Global Fundamental Analysis 6/05/2020

Australian Market

US Market

U.S. stocks finished trading higher amid optimism about the easing of restrictions on economic activity in parts of the U.S. and Europe.  The Dow Jones Industrial Average was recently up 0.6%. The S&P 500 added 0.9% and the Nasdaq Composite advanced 1.1%.

California detailed initial steps to ease restrictions that have been in place for weeks to try to stop the spread of the coronavirus pandemic. Retailers including clothing stores, bookstores, sporting goods stores and florists can reopen for curbside pickup as soon as Friday, Gov. Gavin Newsom said. Other states including Florida also began allowing businesses to reopen or laid out plans to do so.

Commodities

Gold futures fell to register the first loss in three sessions, with prices dragged down by optimism about the easing of business lockdowns in the U.S. and Europe and hopes for the speedy development of a vaccine.  June gold lost $2.70, or 0.2%, to settle at $1,710.60 an ounce, following gains in each of the last two sessions.

Oil Futures

Oil futures finished higher, with U.S. prices up for a fifth session in a row. Prices got a boost on the heels of recent production cuts by major oil producers and expectations for a climb in demand as the U.S. economy gradually eases its COVID-19 lockdown measures.  June West Texas Intermediate oil rose $4.17, or 20.5%, to settle at $24.56 a barrel on the New York Mercantile Exchange. That was the highest most-active contract settlement since April 17, according to FactSet data.

Forex

The WSJ Dollar Index was recently down 0.02% to 93.68.

European Markets

European sharemarkets closed higher on Tuesday. Germany’s top court ruled that the Bundesbank must stop buying bonds under the European Central Bank’s (ECB) stimulus scheme if the ECB cannot justify the purchase. But investors chose to focus on positive earnings results with the pan-European STOXX 600 up by 2.2%.
Repsol shares lifted 13.2% as it beat earnings expectations. The German Dax index rose 2.5%. The UK FTSE index was up 1.7% with London-listed shares of Rio Tinto higher by 1.2% and BHP shares up by 2.7%.

Asian Markets

Earlier in the day in Asia, stock markets in mainland China, Japan and South Korea were closed for holidays. Hong Kong shares ended the session higher after a steep decline on Monday. Despite data last night showing the city’s steepest contraction on record for first quarter GDP, the Hang Seng Index gained 1.1% to settle at 23868.66. Exporters and auto stocks led the gains.

Malaysia’s benchmark Kuala Lumpur Composite Index gained 0.9% to close at 1389.55 after the country’s central bank made a widely anticipated move to cut its overnight policy rate further to 2.0% to cushion the weakening economy after almost seven weeks of movement restrictions amid the Covid-19 pandemic.