Global Stocks Rise to Record High; Dollar Slips

21/01/2021 Global stocks climbed to another all-time high Thursday on optimism that U.S. fiscal spending will revive economic growth and bolster corporate earnings. The dollar weakened. Asian shares rose for a third session as Chinese stocks outperformed and Hong Kong’s Hang Seng index hit 30,000 points for the first time since May 2019. U.S. futures are higher after the S&P 500 posted its best first-day reaction to a presidential inauguration since at least 1937. The tech-heavy Nasdaq 100 Index jumped more than 2%. Netflix Inc and ASML Holding NV were among companies that gained on solid results. Treasuries were little changed.

Locally, the JSE closed at another record high, tracking firmer global markets as US treasury secretary nominee Janet Yellen advocated for a large fiscal relief package to help the US economy deal with the effects of the Covid-19 pandemic. The All Share closed up 0.78% at 64108, OMU led the Top 40gains up 5.39%. Tencent is up 1.69 % and the IG Top 40 is 379 points.
South Africa’s central bank is due to announce its interest rate decision this afternoon, all but one of the 17 economists in a Bloomberg survey expect policymakers to hold the key rate at a record low of 3.5%

NEWS:

• South African Study Into Virus Strain Raises Vaccine Fears.
• S. African Wealth Tax Could Raise $10.7 Billion, Study Shows.
• South African Annual Inflation at 16-Year Low in 2020.
• South African Bonds Back in Favour as Real Yield Outweighs Risks.
• Anglo Gets 5 Concessions for Base Metal Exploration in Angola.
• Sibanye FY PGM Output From South Africa Ops Exceeds Guidance.
• Watch Swatch, LVMH, Pandora After Richemont 3Q Sales Beat.
• South African Drinks Maker Distell Buys Into Cannabis Brand.
• MASSMART FY TOTAL SALES 86.5B RAND, A 7.7% DECREASE Y/Y

ECONOMIC DATA:

11am: Nov. retail sales MoM, est. 1.0%, prior -0.2%
11am: Nov. retail sales constant YoY, est. -2.6%, prior -1.8%

European stocks are expected to open higher Thursday amid optimism as President Joe Biden takes office. London’s FTSE is seen opening 39 points higher at 6,772, Germany’s DAX up 60 points at 13,971, France’s CAC 40 up 23 points at 5,648 and Italy’s FTSE MIB up 99 points at 22,689, according to IG.

U.S. equities rose to record highs overnight after the latest batch of strong corporate earnings rolled in and Joe Biden was sworn in as commander in chief. The Dow rose more than 250 points to close at a record. Microsoft had the most positive impact on the Dow, adding 52 points to the index. The S&P 500 climbed 1.4%, notching an all-time high, the Nasdaq surged nearly 2%, closing at a record. The technology heavy index was helped by a 16% jump in Netflix’s stock on the back of the streaming giants strong earnings and subscriber results. The small cap benchmark Russell 2000 popped 0.44%. Earnings season continues today with Baker Hughes, Union Pacific and Citrix reporting before the bell. Intel, IBM and CSX report after the closing bell.

Markets in Asia are up across the region, the Bank of Japan kept monetary policy steady. In a widely expected decision, the Japanese central bank kept its target for short-term interest rates at -0.1% and that for 10-year government bond yields at around 0%. The Nikkei is up 0.82%. Australia’s unemployment rate came in at 6.6% in December, according to seasonally adjusted estimates released by the country’s Bureau of Statistics on Thursday. That compared against expectations for a 6.7% reading in a Reuters poll, and followed November’s unemployment rate 6.8%,the ASX 200 is up 0.79%

Gold eased off a two week high after prices jumped in the previous session on hopes of a massive U.S. stimulus package under the new Joe Biden administration and dollar weakness. Gold is trading at $ 1873, Silver shed 0.2% to $25.75 an ounce. Platinum eased 0.5% to $1,103.51, while palladium gained 0.3% to $2,379.28.