Stocks Rise On Policy Optimism, Dollar Declines

13/07/2020
• U.S. earnings start this week with banks JPMorgan, Citigroup
• S&P 500 futures edge up; crude oil drops in Monday trading

The JSE closed weaker on Friday as markets continue to be affected by the rising Covid-19 in the US, Hong Kong and Tokyo fuelling fears of a second wave of the pandemic hitting Asia. All- share index lost 0.66% to 55,417.89 points and the Top-40 0.74%, while both banks and financials indices gained 2.96% and 1.04% as the local currency gained 2.23% against the dollar for the week.

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The rand up 0.4% to 16.7200 to the dollar, while Yield on 10-year govt rand bonds fell 16.9 bps to 9.501%
GOLD up 0.37 to $1803.11/oz, and platinum 1.92% to $843.46/oz, Brent crude fell -0.74 to $42.90 a barrel.
I.G Futures indicating a good start for the week at the opening, up 490 points.

EU/UK
European markets finished the week on positive note with banks and technology stocks pacing gains. At the close of trading: Stoxx 600 notched up 0.88%, with banks advancing 2.39% and technology shares firmer 0.74%.
The German Dax climbed 1.15%, with the CAC-40 gaining 1.01% for the day, while UK’s FTSE100 ended the session up 0.76%. Despite Moody’s warning that the UK economy is heading for a 10.1% contraction in 2020, the FTSE felt comfortable enough to engage with the session’s optimism.

U.S.
On Friday the Dow opened 195.62 points higher, clawing back some of Thursday’s losses that came after the announcement of a fresh record for new coronavirus cases in the US. BioNTech – German biotechnology company – said the company would file for regulatory approval of its Covid-19 vaccine before the end of 2020 and believed the filing could take place in December, slightly later than the expected October filing that executives at Pfizer have indicated in recent weeks. The producer price index for final demand dropped 0.2% in June after rebounding 0.4% in May – short of the 0.4% expected on the Street. By the close: the Dow moved to gain 369 points, or 1.44%; with the S&P 500 advancing 1.05%, while the tech heavy Nasdaq saw the session out 0.66% firmer.
U.S. futures gained late Sunday amid a surge in coronavirus cases. The Dow futures up 142 points, while S&P 500 futures are 33 points firmer this morning. Florida has reported a record 15,300 new cases in a day, as Disney World reopened in Orlando. The dollar edged down in Asian trade on Monday as investors looked to looming economic data from around the world and U.S. corporate earnings; the dollar index against a basket of major currencies slipped 0.2% in early Monday trade to 96.45.

ASIA
Asian shares are firmly in the green on Monday morning, cheered by expectations that most U.S. earnings season would see most companies beat . The MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.15%, Japan’s Nikkei rose 2.01% and Hong Kong’s Hang Seng index advanced 1.16%. The Shanghai Composite gained 1.3% while Australia’s ASX 200 edged up 0.67%. Markets were looking ahead to the release of China’s economic growth data for April-June, a key indicator for trade, manufacturing and investments with implications for the entire region.

Commodities
OPEC Readies Next Move in Bid to Avoid Oil Taper Tantrum. Saudi Oil Minister Prince Abdulaziz bin Salman likes the idea of OPEC+ acting as the central bank of oil. A second wave of the pandemic threatens another slump in oil consumption, while the billion-barrel mountain of inventories that piled up during the first outbreak still looms. If OPEC+ increases supply just as the market falters then prices could crash once again. The Prince is to hold an online meeting with his OPEC+ counterparts, on July 15, to review progress.