Dow rallies 400 points | Tech claws back some losses | Tesla jumps nearly 11%

10/09/2020

The rebound in global stocks eased this morning as investors weighed whether a recovery in technology shares could overcome lingering concern about valuations. The dollar steadied after declines. U.S. and European futures edged lower, while equities in Asia retreated from session highs. Tencent trades 2.3% higher in HK, with the JSE Top 40 futures indicating a slightly higher start, up 88 points, or 0.16%.

Locally the FTSE/JSE Africa All-Share Index closed up 1.4% at 55,211, spurred by a turnaround in global stocks and a stronger Rand that supported SA Inc’s with the bank and retailers that gained the most, up 7.7% and 6.7% respectively. The Yield on 10 year govt rand bonds rose 2.0 bps to 9.275%.

Mining and manufacturing production data for July is due to be released, with economists expecting a 20% and 14% year-on-year decline respectively, according to a Bloomberg poll.

  • 9am: Inquiry into state corruption continues in Johannesburg
  • 9am: Government officials brief lawmakers on state of municipal finances
  • 10am: Health labor-union holds briefing about planned strike
  • (FSR SJ): South Africa Stocks Ride Currency Boost as FirstRand Leads Rally
  • (APN SJ): Aspen Skips Dividend Even as Pharma Demand Shows Resilience

EARNINGS:
* 8am: FirstRand, FY (FSR SJ)
* 7am: Sanlam, 1H (SLM SJ)

ECONOMIC DATA
* 11am: 2Q Current Account as a % GDP, est. -0.35%, prior 1.3%
* 11am: 2Q Current Account Balance, est. 3.1b, prior 69.7b
* 11:30am: July Mining Production YoY, est. -19.75%, prior -28.2%
* 11:30am: July Mining Production MoM, est. 1.1%, prior -1.4%
* 11:30am: July Platinum Production YoY, prior -42.5%
* 11:30am: July Gold Production YoY, prior -17.0%
* 1pm: July Manufacturing Prod NSA YoY, est. -13.8%, prior -16.3%
* 1pm: July Manufacturing Prod SA MoM, est. 3.75%, prior 16.8%

EU/UK

European stocks closed higher yesterday as investors looked to shrug off a technology-led rout earlier in the week that put pressure on financial markets around the world. The pan-European Stoxx 600 closed up 1.6%, with the tech and telecoms sectors both jumping over 2%. Travel and leisure shares bucked the trend, falling over 0.8% as coronavirus containment measures return. London’s FTSE100 ended the session up 1.3%, with Paris’ CAC-40 gaining 1.4% at the close, while the German DAX saw the session out 2.07% higher. Scor jumped 11% after the French reinsurer confirmed a new strategic plan, while Sweden’s Loomis saw its shares climb 5% after launching “Loomis Pay,” a payments product. Swedish Orphan Biovitrium and Old Mutual added more than 7%. At the other end of the European blue chip index, Tui and Carnival fell 5% and 6% respectively amid a broad decline for travel stocks. The ECB is expected to hold rates steady later today, but indicate that downside risks have intensified, suggesting further easing is possible before year-end.

US

Stocks ripped higher last night as tech shares posted their best day in about four months, clawing back some of the steep losses that knocked the S&P 500 and Nasdaq Composite back below their record highs. The Dow closed 439 points higher, or 1.6%, at 27,940. The S&P 500 jumped 2% to 3,398 and the Nasdaq advanced 2.7% to 11,141. It was the S&P 500′s best day since June 5, when it popped 2.6%. The Nasdaq had its biggest one-day gain since April 29, when it surged 3.6%. Shares of Tesla, which had their single worst day ever on Tuesday dropping 21%, ended Wednesday’s session up more than 10% after a late-day surge. Apple, which lost more than 6% in the previous session, was up by 4%. Those two stocks, along with Microsoft, Amazon, Alphabet and Facebook, lost $1 trillion in market value over the last three days. All six rebounded yesterday. The U.S. releases initial jobless claims numbers later today.

ASIA

Equities in Japan and China retreated from session highs, with stocks in Hong Kong fluctuating. The Nikkei is up 0.88%, the Hang Seng up a marginal 0.17% (Tencent +2.3%) with the Shanghai flat. In OZ the ASX 200 put on 0.51% with the Metals & Mining Index up 1.09%.

COMMODITIES

West Texas Intermediate crude fell 0.7% to $37.79 a barrel, currently improving slightly lat at $38.12, with Gold that’s steady at $1,946.61 an ounce, little changed.

Wishing You All A Good Day Ahead