Dow jumps 300 points | More good news on the vaccine front | Yellen next Treasury secretary?

24/11/2020 U.S. and European equity futures and most Asian stocks are higher this morning after the triggering of a formal transition process to President-elect Joe Biden. The dollar dipped. AstraZeneca Plc became the latest firm to deliver positive vaccine news. Treasury yields extended an advance, gold added to overnight losses and oil gained. Sentiment was also boosted after people familiar with the matter said Biden plans to nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Stocks outperformed in Japan, which reopened after a holiday, and Australia. They fluctuated in Hong Kong and China after a report that senior Trump administration officials are pushing for new hard-line measures against Beijing. Tencent trades flat to slightly higher in HK. The JSE Top 40 futures are indicating a better start, up 300 points or 0.58%, with the Rand firmer +0.36% vs the USD.

Locally the FTSE/JSE Africa All-Share Index closed up 0.9% to 57,147, mostly supported by the Industrial & Property sectors, with Nepi Rockcastle +9%, Multichoice +4.3% and Prosus and Naspers both up over 2% after reporting of results and share buy-back announcement. Gold and Platinum weighed the most, down 5.3% and 2.1% respectively. The Rand was down 0.2% to 15.43 per US$, with the Yield on 10 year govt rand bonds that rose 7.8 bps to 8.901%.
Finance Minister Tito Mboweni gives keynote address at Bloomberg Capital Markets Focus: South Africa at 3pm.

  • South African Banks to See Limited Fallout from Debt Downgrades
  • S. Africa’s Ability to Tame Wage Bill Uncertain, Fitch Says
  • South African Finance Minister Questions Own Airline Bailout
  • S. Africa Central Bank Says It Hasn’t Closed Door on Easing
  • S. Africa Judge Probing Graft Plans Criminal Complaint Over Zuma
  • South Africa’s ANC Looks to Unemployment Fund to Rescue Eskom
  • (PRX NA): Prosus On Hunt for Deals After Cash Reaches $4.3 Billion
  • (VOD SJ): Vodacom Cut by Avior as S. Africans’ Return to Work to Hit Sales
  • (ACCESS NL) Nigeria’s Top Bank Wants to Double Clients With Africa Expansion
  • (PPH SJ) Pepkor Scales Back Africa Expansion to Reflect Pandemic Pain

EARNINGS:

  • Coronation FY NET INCOME 1.39B RAND, +16% Y/Y
    FINAL DIV/SHR 0.20 RAND
    FY ADJ EPS 3.985 RAND VS. 3.419 RAND Y/Y
    FY REV. 3.64B RAND
  • MOMENTUM METROPOLITAN HOLDINGS LIMITED – Operational update for the three months ended 30 September 2020
    New Business Value +3%; TOO EARLY TO GIVE FY EARNINGS GUIDANCE
    1Q NORMALIZED HEADLINE EARNINGS UP 18%
    1Q VALUE OF NEW BUSINESS 13.4B RAND
    ECONOMIC DATA:
  • 9am: (SA) Sept. Leading Indicator, prior 103.5

EU/UK
European stocks were mixed at the end of the day Monday, amid rising hopes that effective coronavirus vaccines will start getting rolled out soon. The pan-European Stoxx 600 closed flat provisionally, with oil and gas stocks bouncing 3.2% to lead gains while telecoms stocks slipped 1%. . Germany’s DAX ended up 0.47%, while France’s CAC gained 1.7%, with London’s FTSE 100 closing up 1.6%. IHS Markit’s flash purchasing manager’s index (PMI) index for the euro zone, which looks at activity in both manufacturing and services sectors, came in at 45.1 in November — the lowest reading in six months. French business activity fell in November on the back of a second lockdown. The composite PMI reading came in at 39.9, down from 47.5 in October, with the 50-mark separating expansion from contraction. Germany’s composite reading was 52.0, down from 55.0 in October. In terms of individual share price movement, German conglomerate Thyssenkrupp climbed 9.5%, while Spanish fuel company Repsol and British engineering firm Rolls-Royce climbed nearly 8%. At the other end of the European blue chip index, Swedish investment firm Latour fell nearly 6%.
US
Stocks rose on Monday after AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data. The Dow Jones Industrial Average closed 327 points higher, or 1.1%, at 29.591. The S&P 500 gained 0.6% to end the day at 3,577, and the Nasdaq Composite advanced 0.2% to 11,880. The Dow hit its session high in the final hour of trading amid news that President-elect Joe Biden plans to nominate former Federal Reserve Chair Janet Yellen for Treasury secretary. The Wall Street Journal first reported the pick. CNBC later confirmed the report through sources. Shares of cruise lines and airlines led the gains on hope distributing these vaccines would reopen the economy and boost travel early next year. Shares of Carnival Corp. added 4.8%, while United Airlines rose 2.6%. Shares of major tech companies struggled, however. Apple dropped nearly 3%, and Netflix slid 2.4%. Facebook, Amazon, Alphabet and Microsoft all posted slight losses.
ASIA
Stocks in Asia-Pacific rose on Monday as investors continued to watch for coronavirus developments. South Korea’s Kospi led gains among the region’s major markets as it gained 1.92% to close at 2,602, with shares of industry heavyweight Samsung Electronics up 4.33%. Mainland Chinese stocks were higher on the day: The Shanghai composite rose 1.09%, while the Shenzhen component gained 0.74%. Hong Kong’s Hang Seng index closed 0.13% higher at 26,486. The S&P/ASX 200 in Australia rose 0.34% to finish its trading day at 6,561. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.84%. Meanwhile, shares of airlines in Hong Kong and Singapore slipped on Monday. In Hong Kong, Cathay Pacific plunged 4.21% while China Eastern Airlines declined 1.15%. Over in Singapore, shares of Singapore Airlines dipped 0.49%. The moves came after an anticipated air travel bubble between Singapore and Hong Kong was delayed for two weeks after Hong Kong saw a recent spike in coronavirus cases. On the economic data front, Singapore’s economy contracted 5.8% in the third quarter, according to the country’s Ministry of Trade and Industry. The economy is now expected to contract by between 6% and 6.5% in 2020 compared to a year ago, and bounce back to growth in 2021, said the ministry. Markets in Japan were closed on Monday for a holiday.
COMMODITIES
Oil extended gains after closing at the highest level since August on signs Covid-19 vaccines could be rolled out within weeks and as the start of the U.S. presidential transition process aided markets in general. Futures in New York rose around 1% after settling above $43 a barrel on Monday.
Gold dropped to the lowest level in four months amid optimism over Covid-19 vaccine developments and the triggering of a formal transition process to President-elect Joe Biden. Spot gold declined as much as 0.9% to $1,821.37 an ounce, the lowest level since July, and traded at $1,825.82 at 11:55 a.m. in Singapore. Silver dropped 0.8%, platinum rose 0.6% and palladium fell 0.6%.
Iron ore futures rebounded to trade near the highest in more than six years amid persistent demand from steel mills in China and lower shipments from Brazil. Iron ore futures in Singapore traded 0.3% higher at $123.91 at 10:28 a.m. after closing 1.7% lower on Monday.