11/09/2020 Hey hey it’s Friday.
The JSE had a good day yesterday on better-than-expected production data. The all share and the top 40 gained 1.35% and 1.22%, respectively, with most major indices up on the day, miners were the biggest winners after data showed that the contraction in SA mining production eased as the global demand picked up, while manufacturing data also improved. Data from Stats SA yesterday showed that the contraction in mining production decelerated significantly to 9.1% year on year in July, from 27.2% in June, as global demand for commodities picked up in line with the easing of coronavirus-linked restrictions in key economies.
We should be in for a mixed start this morning as the US reversed early gains to close lower with Tech stocks leading the way again. Asia has reversed earlier losses and now most markets are trading in the green, Tencent is up 1.48% and US futures are up, Dow future + 200 and S&P + 17 points respectively.
• South Africa’s record economic contraction in the second quarter means gross domestic product could shrink more than the government’s forecast of 7.2% this year, according to the cabinet.
• Bidvest Sees FY HEPS From Cont Ops 59%-61% Lower y/y.
European stocks closed lower yesterday after the European Central Bank held interest rates steady and said it expected the euro zone to suffer a smaller recession than it had feared. The central bank also said its baseline scenario for the euro zone was for GDP to contract 8% this year, a modest improvement on the 8.7% contraction it had projected in June. However, the recovery is likely to be slower than initially forecast and inflation is still anticipated to undershoot the bank’s target for years to come. FTSE – 0.16%, CAC – 0.38% and DAX – 0.21%
Overnight the US markets moved quickly from early gains to all close lower, the sell-off was once again led by the big tech names. The Dow closed down 405 points, the S&P was 59 points lower and the Nasdaq 221 points or 1.99%. Last night’s declines put the S&P 500 down more than 2% for the week along with the Dow. The Nasdaq, meanwhile, has dropped 3.5% week to date. Another one-week decline would mark the S&P 500′s first back-to-back weekly drop since May. The broader market index was also on pace for its worst week since June 26, when it slid 2.9%. Futures this morning are higher as the market will look ahead to the CPI reading later today.
Asian markets reversed earlier losses with Chinese mainland, Hong Kong and Japan all now positive, Australia fell 0.74% led by miners, Rio Tinto was down 0.8% after it announced its chief executive will be stepping down “by mutual agreement.” That came following a board-led review over the legal destruction of historically significant Aboriginal rockshelters, according to Reuters. Other major miners saw larger downward moves, with Fortescue Metals Group down about 3.2% while BHP fell 1.24%. Overall, the MSCI Asia ex-Japan index dipped 0.16%.
Oil prices are lower as U.S. crude inventories rose 2.0 million barrels, compared with forecasts for a 1.3 million-barrel decrease in a Reuters poll. Increasing stockpiles are likely to be a subject at a meeting on September 17 of OPEC+. Brent – 0.50% $ 39.87 and WTI – 0.38% $ 37.16.
Gold is down 0.17% to $1942/oz while platinum is flat at $ 930 and Palladium down 0.53% at $ 2288.
Have a great day and even a better weekend.