S&P 500 climbs to record close | Value rotation resumes | U.S. reports more than 150,000 Covid-19 cases in one day

16/11/2020 Asian stocks together with U.S. and European futures are pushing higher this morning, buoyed by positive sentiment on regional trade, after a slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement; and signs of opposition to a national American lockdown despite surging virus cases. The dollar retreated, with Oil pushing higher. Tencent trades 1.2% lower in HK. The JSE Top 40 futures are indicating a better start, up 260 points, or 0.50%, with the Rand also trading firmer up 0.25% to 15.47 to the USD.

Here are some events to watch out for this week:

  • Brexit talks look set to continue as the U.K. and EU approach the latest deadline.
  • Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Former Federal Reserve Chair Janet Yellen and Indian Prime Minister Narendra Modi are among the many speakers.
  • OPEC+ Joint Ministerial Monitoring Committee meets Tuesday.
  • U.S. retail sales due Tuesday.
  • Bank Indonesia rate decision Thursday.
    Locally the FTSE/JSE Africa All-Share Index closed up 0.3% to 57,182, mostly supported by the platinum sector +2.3%, with banks and retailers weighing on the market, down 2.7% and 0.54% respectively, after strong gains earlier in the week. The Rand was up 0.3% to 15.60 vs the USD, with the Yield on 10 year govt rand bonds that rose 5.0 bps to 8.893%.
    Commission of inquiry into state corruption will hear application for the recusal of Chairman Raymond Zondo by South Africa’s former President Jacob Zuma.
  • South African Coal Plant Set Back by Years, Lawyer Says
  • South Africa’s Biggest Polluter Aims for 2050 Net Zero Emissions
  • South Africa President’s Main Rival Charged With Corruption
  • Yield Mania Gives Needed Break to Indebted Emerging Markets
  • MultiChoice, Vivendi to Team Up on New Africa TV Productions

EARNINGS:

  • Astral Foods (ARL SJ)
  • Octodec Investments (OCT SJ)
  • Vodacom (VOD SJ)

CORPORATE EVENTS:

  • Annual general meetings: AIL SJ, PPC SJ
  • Earnings Calls: OCT SJ
  • Sales Results: SHP SJ

EU/UK
European stocks closed slightly higher Friday as investors struck a positive tone on the prospect of an effective coronavirus vaccine. The pan-European Stoxx 600 closed fairly flat after initial losses, with sectors and major bourses mostly finishing in positive territory. For the week, the index closed up by around 3.5%. Germany’s DAX end up 0.18%, while France’s CAC gained 0.33%, with London’s FTSE 100 closing down 0.36%. Boris Johnson’s attempt to get his premiership back on track has stumbled before it even began, as the U.K. prime minister was forced to self-isolate after meeting a lawmaker who tested positive for Covid-19. Looking at individual stock names, Delivery Hero sank 6% to the bottom of the Stoxx 600 after revealing South Korea’s antitrust watchdog recommended a sale of its Yogiyo subsidiary to secure approval for its planned $4 billion takeover of food delivery app owner Woowa Brothers. The German food delivery giant said it would not accept the recommendation.
US
U.S. stocks rose on Friday as investors bet again on stocks that would benefit from a potentially effective vaccine and economic recovery next year. The S&P 500 advanced 1.4% to 3,585.15, and posted a record closing high. The Dow Jones Industrial Average jumped 399.64 points, or 1.4%, to close at 29,479.81. The Nasdaq Composite advanced 1% to 11,829.29. The Russell 2000, which tracks small-cap stocks, jumped more than 2% to an intraday record, and posted its first all-time closing high since August 2018. Shares of cruise operator Carnival rose more than 7%. United Airlines and Boeing were both up more than 5%. Disney closed 2.1% higher on the back of better-than-expected quarterly numbers. At the sector level, energy and industrials rose 3.8% and 2.2%, respectively, to lead the S&P 500 higher. Financials were up more than 1%.
ASIA
The Asian benchmark was on track for a record close, with Japan and South Korea outperforming. A slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the globe’s population and gross domestic product. In Australia, share trading was suspended for the day due to a market data issue. The Nikkei is up 2.05%, the Hang Seng, 0.57% firmer, with the Shanghai gaining 0.87%.
COMMODITIES
Oil rose toward $41 a barrel in New York as advisers to President-elect Joe Biden ruled out a national lockdown to curb the spread of Covid-19, moving away from measures that would cripple the economy. The pandemic’s impact on demand is likely to be a key focus at a meeting on Tuesday of OPEC+’s Joint Ministerial Monitoring Committee, which typically reviews compliance to production cuts.
Gold climbed for a third day amid concerns over a sustainable recovery as the pandemic worsened, although a national U.S. lockdown was ruled out by the incoming team of President-elect Joe Biden. The traditional haven’s advance came as the dollar showed renewed weakness. Spot gold traded 0.4% higher at $1,897 an ounce after climbing 0.7% on Friday. Silver rose 1.4%, platinum gained 1% and palladium advanced 0.6%.
Iron ore futures gained amid data showing China continued to report strong steel output figures, while port inventories of Brazilian material were at a record. In official data Monday, steel output in October remained above 90 million tons for the sixth month, and year-to-date production is up 5.5% compared with 2019. Iron ore prices have rallied and spot prices have largely hovered at about $120 a ton since August on record steel output from China mills.