S&P 500 moves just 60 points shy of Feb record

06/08/2020 The JSE gained for a third successive day yesterday as hope for more stimulus aided global equities, while gold miners had their best day in more than a week as the gold price reached a record high after sailing through $2,000/oz for the first time on Tuesday. The JSE AllShare closed up 2.61% at 57629, the ZAR remains under pressure but off Tuesdays lows at 17.32/$ and 22.75/GBP. We look set for a lower open this morning as Asia trades softer on more signs of tension with U.S.-China relations and ongoing negotiations on an American stimulus package. The dollar dipped toward its lowest in almost two years.( not helping the Rand). MTN reported this morning in-line with guidance with 1H Adjusted EPS at R 4.30 vs R 1.95 y/y, guidance was R 4.19 to R 4.39. IG Markets Top 40 – 200 points. 700HK -2.33%

The planned business rescue of South African Airways is in limbo because government attempts to raise 5.3 billion rand of immediate funding from commercial banks failed to elicit a response.

• South African Business Leaders Fret Over Post-Virus Revival.
• South Africa Risks $742 Million in Investments on Booze Ban.
• Rand-Hedges Cushion S. African Investors from Macro Gloom.
• MTN Said to Plan Sale of Up to $243 Million Stake in Jumia

ECONOMIC DATA:

1pm: June electricity production y/y, prior -13.2%; June electricity consumption y/y, prior -13.6%.
European stocks closed higher on Wednesday as investors digested another round of major corporate earnings reports, but weaker-than-expected euro zone economic data capped gains. The pan-European Stoxx 600 closed up by 0.5%, paring earlier gains after July’s final euro zone PMI reading came in at a modest 56.5, with the bloc’s dominant services sector showing a weaker rebound than expected. FTSE + 1.14%, CAC +0.9%, DAX + 0.47%.
Overnigh in the US major indexes brushed off a weaker-than-expected private payrolls report, the Dow rose some 370 points, the S&P 500 rose 21 points to be within just 60 points of the February high and the Nasdaq had its 31st record close for 2020. The latest U.S. economic data was mixed, with payroll gains slowing sharply in July, suggesting the pickup in coronavirus cases is putting the brakes on the job market. Meanwhile, service industries expanded in July at the fastest pace since February 2019. Later today Dallas Fed President Robert Kaplan discusses the U.S. economy and tomorrow the markets looks to the July U.S. jobs reports. Futures this morning are slightly up with Dow Futures + 64 points and S&P 500 + 3 points.

A rally in Asian stocks faltered today as investors weighed more signs of tension with U.S.-China relations and ongoing negotiations on an American stimulus package. On Wednesday, U.S. Secretary of State Mike Pompeo said that President Donald Trump’s administration wants to ban “untrusted” Chinese apps such as TikTok and WeChat from U.S. app stores. That development followed tensions between Washington and Beijing heating up in recent weeks. The ASX 200 is up 0.44% with the Mining Indez up 2.44%. Chinese mainland trades lower and the Hang Seng is down 1.5% with Tencent down 2.23%.
Gold holds steady at record highs as a weaker U.S. dollar and hopes of more stimulus measures to mitigate the economic fallout from the pandemic underpinned the metal’s safe-haven appeal. Gold spot is at $ 2045 an ounce, Silver fell 0.4% to $26.91 per ounce, while platinum rose 0.4% to $970.67 and palladium was steady at $2,181.77.
Oil prices are a tad higher but struggling to hold onto five-month highs reached in the previous session, as fuel demand worries caused by a second wave of coronavirus infections outweighed declines in the U.S. dollar. Investors remain wary of rising U.S. refined product inventories at a time when U.S. central bankers said the resurgence in cases was slowing the economic recovery in the world’s biggest oil consumer. EIA data showed distillate stockpiles, which include diesel and heating oil, climbed to a 38-year-high, and gasoline inventories unexpectedly rose for a second week in a row. Brent $ 45.38, WTI $ 42.38.