Global Stock Rally Stalls a Tad in Asia

27/08/2020 The rally that pushed global equities to a record stalled today ahead of Federal Reserve Chair Jerome Powell’s speech on a monetary policy framework review. Asian stocks are mixed, with Japan, South Korea and Hong Kong declining, while China posted modest gains and Australia outperformed. U.S. futures dipped while Europe’s were flat. A surge in technology shares earlier pushed the S&P 500 index and the Nasdaq Composite to fresh highs for a fourth straight day.
Oil remained near a five-month high ahead of expected disruption from Hurricane Laura, which is set to slam ashore this morning. U.S.-China tensions over the South China Sea escalated on Wednesday with Beijing firing four missiles into the disputed waterway and the Trump administration strengthening action against companies that helped set up outposts in the region.

On the local front, the JSE Allshare closed up 0.82% on the back of a sell-off in the Rand, the ZAR lost 1.2% through the session. Bidcorp led the gainers up 12.93% after posting numbers yesterday been raised to a new buy at Investec with a PT of R 310.00.ned NED was the biggest loser after 1H numbers which saw earning squeezed slowdown and cost of risk. President Cyril Ramaphosa is scheduled to appear in parliament to answer questions from lawmakers on issues ranging from government debt to youth unemployment. 700HK -1.02%, Top40 Sept + 64 points

• Distell Full Year Net Income 312.3 Mln Rand
• Massmart First Half Net Loss 1.16 Bln Rand, +39% Y/y
• Sibanye Stillwater (SSW SJ) 1pm


11:30am: July PPI YoY, est. 1.3%, prior 0.5%
11:30am: July PPI MoM, est. 0.75%, prior 0.5%
Overnight a tech-led rally led the S&P 500 up 1% to 3,478.73 while the Nasdaq popped 1.7% to finish the day at 11,665.06, the DOW was 83 points higher, Futures this morning are a little softer as market wait for Fed Chair Jerome Powell later today 15.30 local time. Some of the nation’s largest technology and consumer communications companies were responsible for the spike over-night, with blowout earnings from Salesforce sending its stock up 26%. Facebook and Netflix jumped 8.2% and 11.6%, respectively, while Apple added 1.4%, Amazon advanced 2.8% and Microsoft climbed 2.1%. Wednesday’s gains put the S&P 500 up more than 58% since hitting an intraday low on March 23. The Nasdaq has soared by 75% in that time period.

Investors will also pore through the government’s latest report on jobless claims at 15.30 local time today. Economists polled by Dow Jones expect some 1 million workers filed initial claims last week. That would be a deceleration from the prior week’s print of 1.1 million first-time claims.
Asia markets are mixed in thin volume ahead of Jerome Powell’s speech, data earlier today showed that profits in China’s industrial sector grew 19.6% from last year, an increase from the 11.5% gain in June, as the country’s recovery from the pandemic continues. Stocks in mainland China rose by late morning. The Shanghai composite was up 0.29%, while the Shenzhen composite jumped 0.83%. The Shenzhen component rose 0.63%. The Hang Seng is 0.88% lower with Tencent down 1.02%, the ASX200 is 0.16% higher with Aussie Miners up 1.46%. RIO + 0.78%, BHP + 1.13%.
Oil is little changed as the market waits for the arrival of Hurricane Laura expected to hit the US later today, the threat from Hurricane Laura pushed the market higher earlier in the week, but the storm is not expected to affect supplies much because oil and product inventories remain high due to the coronavirus pandemic’s hit to fuel demand. U.S. crude inventories stood at 507.8 million barrels at the end of the week to Aug. 21, even after a larger-than-expected drop of 4.7 million barrels. Laura intensified on Wednesday and is now forecast to bring heavy rains and catastrophic, 150 mile-per-hour (240 kph) winds that will drive ocean waters up to 40 miles (64 km) inland. Oil producers on Tuesday shut 1.56 million barrels per day of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities. Nine refineries that convert nearly 2.9 million bpd of oil into fuel, or about 15% of U.S. processing capacity, were also shutting down. Brent $ 45.79, WTI $ 43.42.
Gold has fallen sharply today after yesterdays $ 26 surge pulling back to $ 1939 with support seen around the $ 1935 level. Like everything else the market will wait for the Fed Chair for the next move. Elsewhere, silver dropped 1.9% to $27.01 per ounce and palladium fell 0.8% to $2,180.42, while platinum edged 0.1% higher to $929.29.
Have a great day.