Asia Stocks, U.S. Futures Dip After S&P 500 High

30/04/2021 Asian stocks are retreating this morning as China’s antitrust crackdown weighed on technology firms, while U.S. equity futures fell after another record on Wall Street overnight. Treasuries and the dollar were steady. Hong Kong led regional losses and an Asia-Pacific stock gauge headed for its first drop in three days. Chinese regulators imposed wide-ranging restrictions on the financial divisions of 13 companies, including Tencent Holdings Ltd. And ByteDance Ltd., in a broadening effort to rein in the nation’s tech giants. China’s purchasing managers surveys pointed to slowing expansion in activity, which may have added to the downbeat mood. The U.S. earlier reported 6.4% annualized growth in the first quarter, helping to propel the S&P 500 to a new high. European, S&P 500 and Nasdaq 100 contracts fell. Crude oil dipped, trading just below $65 a barrel. Copper’s Surge Toward a Record High Hitting Chinese Industry. Tencent trades 1.35% lower in HK. The JSE Top 40 futures are indicating a lower start, down 181 points or 0.29%, with the Rand that has weakened to 14.32 vs the USD.
The FTSE/JSE Africa All-Share Index closed down 0.5% to 67,392.73, weighed down mainly by heavyweights Prosus and Naspers that shed 1.8% and 1.3% respectively. Precious metals and mining also added to losses, with the sector closing down 1.25%. Banks however ended the session in the green, closing up 2.3%. The Rand was down 0.5% to 14.31 per US$, with the Yield on 10-year govt rand bonds that rose 3.30 bps to 9.25 %.
South Africa will publish data on foreign- exchange and gold reserves, private-sector credit, the monthly budget balance and the trade balance.

  • NEWS:
  • Gold Fields to Set Climate, Diversity Targets Later This Year
  • Goldman’s $5.6 Billion Bond Fund Picks Frontiers Over BRICS
  • India-Like Covid Virus Crisis May Yet Unfold in Africa, CDC Says
  • South African Airways Maintenance Arm to Cut Jobs Amid Pandemic
  • Woolworths Drags Retailers as Investors Switch to Banks
  • FirstRand Holder Remgro Offers Up to 40m Shares, Share Sale by Remgro Covered in Minutes
  • Glencore Sees Big Year, Copper Tops $10,000: EMEA Materials Wrap
  • Glencore Says 25.79% Voted Against Its Pay Policy at AGM
  • Old Mutual Unit to Buy Further 34% Stake in Manufacturer Actom
  • Prosus Co-Leads $75m Fundraise in Indian Platform ElasticRun
  • Glencore Sees FY Marketing EBIT Within Top Half of L-T Range
  • Sasol FY HEPS Expected to Improve by at Least 20%
  • Resilient REIT Cut to Sell at Renaissance Capital; PT 45.50 rand
  • MEDIA SUMMARIES:
  • Daily Maverick: Monetary policy is stifling economic recovery
  • Daily Maverick: The writing is on the wall: The good ship South Africa is on course to become a Greek tragedy
  • Moneyweb: SA-based crypto company Revix raises $4m ahead of move into EU market
  • Moneyweb: Botswana’s state-owned coal miner aims to boost output by 35%
  • Moneyweb: Ramaphosa – ANC distances itself from those complicit in state capture
  • Business Day.za: Ace Magashule plays for time while ANC storm brews

ECONOMIC DATA:
*March Private Sector Credit YoY -1.52%, est. 0.70%, prior 2.62%
*March Money Supply M3 YoY +3.62%, est. 7.00%, prior 7.48%

  • 2pm: March Monthly Budget Balance, est. -50.5b, prior -12.8b
  • 2pm: March Trade Balance Rand, est. 23.6b, prior 29b

GOVERNMENT:

  • 10am: South African commission of inquiry into state corruption continues its hearings in Johannesburg
  • 10:15am: Minister of Trade, Industry and Competition Ebrahim Patel hosts a virtual media briefing on worker ownership structures

BOND SALES/PURCHASES:

  • 11am: South Africa to Sell 2% 2025 Linkers
  • 11am: South Africa to Sell 2.5% 2050 Linkers
  • 12pm: South Africa to Sell 3.99 Billion Rand 273-day Bills
  • 12pm: South Africa to Sell 4.3 Billion Rand of 364-day Bills
  • 12pm: South Africa to Sell 2.94 Billion Rand 182-day Bills

CORPORATE EVENTS:

