18/08/2021 Asian stocks rose today and U.S. equity futures are higher as investors assess the economic recovery and risks from the resurgent coronavirus. MSCI Inc.’s gauge of Asia-Pacific shares was on course to snap a four-day losing streak, with Japan, China and Hong Kong posting gains. The virus and worries that economic growth is peaking are among the risks for global stocks after a 90% climb from last year’s pandemic lows. The Jackson Hole symposium next week the Fed’s most-prominent annual conference may offer clues on when and how the central bank will taper bond purchases. We also have FOMC minutes later today.
Locally, the JSE had a record blow-out day, R 156.9 billion traded on the day as the MSCi rebalance dominated the closing auction. Naspers and PRX accounted for R 115 bln of the days trades. It was a solid performance by the market considering NPN closed down 8.08%, the All Share ended up 0.17% at 68939. BHP led the gainers after reporting numbers and announcing a record dividend, the share was up as much as 10% in early trade but closed 4.69% higher. However, BHP is under pressure this morning in Oz trading down 6.6% after reporting on their website that they see an increasing likelihood of “stern cuts” to China’s steel output this year. Iron-Ore has lost almost 30% from May highs, China’s steel industry is under pressure after pledging to reduce output this year, a goal that requires huge second-half curbs to offset booming output earlier in 2021. Production in July was more than 8% lower year-on-year, data on Monday showed.
• South African inflation is expected to have been 4.7% in July, according to a median of economist estimates in a Bloomberg survey, down from 4.9% the previous month.
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• 10am: July CPI MoM, est. 1.1%, prior 0.2%
• 1pm: June South Africa Retail Sales Co, est. -0.5%, prior 2.1%
• 1pm: June Retail Sales Constant YoY, est. 9.5%, prior 15.8%
European markets are set to open slightly higher on Wednesday, as investors monitor inflation data and look ahead to the minutes from the Federal Reserve’s latest meeting. Market participants will be looking to economic data. U.K. inflation rate data for July is scheduled at 7 a.m. London time, with euro area inflation rate figures for last month expected later in the session.
Overnight, Wall Street fell after retail sales came in below expectations and valuations had become increasingly stretched. The Dow lost 282 points, dragged down by a 4.3% drop in Home Depot’s stock. The average had its first negative day in 5. The S&P 500 also slipped 0.7% for its worst day since July 19. The Nasdaq was the relative underperformer, dropping 0.9% as Facebook, Amazon, Apple and Google-parent Alphabet all closed lower. The Census Bureau said Tuesday that retail sales fell 1.1% in June, driven largely by a drop in car sales. Economists expected retail sales to fall by 0.3% in July, compared to a revised 0.7% gain in June, according to Dow Jones consensus forecast.
In Asia, equities rise slightly despite Wall Street’s overnight declines, while New Zealand’s central bank defies expectations by not raising interest rates as the country is in lockdown due to cases of the Covid-19 Delta variant. All major indices are up with the Hang Seng up 0.89% and Tencent up 0.32%. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.6% higher.
Gold prices are slightly firmer as the precious metal was caught between a firmer dollar and safe-haven demand driven by the delta coronavirus variant fears. Traders are also looking ahead to FOMC minutes out later, Gold + 0.24% $ 1790, Platinum + 1.31% $ 1012 and Palladium + 1.72% $ 2534.
Oil prices have rallied slightly snapping five days of declines but investors stay wary about prospects for stronger fuel demand as the use of rail, air and other forms of transport remained constrained amid surging Covid-19 cases worldwide. Crude and gasoline inventories in the United States are expected to have fallen last week, while distillate stockpiles are likely to have risen for a third straight week, an extended Reuters poll showed. Brent + 0.33 % $ 69.24, WTI + 0.30% $ 66.82