Global Equities Are Closing In On Levels Last Seen In February

04/08/2020 On Monday both the JSE/All-share and the Top-40 index started the month of August on a positive note, closing firmer 0.19% and 0.39% respectively. The SAinc. names were down for the most part of the day yesterday with gains in Shoprite, Sasol, Naspers and Prosus helping the local bourse to keep head above waters. The retail giant, Shoprite, was up almost 10% at some point during the day after the group announced that it would exit Nigeria after 15 years – the stock closed 8.47% on Wednesday to R113.43. Banks dropped 4.82%, financials 3.14% and the gold index slipped 0.87%. The Top40 futures are pointing to a good start at the opening, up 254 points, while Tencent in Hong Kong is up almost 1.8%. Rand down 0.8% to 17.20 per dollar in line with emerging-market currencies as investors worry about a rise in Covid-19 infections in a number of countries across the globe. The yield on 10 year govt rand bonds rose 2.5 bps to 9.277%.

• Shoprite Plans To Exit Nigerian
• Dollar Rebound Signals Rocky Road for South Africa’s Rand
• Virus Graft Exposes Ramaphosa’s Shaky Hold on South Africa’s ANC
• AB InBev South Africa Cancels R 2.5bn in Upgrades
• EARNINGS:7am: ROYAL BAFOKENG PLATINUM 1H EBITDA 2.09M RAND, ROYAL BAFOKENG PLATINUM 1H REV. 4.61B RAND, +46% Y/Y
• National Treasury will offer 6.6 billion rand of bonds at a weekly auction as the government increases borrowing to plug a fiscal deficit forecast to swell to more than 15% of gross domestic product this year.

EU/UK
European markets snapped higher in the first trading session of August, bolstered by better-than-expected readings on manufacturing sector activity in Europe, China and the US. IHS Markit’s UK manufacturing sector Purchasing Managers’ Index was revised lower from a preliminary reading of 53.6 for July to 53.3 and against the June reading of 50.1. HSBC posted a 65% drop in interim profits and warned that it was expecting full-year loan losses of between $8bn and $13bn, shares of the banking stock closed down 2.91%. At the end of trading: the benchmark Stoxx 600 added 2.05%, the FTSE100 gained 2.30%, alongside a 2.71% advance for the German Dax, while in Paris the CAC-40 closed 1.93% in the green.

US
The Dow closed 236, or 0.89%, points higher on Monday after Apple, Amazon and Facebook all posted better-than-expected quarterly financial results the evening before. ADT shares, home security firm, skyrocketed after revealing Google parent company Alphabet had taken up a 6.6% stake in the group, while Microsoft shares gained after confirming reports that it was in talks to purchase social video app TikTok. President Trump on suggested the U.S. government should get part of the proceeds of any sale of Chinese-owned video-sharing app TikTok, he also signed an executive order that aims to prevent federal agencies from replacing U.S. workers with overseas staff. The market turned attention towards stimulus talks in Washington and a reading of July’s purchasing manager index. The IHS Markit US manufacturing PMI for July was revised lower to 50.9 on Monday from a preliminary estimate of 51.3. By the close: the S&P 500 was 0.72% firmer and the Nasdaq saw out the session 1.47% stronger.

US futures little changed this morning with the DOW up 17 points, while the S&P500 futures are flat 1 points. Disney is set to report quarterly results after market close: the company is expected to have swung to a net loss of more than $1 billion during the third quarter.

ASIA
Asian shares rose on Tuesday after strong U.S. manufacturing data and gains in tech stocks. The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9%, while shares in China nudged up 0.1%. Australian stocks gained 1.96%, while markets in Tokyo are 1.72% firmer. The Reserve Bank of Australia was scheduled to make an announcement Tuesday on interest rates following its latest monetary policy meeting. It is widely expected to leave rates unchanged.

COMMODITIES
Oil continues to be range bound between $40 to $ 45 per barrel as Opec and its allies are set to wind back output cuts in August. Brent crude slid 0.68% to trade $43.83 and WTI crude w0.66% at $40.71.
Prices fell on Monday on fears about the economic fallout from rising Covid-19 cases around the globe and on oversupply In past month.