Futures Rise on Stimulus Bets; Dollar Dips

25/01/2021 Asian equities markets and U.S. futures rose Monday as investors focused on the prospect of additional fiscal stimulus. Stocks outperformed in Hong Kong and saw more modest gains in Japan and Australia. U.S. futures are firm, with Nasdaq contracts outperforming ahead of tech earnings reports this week. Wall Street slipped Friday on sobering virus trends. Gold down 0.10% at $1,853.25, but stimulus hopes cap losses. Oil prices slipped for a second straight session on Monday as renewed COVID-19 lockdowns raised fresh concerns about global fuel demand. Brent crude futures for March fell 0.09% to $55.36 a barrel, while U.S. WTI crude for March was at $52.25 a barrel, down or 0.3%.

On Friday the JSE fell 0.3% to 63,987 points – up 0.70% in 5 days – and the Top-40 0.1%. The rand traded back above R15/$ after Hong Kong imposed its first lockdown to combat Covid-19.China said it would impose strict testing on travellers during its Lunar New Year celebrations, 11Feb-17Feb, amid an increase in infections. Top-40 futures on IG markets are 800+points in the green, indicating a good start at the opening bell locally.

EQUITY PREVIEW:
• Nedbank Chairman Vassi Naidoo Taking Immediate Leave of Absence
• Gold Fields Begins Construction of Salares Norte Project
• South African Stocks Set for ‘Kick’ as Money Flows to EM: Anchor
• Woolworths Raised to Hold at SBG Securities; PT 44.20 rand
EARNINGS:
• OLD MUTUAL FY GROSS FLOWS 188B RAND, 10% UP ON PRIOR YR
• OLD MUTUAL SEES FY HEPS& EPS BE MORE THAN 20% LOWER Y/Y
• WOOLWORTHS GROUP SALES FOR 26-WEEK ROSE 5.3%
• WOOLWORTHS SALES FOR 26-WEEKS FELL 0.5% IN CONSTANT CURRENCY
EVENTS:
• Absa’s first quarter economic outlook

EU/UK/US
European markets closed weaker on Friday as fears of extended Covid-19 travel curbs on the continent, downbeat UK retail sales and weak business survey readings all hit sentiment. The pan-European Stoxx 600 index slipped just 0.57%, the German Dax dipped 0.24%, alongside the FTSE100 giving up 0.30%.

The S&P 500 slipped on Friday as attention returned to Covid-related uncertainties, including the timeline of the proposed $1.9 trillion aid package. The Dow gave up 0.57% at the close, alongside the S&P500 slipping 0.30%, while the Nasdaq bugged the trend to close 0.10% firmer. US futures are all in positive territory as Apple, Tesla lead a tsunami of earning this week.

These are some key events coming up in the week ahead:
• Microsoft Corp., Apple Inc., Tesla Inc., Facebook Inc., UBS Group AGand Samsung Electronics Co. are among companies reporting results.
• Chinese President Xi Jinping is due to speak at the World Economic Forum’s “The Davos Agenda 2021” online event on Monday.
• People’s Bank of China Governor Yi Gang and European Central Bank Chief Economist Philip Lane speak at a conference on Monday.
• Data on U.S. home prices and consumer confidence come Tuesday.
• The Federal Open Market Committee monetary policy decision and briefing by Chair Jerome Powell are scheduled for Wednesday.
• Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.
• U.S. personal income, spending and pending home sales come Friday.

ASIA
Asian shares rose amid some hopes for recovering economies slammed by the pandemic, as market attention turned to upcoming company earnings.
Japan’s benchmark Nikkei 225 gained nearly 0.36% in morning trading, Australia’s ASX200 also added 0.3%. Hong Kong’s Hang Seng jumped 2.14%, while the Shanghai Composite gained 0.83%.