Slightly lower start with the FTSE JSE Top40 future down 0.34% as global markets

07/07/2020 We in for a slightly lower start with the FTSE JSE Top40 future down 0.34% as global markets, with the exception of China, looking to ease somewhat this morning after good rallies yesterday. The Dow future is down 0.62% and the FTSE 100 Future also lower, -0.53%
The South African Reserve Bank will release data on foreign-currency and gold reserves for June, as well as details on bond purchases during the month.

  • (BAW SJ): S. Africa Regulator Approves Tongaat Starch Unit Sale Deal
  • (BLU SJ): Blue Label Telecoms Sees FY HEPS Increasing More Than 20% y/y
  • (CPI SJ): Avior Upgrades South Africa’s Capitec, Says Selloff a Buy Signal

EARNINGS:

  • Omnia Holdings (OMN SJ)

ECONOMIC DATA:

  • June Gross Reserves fall to $52.32b, est. $53b, prior $52.8b
  • June Net Reserves rise to $45.74b, est. $45.9b, prior $45.5b
  • 9am: 2Q BER Consumer Confidence, est. -22, prior -9

Yesterday the FTSE/JSE Africa All-Share Index closed up 0.6% to 54,846, mostly driven higher by miners, with Capitec the main loser down 7.4% after warning of a 70% profit drop. The Rand was up 0.4% to 16.97 vs the USD earlier, but are currently weakening slightly to trade above the 17.00 level again, with the Yield on 10 year govt rand bonds that rose 12.2 bps to 9.546%.

EU/UK
The pan-European Stoxx 600 closed almost 1.6% higher, with banks jumping 3.9% to lead gains as all sectors and major bourses entered positive territory. In London the FTSE 100 closed up 2.09%, the German Dax put on 1.64%, with the Paris CAC 40 gaining 1.49%. The European Commission said Friday that conditional approval had been granted for Gilead’s antiviral drug remdesivir to be used in the EU, making it the first authorized treatment for the virus in the region. The Sunday Times newspaper then reported that the U.K. is closing in on a £500 million ($624 million) supply deal with Sanofi and GlaxoSmithKline for 60 million doses of a potential vaccine.
U.S.
Stocks closed higher last night, led by strong gains in the tech sector, as Wall Street built on the momentum from last week’s solid performance and shook off a continued rise in coronavirus cases. Stocks also got a boost after the Chinese government encouraged citizens to prepare for a “healthy bull market.” There were also impressive deals making headlines: Warren Buffett’s Berkshire Hathaway is buying the natural gas assets of Dominion Energy in a $10 billion deal and Uber is purchasing food delivery service Postmates in a deal worth $2.65 billion. The Dow rose 459 points, or 1.8%, to 26,287. The S&P 500 popped 1.6%, with the Nasdaq hitting an all-time high, surging 2.2% to 10,433.65. Apple, Amazon, Microsoft and Google-parent Alphabet all climbing at least 2%. Amazon shares also broke above $3,000 for the first time. Netflix shares reach an all-time high as well.
ASIA
Asian stocks are mixed this morning, with the Shanghai Composite in China climbing for a sixth day as the Chinese government encouraged citizens to prepare for a “healthy bull market”, bringing this month’s gain to around 13%. Stocks retreated in Japan and South Korea, and fluctuated in Australia and Hong Kong. The Nikkei is down 0.44%, the Hang Seng slipping 0.83% (Tencent down 0.29%) and the Shanghai is 1.04% higher. In OZ the ASX 200 is flat, with the metals & mining index up 1.90%.
COMMODITIES
Oil edged lower toward $40 a barrel before U.S. government data that’s forecast to show gasoline stockpiles increased, while rising virus infections raised concern stricter controls will be extended. U.S. gasoline supplies expanded by 1 million barrels last week, according to a Bloomberg survey, while nationwide crude stockpiles are projected to have fallen for a second week. Gold held near the highest level in more than seven years on demand for haven assets amid the resurgence in coronavirus cases in some parts of the world, while the dollar steadied after falling for five days.