Asian Stocks Fluctuate, U.S. Futures Lower; Dollar Climbs

17/05/2021 Asian stocks fluctuated Monday amid some spikes in Covid-19 cases and U.S. equity futures edged lower as inflation concerns weighed further on investor sentiment. The dollar ticked higher. Chinese stocks outperformed, shrugging off below-forecast economic readings. While European equity futures were in the green, U.S. contracts fell after Wall Street closed out a bruising week with a rally Friday. Japan retreated and Taiwan — one of the economies dealing with a virus flareup — tumbled. The spread of the virus is front and center again in Asia as vaccinations lag the largest developed nations. Singapore will stop most school classes this week and Taiwan is racing to contain its worst outbreak. In contrast, the rolling one-week average of new U.S. cases fell to the lowest since June. Treasury yields extended declines from Friday on a report that showed the recent surge in U.S. retail sales stalled in April. Most commodities opened the week on a steadier footing after last week’s volatility. Bitcoin traded below $44,000 after whipsawing over the weekend amid more comments from billionaire Elon Musk. Concerns that policy makers will have to pull back support sooner than expected to quell rising inflation have weighed on global equities. Investors this week will parse the minutes from the Federal Open Market Committee’s latest meeting for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases. Tencent trades 3.1% higher in HK. The JSE Top 40 futures are indicating a better start, up 450 points or 0.75%, with the Rand that remains steady at 14.12 vs the USD.
Here are some key events this week:

  • Reserve Bank of Australia publishes minutes of its latest meeting Tuesday
  • Fed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic are among policy makers speaking this week
  • The Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation
    The FTSE/JSE Africa All-Share Index closed up 0.6% to 66,598, mostly supported by the retail sector that closed the session up 2.67%, with Mr Price leading the way, gaining 3.87%. Precious Metals & Mining, Financials and the property sectors were all better as well, surging 1.8%, 1.49% and 1.41% respectively. The Rand was little changed at 14.12 per US$, with the Yield on 10-year govt rand bonds that fell 5.00 bps to 9.11%.
    South Africa is scheduled to begin the second phase of its coronavirus-vaccine program, with the start of inoculations for people over the age of 60.
  • NEWS
  • South Africa’s Eskom to Implement Power Cuts After Plants Fail
  • Money Managers Say It’s Time to Get Picky in Emerging Markets
  • S. African REITs Rise Amid Recovery, But Sector Still Depressed
  • Astral Foods Cut to Hold at Afrifocus Securities; PT 148.92 rand
  • Vodacom Projected to Increase Dividend This Week
  • Business Day: Gauteng and Western Cape release lists of sites for phase 2 of Covid-19 vaccinations
  • Fin24: SAA needs to start flying soon to stave off competitors, interim CEO tells Parliament


  • Astral Foods Ltd. (ARL SJ)


  • Ruling African National Congress officials are scheduled to meet to discuss the status of suspended Secretary-General Ace Magashule
  • Former President Jacob Zuma is scheduled to appear in court on corruption charges
  • Judicial inquiry into state corruption continues in Johannesburg


  • Business Unity South Africa and Business Leadership South Africa release a report on localization
  • Earnings Calls: ARL SJ

