Stocks slip from record highs | Boeing 737 Max flies once again | Bigger stimulus checks ahead?

30/12/2020 The dollar extended recent declines as traders squared positions ahead of year-end. Asian stocks, U.S. and European futures were mixed amid fading prospects for bigger government aid checks to individuals. Shares advanced in Hong Kong, China and South Korea, and S&P 500 futures pointed higher. Stocks retreated in Japan and Australia alongside European contracts. Tencent trading up 5.5% in HK. The JSE Top 40 futures are indicating a better start, up 500 points or 1.0%, with the Rand fairly steady at 14.67 vs the USD. We should see some support from Naspers and Prosus on the back of a rebound in Tencent.

Locally the FTSE/JSE Africa All-Share Index closed up 0.4% to 59,246, mostly supported by a rebound in Naspers and Prosus after hefty losses in the previous session, with gold and platinum shares weighing, The Rand was down 0.3% to 14.69 per US$, with the Yield on 10-year govt rand bonds that rose 9.90 bps to 8.86 bps.
South Africa’s Home Affairs Minister Aaron Motsoaledi to outline border controls and immigration guidelines under stricter restrictions to curb the spread of Covid-19 after the country was moved to virus alert level 3 until Jan. 15

  • Africa’s Virus Capital Risks Becoming Vaccine Laggard
  • S. Africa’s Eskom to Cut 2,000MW From Grid
  • Virus Resurgence Spurs South Africa to Ban Alcohol Sales
  • Distell Down Most in Five Months; Trading Volume Quadruples
  • Japan Found Case of Coronavirus Variant from S. Africa (Dec. 28)
  • Business Day.za: Interpol shares details of organised crime hand in fake vaccines found in SA
  • Fin24: Judgment reserved in SAA pilots’ urgent application against their lockout

ECONOMIC DATA:

  • 2pm: Nov. Monthly Budget Balance, prior -49.7 billion rand

EU/UK
European stocks closed higher yesterday following a rally on Wall Street in the previous session. The pan-European Stoxx 600 index ended up 0.76%, with most sectors and major bourses in positive territory,. Sentiment in Europe has been buoyed by a rally in U.S. stocks on Monday that came after President Donald Trump signed a $900 billion coronavirus relief package into law; the measure includes a direct payment of $600 to most Americans. Positive sentiment in Europe comes after a Brexit trade deal was agreed between the EU and U.K. on Christmas Eve. London’s FTSE 100 index traded nearly 2% higher. On Monday, the 27 ambassadors from EU member nations formally approved the deal that will be implemented on Jan 1. Drugmaker AstraZeneca was among the best performers on the FTSE index Tuesday afternoon with its shares up 3.8%. The company’s coronavirus vaccine is expected to be approved for use in the U.K. this week.
US
Stocks slipped on Tuesday after reaching fresh all-time highs as traders weighed the possibility of even more fiscal stimulus being approved by Congress. The Dow Jones Industrial Average closed 68.30 points lower, or 0.2%, at 30,335.67. The S&P 500 dipped 0.2% to 3,727.04, and the Nasdaq Composite fell by 0.4% to 12,850.22. Tuesday’s decline snapped a three-day winning streak for both the Dow and S&P 500. All three of the major averages hit record highs at the open. At its session high, the Dow was up more than 100 points. Senate Majority Leader Mitch McConnell blocked an attempt by Senate Minority Leader Chuck Schumer to fast-track a bill that would increase direct payments to Americans to $2,000 from $600. That bill was passed by the House late Monday. President Donald Trump had previously called for a $2,000 direct payment to Americans. On Tuesday, he tweeted: “Unless Republicans have a death wish, and it is also the right thing to do, they must approve the $2000 payments ASAP.”
ASIA
Stocks in Asia-Pacific are mixed this morning after major indexes on Wall Street snapped their multi-day winning streaks overnight. Mainland Chinese stocks were higher by the afternoon: The Shanghai composite gained 0.9% while the Shenzhen component advanced 1.4%. Hong Kong’s Hang Seng index rose 1.3%. China’s 2019 GDP growth was revised downward to 6.0%, according to a statement released Wednesday by the country’s National Bureau of Statistics. That compared against a pre-revision 2019 growth rate of 6.1%. Elsewhere, the Nikkei 225 in Japan slipped 0.28% after surging more than 2% on Tuesday to close at a level not seen since August 1990, according to data from Refinitiv. The Topix index dipped 0.42%. South Korea’s Kospi jumped 1.3%. Shares in Australia fell, with the S&P/ASX 200 down 0.65%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.93%. Today is the final trading day in 2020 for stocks in Japan and South Korea as their markets will be closed on Thursday.
COMMODITIES
Oil edged higher in Asia after an industry report pointing to a third straight weekly drop in U.S. crude stockpiles spurred optimism over the demand recovery in the world’s largest economy. Futures in New York traded near $48 a barrel after climbing 0.8% Tuesday.
Gold edged higher after U.S. Senate Majority Leader Mitch McConnell blocked initial efforts for a vote on raising household relief payments to $2,000. Spot gold was up 0.2% at $1882.74 an ounce by 10:36 a.m. in Shanghai. Copper swung between narrow gains and losses on the London Metal Exchange, and is up 3.6% this month on rising hopes for an economic rebound in 2021. Silver climbed 0.3% following its highest close since September on Monday; platinum gained 1.2%, and palladium was little changed. Aluminum dropped 0.3% and a close at this level would be the lowest since November.
Iron ore took a heavy hit as China vowed to rein in steel output next year, threatening demand close to the end of what’s been a stellar year for the commodity. Most-active futures sank as much as 4.4% to $153.80 a ton
on the Singapore Exchange.