Asian Stocks Drift; Strong Earnings from Microsoft Corp. Boost Nasdaq Futures

27/01/2021 Asian markets traded sideways Wednesday as investors mulled a slew of earnings reports and hurdles to stimulus. Shanghai remained flat, while Australia underperformed as it reopened after a holiday. Nasdaq futures jumped following a strong earnings report from Microsoft Corp. S&P 500 futures fluctuated after the benchmark ended yesterday’s lower. The dollar on the back foot against major peers on Wednesday as markets await comments from Fed. Chair Powell, who is likely to sound dovish. Oil prices climbed on data showed U.S. crude stockpiles fell last week and China reported its lowest daily rise in COVID-19 cases, bolstering hopes of a pick-up in demand. U.S WTI crude futures rose 0.36%, to $52.80 a barrel, while Brent crude futures are 0.34% firmer at $56.10.

The JSE lost 0.99% to 63,923.63 points and the Top-40 1.16% on Tuesday, with Naspers and Prosus falling 4.96% and 5.21% respectively. The U.S stimulus package is still far from done-deal as the proposed $1.9-trillion injection is facing increasing resistance from Republicans, calling for a smaller number. Banks gained 1.9% and financials 1.58%, as the rand broke a three-day losing streak strengthening alongside its emerging-market peers – an intraday best of R15.0400/$.

NEWS:
• Bitcoin Faces South African Scrutiny as Alleged Ponzi-Scheme Probed
• Ramaphosa Urges Rich Nations to Free Up Hoarded Vaccines
• South Africa Starts $79 Million Fund to Help Tourism Industry
EQUITY PREVIEW:
• Prosus Bought 2.97 Billion Rand of Naspers Shares Jan. 18-22
LOCAL MEDIA
• Daily Maverick: Commission hears of alleged covert ops in media, judiciary, civil society, academia and unions
• Daily Maverick: Gauteng Department of Education spent R431-million in three months on unnecessary ‘deep cleaning’
• Business Day: US restricts travel from South Africa on Covid-19 variant concern
GOVERNMENT:
• 9:30am: Briefing by Auditor General on audits of state-owned enterprises
• Inquiry into state corruption continues hearings in Johannesburg
Annual General Meetings:
• CLS SJ, LHC SJ

EU/UK/US
European equities markets advanced on Tuesday as share buybacks and earnings outweighed concerns over the spread of coronavirus and Italian politics. The pan-European Stoxx 600 index rose 0.63%, alongside a gain of 1.66% for the German Dax while the FTSE 100 ended the session up 0.23%. The EU hit out at AstraZeneca, claiming the company was failing to honour its contracts.

On Tuesday S&P 500 fell from a record high with investors turning their focus to the FOMC’s meeting and a slate of earnings reports. Home prices and consumer confidence signalled at a recovery, but freshly instituted travel restrictions stoked concern about the pace of the recovery. Both the Dow an Nasdaq closed flat -0.07%, while the S&P 500 slipped -0.15% for the day. The IMF updated its World Economic Outlook forecasts on Tuesday and said it now expects overall global growth of 5.5%, an upgrade of 0.3%, to reflect the rollout of Covid-19 vaccines and economic stimulus packages. U.S futures, the Dow and S&P 500, both in the red as traders await the FOMC decision, and Nasdaq futures up 0.43% after Microsoft earnings.

ASIA
In Australia, the ASX 200 was down 0.65% after returning from a holiday. CPI rose 0.9% both quarter-on-quarter and year-on-year during the fourth quarter of 2020. Hong Kong’s Hang Seng edged up 0.10%.
China’s Shanghai Composite inched up 0.37%. Japan’s Nikkei 225 was up 0.26%, the country’s state of emergency, currently set to expire on Feb. 7, could reportedly be extended until the end of February.