12/08/2020 Asian stock markets retreat on Wednesday amid some position-trimming and hanging doubts over the timing of a spending package from Washington. Gold selloff entered a second day after it tumbled the most in seven years Tuesday as US bond yields spiked higher. The 10-year US treasury yield jumped the most ahead of an expected flood of government and corporate debt issuance. Locally, on Tuesday the JSE erased all of its losses for the year rising 0.72% to close 0.15% higher for 2020. Both banks and general retailers gained 3.35% and 2.93% respectively at the close. The rand firmer to R17.46 levels to the dollar as positive news about various Covid-19 vaccines lifted appetite for riskier assets. Yield on 10 year govt rand bonds rose 4.6 bps to 9.279%. Gold spot tumbled more than 3% last night, from $1929.74 to $1862.82, as a rise in bond yields cut into the negative real rates that had supported the metal. Gold currently trading $ 1880.27. We most likely to open softer this morning, following Asian markets: Tencent marginally on the backfoot 0.20%, while the IG markets indicate Top-40 futures 340 points on the downside.
• (SNT SJ): Santam Appoints Paul Hanratty as Non-Executive Director
• (SUI SJ): Sun International Offering Prices ZAR1.2b Shrs at ZAR9.44/Shr
• (MIX SJ): Canaccord Genuity 40th Virtual Annual Growth Conference
• Trump’s Assault on WeChat Endangers a $280 Billion Tencent Rally
• ECONOMIC DATA: 11:30am: (SA) July SACCI Business Confidence, 1pm: (SA) June Retail Sales Constant YoY, est. -5.0%, prior -12.0%, 1pm: (SA) June Retail Sales MoM, est. 10.0%, prior 74.2%
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• Ex Dividends: OCE SJ @ 100cps, NPKP SJ @ 6cps, NPP! SJ @ 6.50cps
European markets closed positively former on Tuesday as investors bet on a possible Covid vaccine from Russia as well as further US stimulus, shrugging off bleak UK jobs data. The pan-European Stoxx 600 index closed the day 1.68%, alongside the FTSE 100 gaining 1.71%, with the German Dax advancing 2.04%, while the CAC-40 saw out the session 2.41% stronger. UK employment declined by 220,000 on the quarter, marking the largest quarterly fall since the wake of the financial crisis in 2009.
The Dow closed 104.53 points lower on Tuesday reversing gains recorded in the previous session after the US President signed an executive order extending the nation’s Covid-19 unemployment relief programme, and despite Russia giving regulatory approval for the world’s first Covid-19 vaccine. The S&P 500 slipped 0.80% at the close, while the Nasdaq saw out the session 1.69% weaker. Johnson & Johnson also claimed it could produce as many as 1.0bn doses of its own Covid-19 vaccine candidate if it proves successful. US stock index futures mixed at the moment with the Dow futures up 25 points, the S&P500 flat and the Nasdaq 21 points firmer.
Here are some key events coming up:
• Earnings include E.ON, Deutsche Telekom, Carlsberg, Tencent and JD.com.
• U.S. CPI for July is scheduled for Wednesday.
Asian stocks dipped on Wednesday on growing concerns over whether the U.S. lawmakers would agree on an additional round of big fiscal stimulus to support an economy still struggling with the coronavirus.
Hopes of vaccine development, however, prompted some investors to reduce safe-haven assets such as gold and government bonds, and to buy back battered stocks of companies hit hardest by the virus. Tokyo’s Nikkei bugged the trend gaining 0.25%, while Hong Kong’s Hang Seng edged 0.45% lower. The Shanghai Composite index fell 2% while Australia’s ASX 200 declined almost 0.5%
Oil prices moved higher on Wednesday after report showed that U.S. inventories of crude fell more than analysts had expected. Brent crude was up 10 cents, or 0.2%, at $44.70 a barrel, while WTI oil was up 6 cents, or 0.13%, at $41.74 a barrel.