10/02/2021 Stocks and equity futures push higher this morning as investors weighed the potential for the stimulus – fueled economic rebound against the chances of destabilizing inflation. The dollar edged lowerand Gold ticks higher.
Equities in Hong Kong climbed, led by Tencent Holdings Ltd. +3.11% amid positive sentiment toward reported changes at its gaming business. S&P 500 futures advanced after the benchmark halted a six-day winning streak when it edged back from an all-time high. Treasuries were steady with the yield on benchmark notes trading around 1.16%. Earlier, the Nasdaq 100 Index eked out a gain, while small caps notched the longest rally since December 2019. Elsewhere, oil drifted lower after seven sessions of gains. Bitcoin pulled back from a record it reached after Tesla Inc. bought $1.5 billion of the cryptocurrency.
Locally the JSE is at record high but the vaccine rollout remains a worry, the government is in advanced talks with Johnson & Johnson to secure an additional 20-million doses of its Covid-19 vaccine. The JSE closed firmer yesterday amid mixed global markets as investors digest US stimulus prospects and global vaccine rollouts. The JSE all share remained at a record high at 65 162 points, after closing above 65,000 points for the first time on Monday. Yesterday’s gains were relatively small, however, investors remain cautious following SA’s vaccine setback. We should see the locally market off to another positive start with Tencent up 3.11% and IG Markets up 348 points.
• Astra Covid Shot Still Useful in Variant-Hit Areas, WHO Says.
• Moody’s Sees South Africa Govt Debt at 100.7% of GDP in 2022-23.
• Impala Drops as Fourfold Profit Jump Leaves Some Disappoint.
• SA’s land borders may reopen next week – with a strict new 700m limit on truck queues.
• Zuma could go on trial as early as May after Thales elects not to appeal court ruling
• 11:30am: Jan. SACCI Business Confidence, est. 93.0.
• Standard Bank’s Chief Economist, Goolam Ballim, presents economic outlook for 2021.
The pan-European Stoxx 600 ended the session down by about 0.1%, with most sectors and major bourses finishing in negative territory. The lackluster trade in Europe comes after a global rally on Monday that saw U.S. stocks hit record highs. With its vaccination drive falling far behind, the EU has finalized a deal with Pfizer and BioNTech for the supply of an additional 300 million doses of their Covid vaccine, a European Commission spokesman told Reuters on Monday. Major Indexes were mixed with the FTSE + 0.12%, CAC + 0.10% and the DAX lower by 0.34%. Futures are firmer this morning.
Overnight, stocks snapped a six-day winning streak, with the S&P 500 dropping 0.1%. The Dow lost about 10 points, while the Nasdaq was the relative outperformer, gaining 0.15% as Facebook, Microsoft and Netflix all closed higher. The small-cap benchmark Russell 2000 gained 0.4% to an all-time high, bringing the index’s weekly gain to nearly 3%. Investors are betting on small caps as a proxy for an economic recovery from the pandemic. Investors are also monitoring process on a Covid-19 stimulus package. House Democrats on Monday unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills. The CPI report is scheduled to be released at 15:30 SA time today. Economists expect a consensus 0.3% increase in the index, a measure of inflation, or a year-over-year gain of 1.5%, according to Dow Jones. Excluding food and energy, it is projected to rise by 0.1%.
Earnings season continues today with Coca-Cola, General Motors and Under Armour set to report before the opening bell. Uber Technologies and MGM Resorts report earnings after the bell.
Shares in Asia-Pacific are mixed after the winning streak on Wall Street ended overnight .Mainland Chinese stocks were higher by the afternoon as the Shanghai composite gained 1.03% while the Shenzhen component advanced 1.891%. Hong Kong’s Hang Seng index jumped 1.74%. Tencent up 3.11%, China’s consumer inflation declined in January, according to the country’s National Bureau of Statistics which reported the consumer price index slipped 0.3% from a year ago. The NBS also reported the producer price index rose 0.3% year over year in January. Other markets: ASX 200 + 0.52%, Nikkei – 0.02%, Kospi + 0.73%.
Gold rises on softer Dollar to $ 1842/ ounce, Silver gained 0.6% to $27.36 an ounce, palladium was down 0.3% to $2,312.58 and Platinum rose 2.1% to $1,200.03, after hitting $1,202.29 earlier in the session, its highest since February 2015, on supply deficit concerns.
Here are some key events coming up:
• Earnings season continues with companies including Societe Generale and L’Oreal.
• EIA crude oil inventory report comes Wednesday.
• Sweden will set monetary policy on Wednesday.
• Federal Reserve Chair Jerome Powell will speak on a webinar Wednesday.
• The U.S. consumer price index comes Wednesday.
• Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.
• Bank of Russia’s policy decision comes Friday.