16/09/2020 World markets will look to the FED later today for further direction, it’s been a good start to the week with positive vaccine news and bounce back in Tech names. The JSE all share lost 0.35% and the top 40 0.35%, with most indices falling on the day. Local focus will shift to the SA Reserve Bank’s policy meeting this week. The local currency gained more than 1% in intra-day trade, breaking below the R16.50/$ for the first time since July as risk-on sentiment took hold following weeks of range-bound trading. IG Markets have us just 75 points helped by Tencent up 1.04%.
South Africa’s government, business and labour groups said they have agreed on a way to turn debt-stricken state power utility Eskom around and increase electricity output to address rolling blackouts.
• COVID-19: South Africa’s recovery rate now at 89.5%.
• Bidvest Cut to Hold at Investec; PT 165 rand.
• South Africa’s ANC Stalls Plan to Nationalize Central Bank
1pm: July Retail Sales Constant YoY, est. -5%, prior -7.5%
1pm: July Retail Sales MoM, est. 3.25%, prior 6.4%
European markets are set to open flat to mixed later as investors await the outcome of a two-day meeting of the U.S. Federal Reserve’s Federal Open Market Committee (FOMC). London’s FTSE is seen opening 37 points lower at 6,082, Germany’s DAX up 7 points at 13,227, France’s CAC 40 down 2 points at 5,066 and Italy’s FTSE MIB down 19 points at 19,907, according to IG.
Overnight the Dow gave up a 200 point gain as Apple shares came off their highs following the tech giant’s new product range, the Dow closed just 2 points higher. The S&P 500 climbed 0.5%, despite weakness in financials. Tuesday marked the third straight day of gains for the 500-stock index. Technology stocks continued their broad based rally. The Nasdaq Composite rose 1.2%, bringing its week to date gain to more than 3%. The technology heavy index dipped in correction territory last week and suffered its worst weekly performance since March. All market will be waiting for the FED later today and August retails sales data at 14:30 local time.
Markets in Asia are mixed this morning as investors await the Federal Open Market Committee’s quarterly update. In Japan, the Nikkei 225 is 0.07% higher in afternoon trade while the Topix index advanced 0.26%. The moves came after provisional trade statistics from Japan’s Ministry of Finance released earlier showed the country’s exports in August falling 14.8% as compared to a year ago. That compared against a 16.1% drop expected by economists in a Reuters poll. Mainland Chinese stocks, on the other hand, saw losses by the afternoon. The Shanghai composite declined 0.24% while the Shenzhen component shed 0.868%, the Hang Seng slipped 0.24%, 700HK + 1.04%. Meanwhile, South Korea’s Kospi added 0.2%. Over in Australia, the S&P/ASX 200 advanced 1.01%. Overall, the MSCI Asia ex-Japan index rose 0.52%.
Oil prices have popped, extending gains from the previous session, as a hurricane disrupted U.S. offshore oil and gas production and an industry report showed a big drop in U.S. crude stockpiles. More than 25% of U.S. offshore oil and gas output was shut and export ports were closed on Tuesday as Hurricane Sally sat just off the U.S. Gulf Coast. Brent + 1.43% $ 41.11, WTI + 1.65% $ 38.91.
Gold is a tad softer coming off a two week high as the dollar steadies ahead of the Fed update later today. Gold $ 1958, platinum is flat at $971 and palladium slipped 0.9% to $2,388.29.
Have a great day.