Stocks fall | Stimulus talks continue

22/10/2020 U.S. and European equity futures retreats with Asian shares this morning, and the dollar is edging higher, after a top American intelligence official said that Russia and Iran have attempted to interfere in next month’s presidential election. S&P 500 contracts dropped. Tencent trades 0.18% lower in HK. The JSE Top 40 futures are indicating a lower start, down 330 points, or 0.65%.

Locally the FTSE/JSE Africa All-Share Index closed up 0.1% to 55,345.49, supported mainly by gains in the Platinum and gold sectors up 4.7% and 2.5% respectively. Banks also added a healthy 3.3%. The Rand has strengthened 1.2% to 16.27 vs the USD and is currently around the 16.31 level, with the Yield on 10 year govt rand bonds that fell 1.0 bps to 9.281%. South Africa’s main stock index is on a four-day winning streak, with gold producers and banks among the leading gainers, while the rand is at a one-month high as U.S. Stimulus Bets Boost Gold and the Rand.
Inquiry into state corruption continues hearings in Johannesburg, with focus on ports and rail operator Transnet

  • Anglo American Sued for Lead Poisoning in Zambia Mining Town
  • Investec Guns for Market Share as South African Economy Stumbles
  • (EXX SJ): Community Protest at Exxaro Leads to Fatal Shooting at Mine Ops

EARNINGS: (All times Central African Time)

  • Clicks, FY (CLS SJ)
  • Sasol, 1Q (SOL SJ)
  • Anglo American Platinum, 3Q (AMS SJ)
  • Kumba Iron Ore, 3Q (KIO SJ)

EU/UK
European stocks closed lower yesterday as U.S. stimulus talks continue. The pan-European Stoxx 600 closed down by around 1.3%, with travel and leisure stocks shedding 2.5% to lead losses as almost all sectors and major bourses fell into negative territory, with Germany’s DAX and France’s CAC shedding 1.41% and 1.53% respectively, while the U.K.’s FTSE 100 closed down 1.9%. Swedish telecoms giant Ericsson saw its shares jump almost 10% after a better-than-expected third-quarter earnings report, while Dutch resourcing firm Randstad added over 6% after strong results. Nestle beat third-quarter expectations and raised its 2020 organic sales growth target to 3%, but the consumer titan’s shares edged slightly lower by the close. Toward the bottom of the European blue chip index, London-listed shares of Centamin plunged more than 19% after the gold miner reported falls in production and sales for the third quarter. Sterling jumped 1.6% against the USD after the EU’s top negotiator Michel Barnier suggested that a trade deal with the U.K. is within reach.
US
Stocks fell slightly on Wednesday as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued their negotiations on a new fiscal stimulus package. Goldman Sachs economist Alec Phillips noted that “the biggest issues remain unresolved and a deal doesn’t seem particularly close.” The Dow Jones slipped 97 points, or 0.4%, to 28,210. Earlier in the day, the 30-stock average traded more than 100 points higher. The S&P 500 dipped 0.2% to 3,435 and the Nasdaq Composite slid 0.3% to close at 11,484. Netflix shares fell nearly 7% after the company reported disappointing earnings and reported fewer-than-expected subscriber additions. Goldman Sachs and Boeing were the worst-performing Dow members, falling 2.5% and 2%, respectively. Those declines were somewhat mitigated by a 28.3% jump in Snap shares. The social media company’s stock rallied on the back of on stronger-than-expected results for the previous quarter. Snap’s surge pushed the stock to an all-time high and lifted Facebook, Twitter and Alphabet. Facebook closed 4.2% higher and Twitter gained 8.4%. Alphabet shares advanced 2.3%.
ASIA
Asian shares are mostly lower, after the news that a top American intelligence official said that Russia and Iran have attempted to interfere in next month’s U.S. presidential election. Shares in Japan and China are lower, with those in Hong Kong and Sydney seeing modest losses. The Nikkei is 0.71% lower, the Hang Seng flat, with the Shanghai 0.45% in the negative%. In OZ the ASX 200 slipped 0.29%, with the metals & mining index adding 0.24%.
COMMODITIES
Oil extended its decline below $40 a barrel in New York after a surprise jump in U.S. gasoline stockpiles and slowing demand. The market is also facing rising supply from Libya and the prospect of additional crude from OPEC+ with cuts poised to ease in January.

Gold fell 0.7% to $1,911.84 an ounce -as the dollar strengthened, with investors digesting a warning about foreign interference in the U.S. election along with dimming prospects for a stimulus deal before the November vote.

Iron ore futures halted a four-day rally, down 0.8% to $116.40 a ton, on concerns Chinese demand is at risk of cooling.
Wishing You All A Good Day Ahead