Asian Equities Climb With S&P 500 and Nasdaq 100 futures

01/03/2021 The recovery in bonds helped S&P 500 and Nasdaq 100 equity futures advance, while stocks in Asia on Monday morning. On Friday, the S&P 500 slipped and tech stocks staged a modest rebound as Treasuries rallied. U.S. equities slid on a week punctured by a breakout in Treasury yields and a breakdown in the technology sector. Bonds declined as optimism over the economic recovery and the reflation trade led to a chaotic selloff in the Treasuries market. Oil prices climb after progress on huge U.S. stimulus bill. Brent crude futures 1.46%, to $65.36, while WTI crude futures jumped 1.48%, to $62.42 a barrel. U.S. House of Representatives passed a $1.9 trillion coronavirus relief package early Saturday.

The JSE lost 1.99% to 66,138 points on Friday and the Top-40 2.11%. Resources fell 4.14%, the platinum index 3.9% and gold miners 1.28%. Global markets went into a bit of a spin on Friday over concern that inflation could begin rising too quickly as more stimulus is pumped into the economy while the recovery from the coronavirus seems on track. Yield on 10-year govt rand bonds rose 5.00 bps to 9.06 bps. Top-40 futures are 400+ points, IG markets. We looking forward to a positive start at the opening of the local market.

NEWS:
• Ramaphosa Eases South African Virus Curbs as Infections Abate
• Eskom Bondholders Take Comfort From Guarantee Amid Rescue Talks
EQUITY PREVIEW:
• Steinhoff’s Advisory Fees Drop as Retailer Edges to Settlement
• Steinhoff 1Q Revenue EU2.54B
• FirstRand Projected to Cut Dividend Next Week
• Woolworths Cut to Sell at SBG Securities; PT 48 rand
EARNINGS:
• Hyprop Investments Ltd. (HYP SJ)
ECONOMIC DATA:
• 11am: Feb. Absa Manufacturing PMI, est. 51.0, prior 50.9
• Vehicle Sales YoY, est. -12.5%, prior -13.9%

EU/UK/US
European stocks closed lower on Friday as rising bond yields and fears of higher interest rates sent investors running for cover.The pan-European Stoxx 600 index fell 1.17%, alongside a 1.39% decline on the Cac-40, FTSE on the backfoot 2.53%, while the DAX gave up 0.67%. Rising rates were again in focus after the US 10-year Treasury yield rose above 1.5% during the preceding session against a backdrop of widespread wariness that higher rates could spur investors to rotate out of stocks and into bonds. In equity markets, miners were under the cosh, with Anglo American down 6.13%, Glencore off 4.69%, Antofagasta losing 3.41%, and Rio Tinto 4.52% lower.

Wall Street ended Friday session in the red, with the S&P500 fluctuating the entire day to finally give up 0.48% on the day. The Nasdaq staged a comeback to firm up 0.56% at the closing bell.
The Dow was not so lucky either, shed 1.50% on the day. U.S futures benchmarks all in positive territory.

There are some key events to watch this week:
• Reserve Bank of Australia sets monetary policy Tuesday.
• U.S. Federal Reserve Beige Book is due Wednesday.
• OPEC+ meeting on output Thursday.
• Fed Chair Jerome Powell to discuss the economy at a Wall Street Journal event on Thursday.
• The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.

ASIA
Asian shares rose Monday on hopes for President Joe Biden’s stimulus package and bargain-hunting after sell offs last week. Japan’s benchmark Nikkei 225 surged 2.1% in morning trading. Australia’s S&P/ASX 200 jumped 1.1%.Hong Kong’s Hang Seng advanced 1.2%, while the Shanghai Composite rose 0.52% despite a survey showing slightly weaker manufacturing indicators for the month of February. February’s manufacturing purchasing managers’ index (PMI) released on Sunday was 50.6, below the 51.1 in forecasts prepared by Investing.com and down from January’s 51.3 figure. The non-manufacturing PMI was 51.4, also down from January’s 52.4.