Dow and S&P 500 slip from record highs | Nasdaq closed at record high | Coronavirus cases, deaths keep rising

08/12/2020 Asian stocks are drifting lower this morning following it’s US peers as swelling coronavirus infections across the U.S. weighed on risk assets overnight. Treasuries held on to Monday’s gains. S&P 500 futures dipped after the benchmark dropped from an all-time high amid fears of restrictions as infections climb, with European futures also lower. The pound pared overnight losses as the U.K. backed down from a threat to break the Brexit agreement. The dollar held gains against its major peers. Oil slipped and gold was steady after jumping more than 1% yesterday. Tencent trading 0.77% higher in HK following the Nasdaq that closed at yet another record high. The JSE Top 40 futures are indicating a slightly lower start, down 61 points or 0.11%, with the Rand slightly weaker -0.18% to 15.17 vs the USD.

Locally the FTSE/JSE Africa All-Share Index closed up 0.2% to 59,527, mostly supported by platinum counters with the sector that closed up 5.67%, with banks retailers and property stocks mostly on the backfoot. The Rand strengthened 0.5% to 15.12 per US$ as of 7:52 p.m., with the Yield on 10 year govt rand bonds that fell 2.4 bps to 8.934%.
South Africa is expected to have come out of its longest recession in 28 years in the third quarter, when most of the curbs to contain the spread of the coronavirus were eased. Gross domestic product is forecast to have expanded an annualized 54.4% in the three months through September from the previous quarter. Statistics South Africa is scheduled to publish the data at 11:30 am.

  • South Africa Government Offers SAA Staff Less Than Legally Required

EARNINGS:

  • PPC 1H Net Income 287M Rand
    NAMES BRENDA BERLIN CFO DESIGNATE FROM FEB. 15
    CFO RONEL VAN DIJK TO STEP DOWN FROM MARCH 31
    1H HEADLINE EPS 0.19 RAND
    1H EBITDA 996M RAND, +15% Y/Y
    1H REV. 5.01B RAND

ECONOMIC DATA:

  • 11:30am: 3Q GDP Annualized QoQ, est. 54.4%, prior -51.0%
  • 11:30am: 3Q GDP YoY, est. -7.5%, prior -17.1%

EU/UK
European stocks closed lower yesterday as market focus in the region centered on a last-ditch effort between the U.K. and EU to reach a post-Brexit trade deal. The pan-European Stoxx 600 index closed 0.3% lower, with the majority of sectors finishing in negative territory. U.K. banks and homebuilder stocks were under pressure on the index and sterling was down nearly 1% against the dollar. London’s FTSE was up 0.1%, however, with Germany’s DAX that retreated 0.21%, while France’s CAC closed the session down 0.64%. The U.K. and EU are making last efforts to reach a post-Brexit trade deal this week, with Britain’s chief negotiator going to Brussels on Sunday in a bid to salvage talks that had to be paused on Friday, due to outstanding issues that remain to be resolved, including fishing rights and competition rules.
US
The Dow Jones Industrial Average and S&P 500 fell last night following a record-setting session as traders worried about rising coronavirus cases and searched for clues on additional fiscal aid. The 30-stock Dow closed 148 points lower, or 0.5%, at 30,069 and snapped a four-day winning streak. The S&P 500 dipped 0.2% to 3,691. The Dow and the S&P 500 had closed at all-time highs on Friday. The Nasdaq Composite, meanwhile, rose 0.5% to 12,519 and hit a fresh record high. Value stocks — which had been on a tear recently — lagged their growth counterparts on Monday as uncertainty grew over the near-term economic outlook. The iShares Russell 1000 Value ETF (IWD) dipped 0.6%, and the iShares Russell 1000 Growth ETF (IWF) climbed 0.4%. Intel was the worst-performing Dow stock, falling 3.4%. The energy sector led the S&P 500 lower, sliding 2.4%. Facebook rose 2.1%, and Apple gained 1.2% to lead the Nasdaq higher. Tesla also contributed to the Nasdaq’s gains, advancing 7.1% and reaching an all-time high.
ASIA
Asia-Pacific markets trading mixed this morning as investors remained cautious over rising coronavirus cases, U.S. stimulus negotiations as well as Brexit talks between the U.K. and the European Union. Japan’s Nikkei 225 fell 0.34% while the Topix index was down 0.16%. In South Korea’s the Kospi declined 1.1%. Australia’s benchmark ASX 200 reversed earlier losses to trade up 0.2%. The energy subindex erased some of its losses but was still down 0.65%. It happened after oil prices slipped in the overnight session on Monday. Oil stocks in Australia mostly declined: Shares of Santos fell 1.6%, Oil Search was down by 2.23% and Woodside Petroleum traded 0.22% lower. In Hong Kong, the Hang Seng index fell 0.53% in early trade. The health-care arm of Chinese e-commerce giant JD.com made its trading debut in Hong Kong and saw its share price surge compared to the company’s issue price. Chinese mainland shares also trading up: The Shanghai composite fell fractionally, the Shenzhen composite was up 0.32% and the Shenzhen component added 0.47%.
COMMODITIES
Oil fell for a second day as near-term demand risks due to a resurgent pandemic tempered optimism over the prospect of vaccine rollouts. Futures dropped toward $45 a barrel in New York after closing down 1.1% on Monday
Gold rose to the highest level in two weeks amid swelling coronavirus infections across the U.S., with markets increasingly looking for a stimulus deal to be reached. Spot gold advanced as much as 0.5% to $1,871.90 an ounce, the highest intraday level since Nov. 23. Silver climbed 0.9%, platinum rose 0.2% while palladium was steady.
Copper extended its retreat from a more- than-seven-year high as rally threatened to cool demand and record U.S. coronavirus infections weighed on risk sentiment. Consumption in China has seen some constraints following the rapid gain in prices. Copper fell 0.3% to $7,690.50 a ton on the London Metal Exchange. Prices are down for a second day and touched $7,800 on Monday, the highest since 2013.
Iron ore futures in Singapore closed in on $150 a ton as supply from Australia declined just as China’s demand surges on stimulus and an economic rebound. Shipments from Port Hedland fell about 4% in November from a year earlier, the first decline since February, according to figures released by the Pilbara Ports Authority on Tuesday. Iron ore futures were 0.9% higher at $145.29, after earlier touching a record $147.14.