  • Annual General Meetings: LTE SJ, SNH GR
  • Sales Results: IMP SJ

EU/UK
European stocks closed slightly lower on Thursday as markets reacted to the U.S. Federal Reserve’s decision to hold interest rates near zero and digested a fresh round of corporate earnings. The pan-European Stoxx 600 finished down by 0.2% after an initial rally earlier in the session. Banks jumped 1.3% to lead gains while autos slid 2.6%. It was a busy day for Europe’s markets, with Total, Shell and Airbus among the companies reporting earnings before the bell. Shell slightly exceeded first-quarter profit expectations to record adjusted earnings of $3.2 billion and raised its dividend by around 4%. However, the oil major’s stock finished 1% lower. France’s Total saw its shares fall 0.9% despite profits surging to pre-pandemic levels on the back of stronger commodity prices. Airbus also slightly beat expectations in its first-quarter results, with the world’s largest planemaker reporting a particularly strong free cash flow of 1.26 billion euros ($1.53 billion). Airbus shares gained 0.7%. Spain’s Linea Directa, formerly the insurance unit of Bankinter, surged more than 23% in its market debut in Madrid on Thursday to lead the Stoxx 600. Finnish telecoms giant Nokia soared 8% after beating first-quarter revenue and profit expectations on the back of strong network and 5G sales. At the bottom of the European blue chip index, Italian steel pipe supplier Tenaris fell 6.7% after missing first-quarter core profit expectations. On the data front, euro zone economic sentiment surged in April, with the European Commission’s monthly survey showing optimism climbing to 110.3 points compared to 100.9 in March, vastly outstripping estimates in a Reuters poll. German consumer price inflation grew to 2.1% in April, exceeding the European Central Bank’s target of “close to but below 2%” for the second consecutive month. The reading sent German bund yields surging.
US
The S&P 500 closed at record levels on Thursday after blowout earnings results from two of the biggest tech companies in the world: Apple and Facebook. The Dow Jones Industrial Average ended the day up 239. points, or 0.7%, at 34,060. The S&P 500 advanced just under 0.7% to finish the day at 4,211, a new closing high. The tech-heavy Nasdaq Composite, which began the day up 1%, underperformed with a gain of just over 0.2% to end the session at 14,082. Apple, which reported earnings yesterday afternoon, said that sales jumped 54% during the quarter, with each product category seeing double-digit growth. The company also said it would increase its dividend by 7%, and authorized $90 billion in share buybacks. Still, Apple shares ended the day just under the flatline. McDonald’s published its results before the opening bell and told investors that its sales have finally topped pre-pandemic levels. The Dow component also raised its outlook for systemwide sales growth. The stock added 1.2% at the close. Caterpillar, which also reported on Thursday, lost 2% while Merck dropped 4.4% following disappointing results. Amazon issued its first-quarter results shortly after market close. The e-commerce giant surpassed analysts’ expectations on earnings and revenue. Gilead Sciences, Twitter, U.S. Steel and Western Digital will also post results after the bell. Facebook’s revenue jumped 48%, driven by higher-priced ads, sending its stock up 7.3% and to a record. Qualcomm shares added 4.4% after reporting a 52% jump in revenue. First-quarter GDP hit an annualized rate of 6.4%, according to a report published by the Bureau of Economic Analysis, a sign that the U.S. economy began 2021 with an acceleration of commercial activity.
ASIA
Asia-Pacific markets struggled for gains Friday as investors turned cautious, despite a positive finish stateside in the previous session. Australia’s ASX 200 fell 0.7% as all sectors turned red. Energy and materials were down 1.4% and 0.92%, respectively, while the heavily-weighted financials subindex lost 0.46%. The Japanese market returned to trade after being closed Thursday for a holiday. The benchmark Nikkei 225 was down 0.43% while the Topix index traded near flat. In South Korea, the Kospi index stumbled 0.52%. Chinese mainland shares also fell: The Shanghai composite declined 0.53% after market open while the Shenzhen component was down 0.3%. In Hong Kong, the Hang Seng index was down 1.31%. Data showed China’s factory activity expanded at a slower-than-expected pace in April as the official manufacturing Purchasing Manager’s Index fell to 51.1, from 51.9 in March. A reading above 50 indicates expansion. Friday’s session followed an overnight session on Wall Street where major U.S. indexes finished higher. Economic activity stateside picked up in the first three months of 2021 as GDP rose 6.4% on an annualized basis, but it fell slightly short of expectations.
COMMODITIES
Gold erased gains made in the aftermath of the Federal Reserve’s meeting as bond yields rose, putting pressure on the non-interest bearing metal. Spot gold fell 0.5% to $1,773.57 an ounce by 2:56 p.m. in New York. Futures for June delivery on the Comex fell 0.3% to settle at $1,768.30 an ounce. Spot silver and platinum also slid. Palladium advanced, after hitting a record high earlier.
Oil prices slipped on Friday, taking a breather after touching their highest in six weeks as concerns of wider lockdowns in India and Brazil to curb the COVID-19 pandemic offset a bullish outlook on summer fuel demand and economic recovery. Brent crude fell 29 cents, or 0.4%, to $68.27 a barrel. West Texas Intermediate crude for June was at $64.66 a barrel, down 35 cents, or 0.5%.
Copper topped $10,000 a metric ton for the first time since 2011, nearing the all-time high set that year as rebounding economies stoke demand and mines struggle to keep up. Prices rose as much as 1.3% to $10,008 a ton.
Iron ore futures retreated and trimmed a weekly advance as data from China pointed to signs of stress in demand for the steel-making material while Brazilian supply improved.