Asia Stocks Steady After U.S. Record; Dollar Rises

16/04/2021 Asia-Pacific stocks are steady this morning after surprisingly robust American economic data sent U.S. equity indexes to record levels. Yields on benchmark 10- year Treasury notes held a drop. Shares rose in China as figures showed economic growth soared from a year earlier but that quarter-on-quarter expansion slowed. Japan and Hong Kong were little changed in a soft end to the week despite optimism on Wall Street. European contracts edged up and U.S. futures slipped after the S&P 500 and Nasdaq 100 hit all-time highs on better-than- expected retail sales and jobless claims figures. Financials weakened amid the slide in bond yields, even after Citigroup Inc. and Bank of America Corp. beat trading-revenue forecasts. Oil headed for the biggest weekly gain since early March on optimism about the recovery from the pandemic. Copper is on course for the best week in about two months. Tencent trades 1.2% higher in HK. The JSE Top 40 futures are indicating a flat start, up only 45 points or 0.08%. The Rand remains firm at 14.20 vs the USD.
The FTSE/JSE Africa All-Share Index were little changed closing at 67,823. Banks were the star performer of the day closing up 2.4% supported by a stronger Rand, with miners Amplats and Exxaro that weighed, giving up 3.7% and 1.89% respectively. Naspers and Prosus were flat at the end of the session. The Rand was up 1.6% to 14.17 per US$, with the Yield on 10-year govt rand bonds that fell 12.50 bps to 9.11 %.
South Africa’s central bank is likely to maintain its accommodative monetary policy stance to support the economy for as long as it has room to do so, according to Governor Lesetja Kganyago.

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GOVERNMENT:

  • 10am: The hearings of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State continue in Johannesburg

BOND SALES/PURCHASES:

  • 11am: South Africa to Sell 1.875% 2029 Linkers
  • 11am: South Africa to Sell 2.25% 2038 Linkers
  • 11am: South Africa to Sell 2.5% 2050 Linkers
  • 11am: South Africa to Sell 2.94 Billion Rand 182-day Bills
  • 11am: South Africa to Sell 1.3 Billion Rand of 91-day Bills
  • 11am: South Africa to Sell 3.99 Billion Rand 273-day Bills
  • 11am: South Africa to Sell 4.3 Billion Rand of 364-day Bills

CORPORATE EVENTS:

  • Sales Results: MDC LN

EU/UK
European stocks hit a fresh record high yesterday, and analysts are confident there is further upside as prices remain low compared to the U.S. The pan-European Stoxx 600 hit a high of 438.29, surpassing levels seen in late February 2020, just before the region’s stocks sold off as the coronavirus pandemic hit its nations hard. Thursday’s move marks a more-than 55% jump from a pandemic low seen on March 18, 2020. J.P. Morgan analysts also said on Monday they see a 3% upside on Europe’s Stoxx 600 this year. In late March, analysts at Bank of America went even further, estimating a 7% jump for the largest European index by the end of the summer. European companies are expected to do better in the coming months, with Goldman Sachs analysts forecasting 40% earnings-per-share growth in Europe this year.
US
U.S. stocks climbed to record levels after key companies reported strong earnings and fresh economic data pointed to a rebound in consumer spending and the jobs market. The Dow Jones Industrial Average rose 305 points, or 0.9%, to a record close of 34,035, marking the first time the blue-chip benchmark has crossed the 34,000 milestone. The S&P 500 gained 1.1% to 4,170, also reaching a record high. The Nasdaq Composite advanced 1.3% to 14,038. Technology shares rebounded as bond yields fell. The so-called FAANG stocks – Facebook, Amazon, Apple, Netflix and Alphabet – all climbed more than 1%. The 10-year Treasury yield dropped 8 basis points below 1.56%. Earlier in the year, higher rates caused investors to dump growth-oriented stocks. Retail sales surged 9.8% in March as additional stimulus sent consumer spending soaring, topping estimates of a 6.1% gain. The Labor Department reported 576,000 new jobless claims for the week ended April 10, much lower than the 710,000 expected. Shares of UnitedHealth, gained 3.8% after results topped the Street’s forecasts and the health insurer raised guidance for 2021. Pepsi shares added 0.1% after the consumer snack and drink maker said sales last quarter rose nearly 7%, topping estimates. Shares of Citigroup erased earlier gains and fell 0.5% The bank posted results that beat analysts’ estimates for first-quarter profit with strong investment banking revenue and a bigger-than-expected release of loan-loss reserves. Bank of America shares rose as earnings last quarter blew past the Street on booming trading and investment banking results as well the release of loan-loss reserves. The shares dipped 2.9%, however. Newly public crypto exchange Coinbase rolled over and closed the day down 1.7% in volatile trading. The stock got a boost earlier after it was revealed Ark Invest’s Cathie Wood loaded up on the first day of trading.
ASIA
Shares in Asia-Pacific were largely muted in Friday trade as investors reacted to the release of Chinese economic data. Mainland Chinese stocks declined as the Shanghai composite gained 0.46% while the Shenzhen component slipped fractionally. Hong Kong’s Hang Seng index hovered above the flatline. China’s gross domestic product surged 18.3% in the first three months of the year from a year ago, the country’s National Bureau of Statistics said Friday. That was slightly lower than expectations for a 19% increase, according to analysts polled by Reuters. Meanwhile, retail sales jumped 34.2% in March, beating expectations of 28% growth. Industrial production missed expectations as it rose 14.1% in March, against Reuters’ prediction of 17.2% growth. The Nikkei 225 in Japan was 0.11% higher while the Topix index stood little changed. South Korea’s Kospi was about 0.1% lower. Australian stocks slipped as the S&P/ASX 200 declined around 0.1%. Over in India, the Nifty 50 advanced 0.53%. The gains came despite the Covid situation in the country remaining severe, with data released Thursday showing daily virus infections crossing the 200,000 mark. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed.
COMMODITIES
Gold headed for a second straight weekly advance as bond yields retreated, with investors assessing economic data from the U.S. and China. Spot gold was steady at $1,763.78 an ounce at 12:15 p.m. in Singapore, bringing this week’s gain to 1.1%. Silver, platinum were little changed. Palladium steadied after rising to the highest level in more than a year
Oil is heading for the biggest weekly gain since early March on optimism the recovery in demand from the Covid-19 pandemic is improving. Futures in New York were steady Friday and up about 7% this week.
Aluminum in London held near the highest in almost three years as China’s push to curb emissions from the sector fuels supply concerns. Aluminum on the London Metal Exchange retreated 0.3% to $2,331.50 a ton by 12:52 p.m. in Singapore. Prices climbed to the highest since 2018 on Thursday and are up 3% this week. Futures in Shanghai fell 1.5%, trimming a weekly advance. In other markets, copper was steady and heading for a 4% weekly gain. Nickel was little changed, while zinc declined.