U.S. Equity and European Futures Retreat, Dollar Edges Higher, 700HK to the Moon

18/01/2021 The JSE tracked weaker European and Asian markets on Friday, pulled lower by resources, property and general retailers, as investors assessed the much-anticipated US Covid-19 relief plan and stricter lockdowns amid surging Covid-19 cases in some parts of the world. The markets have the feeling that the US president-elect Joe Biden’s proposed $1.9-trillion stimulus plan could be priced in. The all share lost 0.52% and the top 40 0.49%, with the rand falling along with its emerging-market peers. The U.S markets closed down on Friday but well off the session lows. Tencent is up 2.02 % so this should help NPN/ PRX give the local market some support, IG Top 40 is however trading 169 points lower.
South African power utility Eskom is extending power cuts to Monday after delays in restarting some key generation units.
WHAT TO WATCH:
• South Africa Stocks Slip From Record as Miners Fall Most in a Month.
• South Africa’s Backpedaling on Debt Guarantee Risks State Firms.
• Truworths International Sees 1H HEPS 4%-9% Lower y/y.
• Richemont Upgraded to Buy at HSBC as Cartier ‘Likely to Impress’. PT 94 Swiss francs
• Gold Fields Raised to Overweight at Nedbank CIB; PT 160 rand.
• AB InBev’s S. African Unit Cancels ZAR2.5b of Investment in 2021.
• AngloGold Raised to Hold at Renaissance Capital; PT 400 rand.
• Harmony Raised to Hold at Renaissance Capital; PT 79 rand.
• Gold Fields Raised to Buy at Renaissance Capital; PT 180 rand.
European stocks are expected to start the new trading week flat to lower on Monday, amid a pullback in global markets. London’s FTSE is seen opening 3 points lower at 6,724, Germany’s DAX down 33 points at 13,749, France’s CAC 40 down 7 points at 5,495 and Italy’s FTSE MIB 103 points lower at 22,170, according to IG.
Stocks fell on Friday to close out a tough week as traders weighed President-elect Joe Biden’s $1.9 trillion stimulus plan along with the latest earnings from some of the biggest U.S. banks. The Dow closed 177.26 points lower, or 0.6%, at 30,814.26. Earlier in the day, the Dow was down more than 300 points. The S&P 500 dipped 0.7% to 3,768.25, and the Nasdaq slid 0.9% to end the day at 12,998.50. The Dow and Nasdaq posted weekly declines of 0.9% and 1.5%, respectively, to snap four-week winning streaks. The S&P 500 also lost 1.5% over that time period.
Shares in Asia-Pacific are mixed today as investors in the region reacted to Chinese economic data releases, including the country’s GDP print for the fourth quarter. Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite up 0.7% while the Shenzhen component advanced 1.309%. The Hang Seng index in Hong Kong rose 0.49%. Tencent up 2.02%. The moves came after China reported its GDP rose 2.3% last year as the world fought to contain the coronavirus pandemic. That compared against economists expectations for GDP expansion by just over 2%. Still, retail sales in the country declined, contracting 3.9% for the year.
These are some key events coming up in the week ahead:
• U.S. equity and bond markets are shut today for the Martin Luther King Jr. holiday.
• Earnings come from companies including Bank of America, Morgan Stanley, Procter & Gamble, Intel, and Netflix.
• Joe Biden takes office as U.S. president on Wednesday.
• Policy decisions are due Wednesday from central banks in Brazil, Malaysia and Canada. The Bank of Japan and the ECB deliver decisions Thursday.
Gold has recovered from one and a half month lows earlier today of $ 1805 to be up on the day at $ 1838, Silver fell 0.6% to $24.57 an ounce. Platinum rose 0.4% to $1,078.19, while palladium shed 0.2% to $2,377.49.
Have a good week ahead