US close. And the Japanese yen rose from 115.67 yen per US dollar to near JPY115.15 and finished US trade at JPY115.24 in late US trade.


European Markets

European sharemarkets fell on Friday, down for the fourth straight week. Traders monitored the Ukraine-Russia political situation. And autos and technology fell around 1.8% on fears of higher interest rates. The pan-European STOXX 600 index declined by 1.0% on Friday and was down 1.8% on the week. The German Dax index lost 1.3% as data showed the economy contracted 0.7% in the December quarter. And the UK FTSE index fell by 1.2%. In London trade, shares in Rio Tinto eased by 3.3%. Shares in BHP lost 2.5%.


Asian Markets

Earlier Friday, Chinese stocks closed mixed ahead of the week-long Lunar New Year holiday, with losses among coal miners, liquor makers and lenders. Large investors’ sentiment may be dampened by uncertainty in overseas markets over the holiday, Soochow Securities said. The Shanghai Composite Index ended at its lowest level since March, down 1.0%, the Shenzhen Composite Index was flat and the ChiNext Price Index edged up 0.1%. Hong Kong’s Hang Seng Index closed 1.1% lower. Auto stocks declined, with a sharp decline in Tesla’s shares possibly weighing on sentiment in the electric-vehicle sector, KGI Securities said.

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Source - database | Page ID - 22147

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