Global Fundamental Analysis 31/03/2020

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open 66 points up.

 

Americans prepared for a prolonged lockdown and the country’s worst-hit city expanded its capacity to care for sick patients as a continuing surge of confirmed new coronavirus cases brought the U.S. total to nearly 150,000.

 
Johnson & Johnson said that it had made progress on a vaccine to prevent Covid-19 and that the product could be ready in early 2021.
 
Overnight Summary
 
 

EACH MARKET IN FOCUS

 

Australian Market

 

US Market

U.S. stocks rose and oil prices approached $20 a barrel intraday after government officials signaled that measures to contain the coronavirus pandemic are likely to remain in place for an extended time.

The Dow Jones Industrial Average rose 2.2%, or 485 points, to 22122, while the S&P 500 added 2.6%. Both indexes have rallied more than 15% since bottoming a week ago but remain down more than 20% from their February records as the pandemic has closed businesses, reduced air travel and pushed millions of people to work from home.

The White House on Sunday extended its social-distancing guidelines through the end of April. The move marks a shift in stance for President Trump, who had said that he hoped to ease some restrictions by Easter to limit the economic damage.

 

Commodities

Gold futures ended lower, weighed down by a climb in U.S. stocks and strength in the dollar, as traders eyed rapidly moving developments in the coronavirus pandemic and President Donald Trump’s extension of guidelines on measures meant to mitigate the spread of the virus.

Gold for June delivery on Comex, which is now the most-active contract, fell by $10.90, or 0.7%, to settle at $1,643.20 an ounce. Prices for the April contract, which is still among the more active, had climbed by 9.5% last week for the biggest weekly rise since September 2008, according to FactSet data.

 

Oil Futures

U.S. benchmark oil prices ended the session down 6.6% at a fresh 18-year-low $20.09/bbl amid shrinking demand due to the coronavirus pandemic and a continued lack of progress toward any deal among the world’s major oil producers to reduce production.
Further U.S. travel restrictions in places like Texas, and a Sunday afternoon announcement by President Trump that he was extending social distancing guidelines until the end of April sparked this latest selloff in crude.

 

Forex

The U.S. dollar rose in contrast to the U.K pound and South African rand, both of which have been hit by sovereign credit rating downgrades.
The WSJ Dollar index, which measures the U.S. currency against a basket of 16 foreign currencies was up to 93.70, rebounding slightly from its roughly 4% loss in the previous four trading days.

 

European Markets

European markets closed mostly higher as investors stayed cautiously positive while awaiting further signals about the spread of the coronavirus pandemic.
The Stoxx Europe 600 gained 1.3%, the FTSE 100 climbed 1%, the CAC-40 was up 0.6% and the DAX advanced 1.9%. Oil stocks were among the biggest pan-European risers, even as the price of a barrel of Brent crude dropped 6.8% to $26.04, as investors bought the dip.

 

Asian Markets

Hong Kong stocks ended the first session of the week lower after a broad recovery trend last week. The benchmark Hang Seng Index lost 1.3% to settle at 23175.11. Casino operators and exporters led the declines, after Macau strengthened border-control measures to contain the coronavirus pandemic, while concerns about overseas demand
continued to mount as the crisis escalated in the U.S. and Europe.

Japanese stocks ended lower, with financial and machinery stocks falling particularly sharply, due to persistent concerns about business disruption caused by the coronavirus pandemic. The Nikkei Stock Average fell 1.6% to 19084.97.

Indian shares ended sharply lower, after delivering a string of substantial gains the past week. The benchmark Sensex lost 4.6% to settle at 28440.32. Financial stocks, which were among the top-performing sectors in last week’s uptrend, led the decline.




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