Stocks Fall, Markets Brace For Possible Democrat Triumph In Georgia

06/01/2021 Global stock prices slipped and U.S. bond yields rose on Wednesday as investors braced for the prospect that Democrats could win both races in a U.S. Senate run-off election in Georgia. A ‘blue sweep’ of Congress could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes. S&P 500 contracts retreated and 10-year Treasury yields rose toward the 1% level. Nasdaq 100 futures tumbled more than 1%. Shares in Hong Kong dipped amid sweeping arrests under a national security law. Chinese equities fluctuated remained flat, shrugging off concerns after President Donald Trump signed an order banning U.S. transactions with eight digital Chinese payment platforms, including Alipay.

The rand weakened above R15/$, on Tuesday on renewed lockdown concerns, ahead of NCCC meeting and speculation that UK’s new lockdown may spread to the rest of Europe – outing brakes on the much needed economic recovery. The JSE rose as much as 1.1% to 61,169 points, before closing 0.7% higher at 60,921 points. Top-40 gained 1% to 55,976 points. Gold stocks lead the charge: Harmony Gold rose 4.1% to R77.91, Gold Fields added 3.2%, AngloGold Ashanti 2.7%, BHP Billiton also closed 2.8% higher at R417.50. AFH SJ Ex-Div today 13cps.

NEWS:
• South African Liquor Traders Call for Lifting of Ban on Sales
• Audit Woes at South Africa’s Land Bank Has Bondholder Worried
• S. African Insurers May Fund Vaccines for Broader Population
• Citi Enters Short USDZAR Trade on Hopes of Rand Outperformance
EQUITY PREVIEW:
• Mondi Agrees to Buy Second Turkish Company in $80 Million Deal
• Prosus Bought 231,957 Naspers Shares for 679.3m Rand Dec. 28-31
MEDIA SUMMARIES:
• News24: Western Cape ramps up oxygen supply for Covid-19 patients as second wave hits hard
• Business Day: South Africa’s hope for health-worker vaccines from India thwarted by a ban on exports imposed by the Asian country’s government
ECONOMIC DATA:
• Dec. Naamsa Vehicle Sales YoY, prior -12.0%
• 9:15am: Dec. Standard Bank South Africa PMI, prior 50.3

EU/UK/US
Britain on Monday evening ordered people to stay home and closed all primary and secondary schools until at least mid-February in response to a new UK variant of the virus. The pan-European Stoxx 600 was down 0.19%, London’s FTSE 100 was up 0.61%. France’s CAC 40 slipped 0.44% and the DAX was 0.55% lower as Germany prepares to extend measures to stymie a surge of coronavirus cases.

Wall Street closed higher on Tuesday following a sharp sell-off in the previous session, driven by some stronger than expected manufacturing data. At the close, the Dow was up 0.55%, while the S&P 500 was 0.71% firmer and the Nasdaq 0.95% stronger.

ASIA/COMMODITIES
Chinese telecommunications firms – China Mobile, China Telecom, China Unicom – remain in focus as NYSE’s second-guessing on delisting those companies sowed confusion. Tencent and Alibaba continue to be in focus following Trump’s order banning U.S. transactions with eight Chinese software apps. Japan’s Nikkei fell 0.21% while MSCI’s index of Asian-Pacific excluding Japan erased earlier gains to stand almost flat. Hang Seng flat 0.02%, Australia underperforming at 1.12%, while markets in Shanghai are 0.42% better.

Brent Crude: Saudi Arabia agreed to make bigger cuts in output than expected during a meeting with allied producers, while industry data showed U.S. crude stockpiles fell last week.
Brent futures rose as much as 0.56% to $53.90 a barrel, the highest since Feb.2020.