Dow tops 30K for the first time | Small-cap stocks headed for best month ever | US Presidential transition under way

25/11/2020 Global equities are on course for the best month on record as a rally picked up steam and cash continued to flow into cyclical sectors. The dollar held a decline. Asia-Pacific shares are up this morning, with energy and financial stocks leading the advance, though gains fizzled in China and South Korea. S&P 500 futures are coming off earlier highs after the benchmark index closed at an all-time high and the Dow Jones Industrial Average topped 30,000 for the first time. Treasuries steadied after the yield curve. Oil held above $45 a barrel in New York. Copper reached the highest since 2014. Tencent trades 1.6% lower in HK. The JSE Top 40 futures are indicating a slightly lower start, down 82 points or 0.15%, with the Rand slightly weaker from earlier levels -0.23% vs the USD.

Locally the FTSE/JSE Africa All-Share Index closed up 1.1% to 57,761, with SA Inc names outperforming on a stronger rand as risk on continues. The banking, property and retail sectors gained the most adding 3.6%, 2.5% and 1.5% respectively, with the save haven gold sector weighing the most down 5.8%. Platinum stocks also saw a 4.6% decline on the day. The Rand was up 1.3% to 15.30 per US$ at 6:37pm, with the Yield on 10 year govt rand bonds that fell 2.9 bps to 8.872%.
South Africa’s annual inflation rate stood at 3.0% in October, unchanged from a month earlier, according to the median estimate of 15 economists surveyed by Bloomberg. Prices are seen unchanged in the month compared to a 0.2% increase in September. Statistics South Africa will publish the data at 10 a.m.

  • S. Africa’s Mboweni Says PIC Willing to Help Eskom Resolve Debt
  • South Africa Paid Covax 500 Million Rand for Vaccine Access
  • South Africa May Open Equity Offering in SAA to Public: Mboweni
  • S. Africa’s Rising Debt Is ‘Major’ Threat to Finance Sector
  • JSE Seeing ‘Outperformance’ in Social Responsibility Index: CEO
  • Transaction Capital to Use Surplus Cash to Buy More Loan Books

ECONOMIC DATA:

  • 10am: Oct. CPI y/y est. YoY, est. 3.0%, prior 3.0%; m/m est. 0.0%, prior 0.2%
  • CPI core y/y est. 3.2%, prior 3.3%; m/m est. 0%, prior 0.2%
  • 12pm: 4Q BER Business Confidence, prior 24

EU/UK
European stocks closed higher yesterday amid growing optimism that another effective coronavirus vaccine has been discovered, and on news that the Trump administration has accepted President-elect Joe Biden’s transition into office. The pan-European Stoxx 600 gained 0.8% by the close, oil and gas stocks bouncing 4.3% to lead gains as almost all sectors and major bourses entered positive territory. Health care stocks bucked the trend to fall 0.7%. Germany’s DAX ended up 1.26%, while France’s CAC gained 1.2%, with London’s FTSE 100 closing up 1.5%. Germany’s economy grew by a record 8.5% in the third quarter. The sharp incline in GDP (gross domestic product) was revised upward from an initial flash estimate of 8.2% and followed a 9.8% drop in the second quarter as lockdown measures weighed on activity. Shares of Norwegian real estate company Entra rose nearly 20% amid takeover speculation. At the other end of the European blue chip index, German meal kit delivery company Hellofresh dropped 7.5%.
US
The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time amid positive vaccine news, hope for a strong economic recovery in 2021 and easing of political uncertainty as the Trump administration approved the start of the presidential transition. The 30-stock Dow surged 454 points, or 1.5%, to close at 30,046. At its high of the day, it traded at 30,116.51. Chevron rose 5% to lead the Dow higher. JPMorgan Chase and Goldman Sachs rose 4.6% and 3.8%, respectively. Meanwhile, the S&P 500 climbed 1.6% to 3,635, notching a record close, and the Nasdaq Composite advanced 1.3% to 12,036. The small-cap Russell 2000 also hit an all-time high, gaining 1.9% to end the day at 1,853. Tuesday’s gains put the Dow up more than 13% for the month, which would be its biggest monthly gain since 1987. The S&P 500 and Nasdaq are up 11.2% and 10.3%, respectively, in November. It would be the Nasdaq’s and S&P 500′s best monthly performances since April.
ASIA
Stocks in Asia-Pacific mostly rose in Wednesday trade following a record session on Wall Street as coronavirus vaccine hopes and reduced uncertainty in U.S. politics buoy investor sentiment. In Japan, the Nikkei 225 rose 1.23% while the Topix index gained 0.84%. The Hang Seng index in Hong Kong also advanced 0.85%. South Korea’s Kospi advanced 0.35%. Over in Australia, the S&P/ASX 200 rose 0.82%. Mainland Chinese stocks lagged: The Shanghai composite dipped 0.22% while the Shenzhen component shed 0.76%. MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.26% higher. Hong Kong-listed shares of Chinese smartphone maker Xiaomi fell 3.5%. The declines came despite the firm posting a roughly 19% year-over-year surge in its adjusted net profit for the three months ended Sept. 30.
COMMODITIES
Oil kept rising after closing at a eight- month high on increasing optimism that recent Covid-19 vaccine breakthroughs will lead to a swift recovery in global energy
demand next year. Futures in New York climbed around 1% to trade above $45 a barrel as a broader financial markets rally continued.
Gold traded near $1,800 an ounce as progress on vaccines and the start of President-elect Joe Biden’s formal transition damped demand for the haven. Spot gold was 0.2% lower at $1,803.99 an ounce at 12 p.m. in Singapore after dropping 3.4% in the first two days of the week to the lowest level since July. Silver slipped 0.1%, platinum added 0.3%, while palladium declined 0.6%.
Copper Jumps to Six-Year High as Strong Demand to Fuel Deficit. It rose as much as 0.9% to $7,360 a metric ton on the London Metal Exchange, the highest since January 2014, before trading at $7,312 a ton at 11:41 a.m. in Shanghai. Futures in New York were also at the highest since 2014, while the contract in China touched the highest since 2018. In other markets, aluminum advanced 0.4% and nickel declined 0.3%.