Global Stock Markets Slump As Wall Street Earnings Disappoint

28/01/2021 Global stocks retreat as disappointing earnings from U.S tech giants add concerns about valuations. Asian markets too a dive on Thursday, with Australia and Shanghai seeing the bulk of losses. Nasdaq futures underperformed as results from the likes of Apple Inc. and Tesla Inc. sent shares sliding. The S&P 500 slumped 2.6% earlier after Federal Reserve officials left their main interest rate unchanged and made clear the central bank was nowhere near exiting massive support for the economy. Oil prices slid in early trade on Thursday on fresh worries about weakened fuel demand. Gold was down on Thursday, investors turning to the dollar after the U.S. Fed. Reserve concerns about the pace of the economic recovery from the impact of COVID-19.

The JSE fell 1.78% to 62,784 points, dragged lower by miners, Naspers and Prosus. Top-40 gave up 1.83% at the close, platinum miners fell 4.77%, resources 3.77%, the gold mining index 1.47%. Global markets turned weaker later in the day on Wednesday as the risk-off trade was a function of the reality that U.S stimulus package won’t be rubber-stamped meekly through the US Senate.

NEWS:
• Pfizer Applies for Vaccine Registration in South Africa
• Eskom Needs Plan, Investment for South Africa’s Renewables Build
• S.Africa Will Be Able to Pay for Covid-19 Vaccines: Treasury
• South Africa to Allow Use of Ivermectin to Treat Covid-19
• South Africa Needs Big Fiscal Effort to Stabilize Debt, IMF Says
EQUITY PREVIEW:
• Old Mutual Investment Group Names Tebogo Naledi as MD
• Pepco Revenue Rises as Steinhoff Revives Listing Plan
• Naspers Looks to Reduce Impact of Johannesburg Bourse Dominance
• Life Healthcare 1Q Revenue Rises 5% y/y on Like-For-Like Basis
ECONOMIC DATA:
• 11:30am: Dec. PPI MoM, est. 0.2%, prior 0%
• 11:30am: Dec. PPI YoY, est. 3.1%, prior 3.0%
GOVERNMENT:
• Fitch holds webinar to discuss African sovereigns’ outlook for the year
• Energy Regulator announces decision on Eskom’s third multi-year price determination regulatory clearing account applications
CORPORATE EVENTS:
• Annual General Meeting: RDI LN
• Sales Results: AAL LN, AMS SJ, KIO SJ

EU/UK/US
European markets finished in negative territory on Wednesday as investors eyed the latest policy announcement from the U.S Feds, and a row between AstraZeneca and the EU over Covid-19 vaccine supply dampened sentiment. The pan-European Stoxx 600 index ended down 1.16%, the German Dax retreated 1.81%, while the FTSE100 ended the session 1.30% lower. Miners were weaker generally, with:- Rio Tinto down 2.96%, Antofagasta falling 2.95%, BHP 2.4% weaker, Glencore sliding 6.67%, and Anglo American 6.21% weaker.

Wall Street extended morning decline into the afternoon as the Fed. Chair. Powell said that the path to economic recovery depends on vaccinations to combat the covid-19 virus. The S&P 500 fell the most in three months as investors analyzed the latest batch of corporate earnings. At the closing bell; the Dow lost 2.05%, the S&P 500 2.57%, while the Nasdaq saw the session out 2.61% weaker. U.S futures are lower on Thursday, with Nasdaq underperforming the most, down 0.40%.

ASIA
MSCI’s broadest index of Asia-Pacific shares, outside Japan, slipped almost 2.0% with valuations looking stretched given the index had risen more than 6% just this month.
Japan’s Nikkei fell 1.34%, its sharpest drop since October. Australia down 1.93%, alongside Hong Kong down 1.83%, while Shanghai underperforming the rest of Asia at 2.03%.

Gold futures giving up 0.39% at $1,836.91 with prices falling to their lowest level since Jan. 18.