Futures slightly better despite England stay-at-home order, U.S. election uncertainty

02/11/2020 It’s hard to believe its November already and just one day away from the US Elections and parts of Europe prepare for another partial lockdown. Friday was the worst day of the pandemic so far, as cases grew by 569,000 worldwide, with the U.S. accounting for more than 99,000 — a daily record for any nation. The S&P 500 last week fell the most since March as the situation deteriorated. The JSE followed world markets lower on Friday, the JSE AllShare closed down 0.41% the lowest level since the 1st of June, this was despite some big moves to the upside by SOL + 11.27%, MTN + 4.11%, NPN + 3.98% and PRX + 2.97%. NPN and PRX rallied after PRX announced a buy-back to reduce the discount to Tencent. JSE value traded was on the high end at R 28bln largely due to high volumes in NPN and PRX.

Absa releases South Africa’s manufacturing PMI for October at 11am. The gauge climbed to 58.3 in September from 57.3 in August, its highest level yet.

• South African Lawmaker Urges Barclays Not to Fund SAA.
• South Africa’s Comair Secures New Debt as Lenders Back Rescue.
• Eskom Sees Worse 2021 as Utility Reports Third Straight Loss.
• South Africa’s Main Opposition Elects Steenhuisen as New Leader.
• Sasol Stock Jumps in Snap-Back From Deeply Oversold Territory

• 11am: Oct. Absa Manufacturing PMI, prior 58.3.Oct.
• Naamsa Vehicle Sales y/y, est. -21.5%, prior -23.9%
European markets closed mostly higher Friday after better-than-expected economic data, despite worries over tightening coronavirus restrictions. The pan-European Stoxx 600 provisionally closed up by around 0.2% after a choppy trading session, with oil and gas shares climbing 1.9% to lead the gains. FTSE – 0.08%, DAX – 0.36%, CAC +0.54%. Euro zone GDP jumped by more than expected in the third quarter, with a quarterly climb of 12.7%, according to preliminary data from the EU statistics office on Friday. The partial rebound from the previous quarter’s pandemic-induced plunge was driven in large part by France, Italy and Spain. Meanwhile inflation for the bloc came in October was -0.3%, unchanged from the previous month. European
Prime Minister Boris Johnson announced Saturday England is closing all nonessential businesses for the next four weeks after more than 22,600 weekly Covid-19 cases were reported for the U.K., far higher than its first peak of 4,800 average weekly cases in the spring. People will be ordered to stay at home unless it’s for essential purposes, Johnson said.
In the US the Dow closed out October with a 4.6% loss, marking its worst monthly performance since March. The S&P 500 and the Nasdaq fell 2.8% and 2.3% last month, respectively, both suffering their second straight negative month. The major averages are coming off their worst week since March 20 as coronavirus cases surged, fiscal stimulus negotiations fell apart and as shares of megacap tech companies including Apple and Amazon slumped following their quarterly earnings reports. Volatility spiked to a four-month high during last week’s stock rout. The VIX jumped above 40 briefly. Futures this morning are slightly better with the Dow up 90 points, S&P + 12 points and the Nasdaq + 36 points.
Asia-Pacific stocks mostly higher as new data shows China’s manufacturing activity grew in October. China’s official manufacturing Purchasing Managers’ Index (PMI) for October came in at 51.4, according to the country’s National Bureau of Statistics. That was slightly lower than the 51.5 reading in September. Chinese Mainland stocks are up, the Hang Send is 1.25% higher with Tencent + 0.59%. ASX 200 + 0.40%, AUSSIE Miners + 0.13%.
Oil prices fell more than 3% on Monday on worries a swathe of coronavirus lockdowns across Europe will weaken fuel demand, while traders braced for turbulence during the U.S. presidential election week. Brent -3.69% $ 36.57, WTI – 4.05% $ 34.32
Gold has railied $ 5.70 or 0.30% to $ 1884 this morning ahead of US elections and hopefully the long awaited stimulus package once the election is over.
All the best for November and for the week ahead.