Asian Markets And Futures Climb As Value Rotation Bolsters Wall Street

28/05/2021 Asian stock markets rose along with U.S. futures solid economic data and President Joe Biden’s federal spending plans – reportedly to unveil a budget that would take federal spending to $6 trillion in the coming fiscal year. Japanese shares outperformed, alongside Hong Kong pushing higher aided by JD Logistics Inc.’s debut. A rise in industrial and financial shares fuelled a modest overall increase in Wall Street, while small-caps outperformed and the tech-heavy Nasdaq 100 slipped.
U.S. data included a drop in jobless claims to a fresh pandemic low.

Oil prices pushed higher supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, while concerns eased about the impact of any return of Iranian supplies. Brent crude futures gained 38 cents, 0.49%, to $69.80 a barrel while U.S. WTI crude was at $67.18 a barrel, up 0.51%. Gold was down this morning as a strengthening dollar and rising U.S. yields pressured the yellow metal. Gold futures inched down 0.14%, or $2.54, to $1,894.10.

The JSE closed firm 1.26% to 66,940 points and the Top-40 1.18%. Retailers leapt 6.27% as Mr Price announce headline profit grew in the second half to 21.6%, while it also gained market share. The retailer’s share gained the most on the day, up 11.72% to R220.47, bringing its year-to-date gains to just under 29.20%. The company declared a final dividend of 462.7c per share. The rand reached its best level since February 2019 in intraday trade at R13.67/$ in the morning, around 10H20; the local currency has managed to recoup 1.50% against the greenback for the week. Top-40 futures 248 points firm at the time of the writing.

EQUITY PREVIEW:
• Standard Bank Says 31.95% Vote Against Pay Policy at AGM
• Nedbank Impairments Fell Substantially During Jan-April Months
• Sibanye Stillwater Outlook to Positive by S&P
• Johannesburg Retail Stocks Jump to 2019 High as Mr Price Soars
• Mr Price Raised to Buy at Investec; PT 250 rand
• Pepkor Appoints Former Sanlam CEO Ian Kirk to the Board
• Standard Bank Expects Revenue Pressure Amid Low Interest Rates
• Morgan Stanley Upgrades Sappi, Sees Recovery in Earnings
• Iron Ore Miners to Ship 5.3% More in 2Q Than Prior Q: Bernstein
• Naspers, Prosus See Settlement of Exchange Offer on Aug. 16
• Pepkor 1H Net Income 2.44B Rand Vs. 1.47B Rand Y/y
• Mr Price FY Net Income 2.65B Rand Vs. 2.70B Rand Y/y
• Life Healthcare 1H Net Income 812M Rand Vs. 781M Rand Y/y
• Sappi Raised to Overweight at Morgan Stanley; PT 60 rand
MEDIA SUMMARIES:
• Fin24: Regulator questions Markus Jooste as it probes who’s to blame for publishing false Steinhoff financials
• ENCA: COVID-19 in SA: Over 4,600 new cases identified
• Financial Mail: Eskom wage talks: shedding a pay load Eskom wage talks: shedding a pay load
• Daily Maverick: Mining mayhem: Murders and mafia underscore need for mine police force, says Minerals Council
• Financial Mail: ROB ROSE: Discovery ‘won’t accept’ nationalising medical reserves ROB ROSE: Discovery ‘won’t
• Business Day.za: ANC heavyweights’ court filings boost case against Ace Magashule
EARNINGS:
• Nampak (NPK SJ) 1H
ECONOMIC DATA:
• 2pm: April Monthly Budget Balance, est. -55b, prior -29.8b
Annual General Meetings:
• MTN SJ, NED SJ
• Sales Results:
L2D SJ

EU/UK/US
European shares finished mostly higher on Thursday, buoyed by better-than-expected data out of the US. The pan-European Stoxx 600 index climbed 0.27%, alongside the Cac-40 ahead by 0.69% to, while Germany’s Dax and the FTSE100 on the other hand dipped 0.28% and 0.10% respectively. HSBC reversed early losses after the bank said it was pulling out of US retail banking by selling some parts of the money-losing business and winding down others to focus on Asia, its biggest market. French plane maker Airbus jumped 9.2% after it set out sweeping goals to expand production of jetliners, as the airline industry recovers from the COVID-19 pandemic.

Wall Street stocks closed higher as investors mulled over this week’s jobless data from the Department of Labour. The Dow closed 0.41%, while the S&P 500 was 0.12% firmer and the Nasdaq saw out the session 0.01% weaker at 13,736.28. The S&P 500 Index rose for a third time in four sessions while cyclical sectors jumped as investors assessed an improving economy, risks of higher inflation and a slew of retailer earnings. The initial jobless claims coming in at 406,000 in the week ended 15 May, the figure was also below analyst estimates of 444,000 and a fresh pandemic-era low. GDP grew at a 6.4% seasonally-adjusted annual rate in the first quarter, in line with estimates, setting the US economy on course to pull above pre-pandemic levels in the current quarter. Equity futures firmly in the green, with the Dow futures outperforming, giving thumbs up to the positive economic data released on Thursday.

ASIA
Asian stocks on course for a seventh day of gains on Friday as investors bet the U.S. will lead the world out of the COVID-19 pandemic, with the focus turning to a multi-trillion dollar spending boost by the Biden’s administration. Tokyo led the advance, with the Nikkei jumping 2.11%. There were 209 advancers in the Nikkei index against 14 decliners. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.69%, or 700.80 points, hitting its highest level this month. Chinese blue chip CSI300 slipping 0.1% just after the open. Hang Seng firm 0.63%, alongside Aussie’s ASX 200 gaining 1.25%.