European shares continued a sharp rebound on Friday, alongside other global markets, following a sell-off in stocks at the start of trading week. The pan-European Stoxx 600 closed higher by 1.2%, with autos adding 1.9% to lead gains while basic resources was the only sector in the red, shedding 1%. U.K. Prime Minister Boris Johnson has said his government is concerned about the increased transmissibility of the new Covid-19 variant first detected in India, and indicated that nothing can be ruled out in potential efforts to curtail it. In corporate news, UniCredit’s largest shareholder BlackRock voted against the remuneration package for the Italian lender’s CEO Andrea Orcel last month, Reuters reported. The package turned Orcel into one of Europe’s highest-paid bank bosses. Italian infrastructure group Atlantia reported a first-quarter net loss and confirmed that it would make a decision on the sale of a majority stake in its motorway unit by June 11. In terms of individual share price movement, Man Group gained 4.9% to lead the Stoxx 600 after Credit Suisse raised its price target. Commerzbank led a broad rally for banks, climbing 3.7% after price target raises from Independent Research and Morgan Stanley. At the bottom of the European blue chip index, Luxembourg’s InPost and Sweden’s Nibe Industrier both fell by around 3%.
U.S. stocks jumped on Friday led by technology shares and reopening trades, as Wall Street rebounded for a second day from steep losses earlier this week. The Dow Jones Industrial Average climbed 360.68 points, or nearly 1.1%, to 34,382.13. The S&P 500 gained 1.5% to 4,173.85. The tech-heavy Nasdaq Composite, the relative underperformer for the week, snapped back by 2.3% to 13,429.98. The major averages experienced a roller-coaster week that saw the blue-chip Dow drop nearly 1,200 points from Monday to Wednesday. The S&P 500 and the Nasdaq fell 4% and 5%, respectively, during that period. The indexes have since rebounded from the steep sell-off, but they still posted modest losses for the week as inflation fears hit sentiment. The Dow and the S&P 500 fell more than 1% each this week, while tech stocks got hit especially hard, pulling the Nasdaq down over 2.3% for the week. Tech stocks were the biggest outperformers Friday. Tesla gained more than 3%. Facebook jumped 3.5%, while Alphabet and Microsoft rose more than 2%. Apple, Amazon and Netflix also all climbed over 1%. Disney shares were bucking the trend. The company, which posted weaker-than-expected revenue and streaming subscribers, closed down 2.6%. Stocks most exposed to the ongoing recovery jumped again Friday after the Centers for Disease Control and Prevention eased guidelines, saying that in most settings fully vaccinated people don’t need to wear masks indoors or outdoors.
Shares in Asia-Pacific were mixed in Monday trade as investors reacted to the release of Chinese economic data while also monitoring the Covid situation in places such as Taiwan, which has seen a recent spike in domestic infections. The Taiex in Taiwan fell more than 3% as it led losses among the region’s major markets. Elsewhere, mainland Chinese stocks were higher, with the Shanghai composite up about 1% while the Shenzhen component surged 2.18%. The moves came following the release of a slew of Chinese economic data. China’s industrial output rose 9.8% year-on-year in April, according to data released Monday by the country’s National Bureau of Statistics. That figure was in line with expectations from a Reuters poll. Official data also showed retail sales in China jumping 17.7% year-on-year in April. That, however, fell short of expectations in a Reuters poll for a 24.9% increase. In Japan, the Nikkei 225 dipped 1.27% in afternoon trade while the Topix index shed 0.39%. South Korea’s Kospi edged 0.79% lower. Over in Australia, the S&P/ASX 200 gained 0.31%. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.11% lower.
Gold climbed to the highest in more than three months as bond yields dropped and U.S. retail stalled, while parts of Asia grappled with a spike in coronavirus cases. Spot gold rose as much as 0.5% to $1,853 an ounce, the
highest since Feb. 10. Silver, platinum and palladium all gained.
Oil was steady after posting a third weekly gain as a demand recovery in key regions raised optimism about rising fuel consumption, despite a Covid-19 flare-up in parts of Asia. Futures in New York traded near $65 a barrel after advancing 2.4% on Friday.
Copper rebounded after its first weekly loss in six on concerns about disruptions to supply in Chile and as Chinese demand showed signs of picking up. Copper rose as much as 1.1% to $10,350 a metric ton on the
London Metal Exchange before trading at $10,306.50 as of 11:37 a.m. in Shanghai. The metal hit $10,747.50 on May 10, an all- time high. Other metals were mostly higher with aluminum up 0.9% and nickel climbing 1.3%.
Iron ore futures climbed back above $200 a ton as soaring steel production in China showed there’s no sign of the industry cooling despite government attempts to rein in output from last year’s record of over 1 billion tons. Crude steel output in April rose to 97.9 million tons to hit monthly and daily run-rate records. The robust pace of production also lifted the year-to-date tally to 375 million tons, a 16% jump compared to same period last year. This comes
as iron ore stockpiles at Chinese ports declined for the third week, indicating strength in demand.