12/01/2021 Asian stocks followed a rebound in the U.S. after Federal Reserve Chair Jerome Powell reassured investors the central bank will tackle inflation to extend the economic expansion. Powell told the Senate Banking Committee that officials won’t hesitate to act if needed to contain price pressures. He also said the Fed will probably start shrinking its balance sheet this year. He noted the runoff would be quicker than the last time the central bank shrank its balance sheet because the economy was in a much stronger position. Shares in Japan and Hong Kong led gains throughout the region. The Hang Seng Tech Index advanced to the highest in almost a month, tracking overnight gains in U.S.-listed China tech names. Chinese shares edged higher after inflation came in lower than expected, adding to rate cut calls.
On the local front:
The JSE Top 40 gained 0.19% as precious metal mining stocks led the gains with SSW, IMP and NPH up 7.12, 6.14 and 4.58 percent respectively. The Rand rallied one percent against the $ to trade at R 15.51/$. We should see continued strength as the US bounced hard after Fed Reserve Chair Jerome Powell spoke, Asia is up across the region and Tencent is up 3.32%. IG Top 40 + 953 points.
• Tongaat Targets Four Ex-Managers for Almost Half a Billion Rand
• South Africa Charges Parliament-Fire Suspect With Terrorism
• Kumba Iron Ore Gains After Rival Vale Halts Some Mine Production
• Business Day: Vodacom joins MTN in opposing Telkom’s urgent interdict against Icasa
• Business Day: State considers special court to fast track corruption cases
• Fin24: Steinhoff on a roll: Its share price doubled since last month on good news streak
European stocks climbed yesterday as investors look ahead to the next U.S. inflation reading on Wednesday and monitor comments from the U.S. Federal Reserve. The pan-European Stoxx 600 closed up 0.8%, partly recouping Monday’s 1.8% decline. Tech stocks added 1.9% to lead gains as investor fears over higher interest rates appeared to cool slightly.
Stock futures are flattish after a rally on Wall Street saw investors buying the dip following a five-day sell-off in the S&P 500. The overnight session followed a rebound in the market with the tech-heavy Nasdaq Composite gaining more than 1% for a second straight day of gains. The S&P 500 rose 0.9%, snapping a five-day slide, while the Dow rallied 502 points off it’s early lows to close up 180 points. Investors are awaiting todays key inflation data to assess the economic picture and the Fed’s next move. Economists expect the consumer price index rose 0.4% in December, and 7% on a year-over-year basis, according to Dow Jones.
Oil has held onto yesterday’s gains, supported by tight supply and expectations that rising coronavirus cases and the spread of the Omicron variant will not derail a global demand recovery. Brent $ 83.64, WTI $ 81.28.
Gold prices climbed 1% overnight as the dollar slipped after U.S. Federal Reserve Chair Jerome Powell’s testimony before Congress did not spring any surprises in terms of monetary tightening, while a retreat in bond yields also lent support. Gold Spot $ 1818.34, Platinum $ 971.69 and Palladium $ 1921.97
Some key events this week:
• EIA crude oil inventory report on Wednesday.
• China PPI, CPI on Wednesday.
• U.S. CPI, Fed Beige Book on Wednesday.
• U.S. initial jobless claims, PPI on Thursday.
• U.S. Senate Banking Committee hearing for Lael Brainard, nominated as Fed vice-chair on Thursday.
• Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker,
• Chicago Fed President Charles Evans speak on Thursday.
• Bank of Korea policy decision and briefing on Friday.
• Wells Fargo, Citigroup, JPMorgan due to report earnings on Friday.
• U.S. business inventories, industrial production, University of Michigan consumer sentiment, retail sales on Friday.
• New York Fed President John Williams speaks Friday