Best Dow gain since November / GameStop mania unwinds / Stock Rally Extends in Asia / Dollar Edges Lower

03/02/2021 Most Asian stocks rose Wednesday, extending a global rally amid a slew of corporate earnings and a crumbling of the retail trading frenzy that fueled swings in heavily shorted shares. The dollar retreated. Shares outperformed in Australia and Japan, though dipped in Hong Kong. S&P 500 and Nasdaq 100 futures climbed after Alphabet Inc. and Amazon.com Inc. reported better-than-estimated revenue, with the online-retail giant saying Chief Executive Officer Jeff Bezos will step down from his post. U.S. stocks earlier closed higher for a second session. Treasury yields edged up amid a move to fast track a U.S. stimulus plan. Elsewhere, oil traded at its highest in over a year on tightening global supplies and signs of strength in physical markets. The People’s Bank of China earlier drained some funds from the financial system. Tencent up 1.1% in HK. The JSE Top 40 futures are indicating a flat start, up only 27 points or 0.05%, with the Rand fairly steady at 14.96 vs the USD.

Locally the FTSE/JSE Africa All-Share Index closed down 0.1% to 62,733. Miners weighed the most, with Platinum’s and Gold that got hit the most, down 3.7% and 2.6% respectively. Banks and retailers on the other hand fared well on the back of a stronger rand, closing up 2.6% and 1.5% with Naspers and Prosus both closing in the black. The Rand was up 0.6% to 14.98 per US$, with the Yield on 10-year govt rand bonds that fell 8.70 bps to 8.56 bps.
Anglo American Platinum Ltd. CEO Natascha Viljoen addresses Mining Indaba Virtual Conference. Executives from Sibanye Stillwater Ltd., Anglo American Plc and Harmony Gold will also speak at the event.

  • Ford to Spend $1 Billion in Biggest South Africa Investment
  • Eskom, Sasol Rebuffed, Creecy Says in Pollution Suit Fight
  • Record Demand at South Africa’s Debt Sale Defies Budget Risk
  • South African Stocks Edge Higher After Coronavirus Curbs Relaxed
  • Citi Sees Alcohol Bans as Lingering Issue in S. African Retail
  • Rand Gains as Coronavirus Restrictions Ease
  • S. Africa Should Expect Two More Covid Waves: Alexander Forbes
  • Richemont Climbs; RBC Raises PT as Company ‘More Agile’ Now
  • Vodacom 3Q Revenue Gains 6.4%, Increases Network Investment
  • 2pm: Deputy Reserve Bank Governor Rashad Cassim addresses Allan Gray event on the state of the economy
    EARNINGS:
  • Sappi Ltd. (SAP SJ)

ECONOMIC DATA:

  • 9:15am: Jan. Standard Bank South Africa PMI, est. 50.0, prior 50.2

CORPORATE EVENTS:

  • Annual General Meetings: SAP SJ
  • Earnings Calls: SAP SJ
  • Sales Results: GLEN LN

EU/UK
European stocks closed higher on Tuesday amid investor optimism for a post-pandemic recovery, while fears over a speculative retail trading frenzy in the U.S. waned. The pan-European Stoxx 600 ended Tuesday’s session up by 1.3%, with travel and leisure shares climbing 3.2% to lead gains as all sectors apart from basic resources and telecoms held in positive territory. In London the FTSE 100 added 0.78%, Germany’s DAX put on 1.5%, with France’s CAC 40 gaining 1.8%. Globally, investors are keeping an eye out on further signs that economic recovery following the coronavirus pandemic is not too far away, as vaccination rollouts continue and new infections and fatalities start to slowly decline amid lockdowns. European markets are also focused on coronavirus developments and hopes that the EU will soon receive more vaccine supplies, after several weeks of disappointments and disagreements with vaccine makers. On the data front, the euro zone economy dropped by 0.7% in the final quarter of 2020 as governments stepped up social restrictions, Eurostat revealed on Tuesday, while a preliminary reading points to an annual GDP contraction of 6.8%. Earnings remain on the radar, with energy giant BP on Tuesday reporting a weaker-than-expected full-year net loss, its first for a decade, after a tumultuous 12 months for the oil and gas industry. BP shares were down 4.5% by the close.
US
U.S. stocks jumped on Tuesday, building on a strong rally in the previous session as concerns about a speculative retail trading frenzy continued to ease. The Dow Jones Industrial Average climbed about 475 points, or 1.6%, to 30,687 for its best daily performance since November. The S&P 500 gained 1.4% to 3,826, pushing its two-day rally to 3%. The tech-heavy Nasdaq Composite popped 1.6% to 13,612, bringing its week-to-date gains to more than 4%. The back-to-back advance in the broader market coincided with a sharp reversal in GameStop, the video game stock that captivated Wall Street with its massive short squeeze coordinated by a band of retail investors on social media. GameStop, fresh off a 400% rise last week, fell another 60% Tuesday. The stock has lost more than 70% of its value since Friday. Meanwhile, investors will be following stimulus negotiations in Washington, after congressional Republicans made a counteroffer to President Joe Biden’s $1.9 trillion stimulus plan on Sunday. Investors also awaited big earnings reports Tuesday, with tech giants Amazon and Alphabet set to release quarterly numbers after the market close.
ASIA
Stocks in Asia are mixed to mostly higher, with the Nikkei in Japan up 1.0%, the Hang Seng in HK up 0.08% and in China the Shanghai is up only 0.2%. In Australia the ASX 200is up 0.92%, but most miners are negative with the Metals & Mining index shedding 1.2%
COMMODITIES
Silver gained after the biggest loss since August, with markets calming following the buying frenzy that sent prices to an eight-year high earlier this week. Futures rose as much as 3.2% following a turbulent two days.
Oil extended gains in Asia after closing at the highest level in more than a year as declines in U.S. and Chinese crude stockpiles gave fresh impetus to a rally driven by tightening global supplies. Futures in New York traded near $55 a barrel after jumping almost 5% over the previous two sessions in tandem with a broader rally in financial markets.
In global markets, gold prices rose to $1,844.48 an ounce, up 0.4%, supported by a retreat in US dollar. Among other precious metals, platinum today gained 0.3% at $1,097 and palladium shed 0.1% to $2,240.
Iron ore recovered as investors awaited production data from Brazil’s Vale SA and assessed vessel- tracking data in Australia. Futures edged 0.9% higher to $145.60 a ton on the Singapore Exchange, after plunging 4.4% on Tuesday.
Copper extended declines amid expectations demand in China, the top consumer of the metal, will slow as the country approaches the Lunar New Year break. Chinese manufacturing activities are expected slow to during the holidays that fall next week as families travel during the nation’s most important festive season. Copper fell 0.3% to $7,757 a metric ton.