04/06/2021 Asian stocks and U.S. equity futures stabilized Friday after Wall Street sagged amid robust U.S. economic data that stoked concerns about a pullback in central bank stimulus. Treasury yields and the dollar held gains. Shares pared losses in Japan and turned higher in China and Hong Kong. S&P 500 and Nasdaq 100 futures were little changed after the gauges fell overnight but came off lows on signs President Joe Biden may be willing to compromise on corporate taxes. Strong U.S. jobs data and record service-sector growth underscored the recovery from the pandemic. China’s markets weathered Biden’s order amending a ban on U.S. investment in Chinese companies. The order named 59 firms with ties to China’s military or in the surveillance industry, including Huawei Technologies Co. Gold remained lower after coming under pressure as yields and the dollar pushed higher, while the rally in crude oil has stalled. Meme stocks including AMC Entertainment Holdings Inc. had another volatile U.S. session. Bitcoin dipped after a cryptic Elon Musk tweet hinting at a split with the token. Tencent is trading down 1.1% in HK. The JSE Top 40 futures are indicating a flat to lower start, down 136 points or 0.22%, with the Rand steady around the 13.65 level vs the USD.
The FTSE/JSE Africa All-Share Index closed down 1.8% to 67,791, with all sectors closing in the red. Heavyweights Naspers and Prosus weighed the most, with both counters ending the session down 2.5%. Resources also took a big smack, with the sector erasing 2.7% as commodity prices tumbled, with banks giving up 0.5%. The Rand was down 0.9% to 13.65 per US$, with the Yield on 10-year govt rand bonds that fell 2.10 bps to 9.23 %.
South Africa’s Treasury will offer 1.2 billion rand of inflation-linked bonds at the weekly auction on Friday. In last week’s sale, investors placed orders of 2.3 billion rand for the same amount.
- Ramaphosa Chides Telecom Operators for Slowing Broadband Rollout
- Rand’s Outperformance is Far From Over, Says Bank of America
- Naspers Swap Plan Looks Better for Prosus Investors: Street Wrap
- South African Stocks Fall From Record as Naspers, Prosus Slide
- South Africa Seeks Additional Power From Private Producers
- Prosus to Buy Tech Firm Stack Overflow for $1.8 Billion
- Anglo American Restarts Longwall Mining at Moranbah North Coal
- Oceana Slides; Investec Downgrades to Hold on Earnings, Rand
- Iron Ore Miners to Ship 5.6% More in 2Q Than Prior Q: Bernstein
- Mr Price Cut to Hold at HSBC; PT 236 rand
- Amplats Raised to Buy at HSBC; PT 2,211 rand
- MEDIA SUMMARIES:
- Business Day.za: BT South Africa terminates relationship with Survé’s Sekunjalo
- Business Day.za: Ramaphosa concedes claims against Mkhize are serious
- Business Day.za: Investors cheesed off at decision to block Burger King sale
- Moneyweb: Eskom and unions continue to clash over wage negotiations
- Moneyweb: R200m payday for Purple Group’s Mark Barnes?
- Moneyweb: Eskom claims it under-recovered R8.4bn in 2020/21
- 7pm: President Cyril Ramaphosa delivers speech at the Black Management Forum’s annual corporate gala dinner
- 10am: Reserve Bank Governor Lesetja Kganyago participates in a panel discussion at the Green Swan conference on climate change
- 9am: South Africa to Sell 2.7 Billion Rand of 182-day Bills
- 9am: South Africa to Sell 3.8 Billion Rand of 273-day Bills
- 9am: South Africa to Sell 1 Billion Rand of 91-day Bills On
- 9am: South Africa to Sell 4.2 Billion Rand of 364-day Bills
- 11am: South Africa to Sell 2.25% 2038 Linkers
- 11am: South Africa to Sell 2.5% 2050 Linkers
- 11am: South Africa to Sell 1.875% 2029 Linkers
- Annual General Meetings: ABG SJ
European stocks closed mixed Thursday as investors reacted to fresh economic data and looked ahead to a key U.S. jobs report later this week. The pan-European Stoxx 600 index ended the session just below the flatline. Basic resources fell 1.9% to lead losses, with miners Anglo American and Antofagasta dropping 2.9% and 3.6%, respectively. The index was unmoved by the latest euro zone business activity data which rose in May as coronavirus restrictions eased. The IHS Markit’s final composite Purchasing Managers’ Index (PMI) rose to 57.1 in May, up from 53.8 in April. The final reading was ahead of a preliminary 56.9 indication. The 50-point mark separates growth from contraction. Lackluster sentiment in Europe comes after shares in Asia-Pacific were mixed in overnight trade, as investors reacted to data releases in Australia showing positive retail sales growth and the latest economic data out of China. Shares of Saint-Gobain were up 4.1%, making it the best performer on the Stoxx 600 index after the French construction materials group said it expected record operating income and margin for the first half of the year, Reuters reported. National Grid was among the worst performers, its shares down 4% as it traded ex-dividend.
Cyclical stocks lifted the Dow Jones Industrial Average off its low on Thursday to close the session near the flatline, while better-than-expected labor market data helped support sentiment. The blue-chip Dow closed down just 23.34 points, or less than 0.1%, at 34,577.04 after shedding 265 points at its session low. The S&P 500 declined 0.4% to 4,192.85 and the tech-heavy Nasdaq Composite fell 1% to 13,614.51. The benchmark S&P 500 sits about 1% from its all-time high reached earlier last month, but it has been stuck around these levels for about the last two weeks. The S&P 500 is up more than 11% this year so far. Merck and Dow Inc. were the two best performers in the 30-stock benchmark, both rising more than 2%. Consumer staples and utilities were the biggest gainers among 11 S&P 500 sectors, while consumer discretionary and tech weighed on the broader market, falling 1.2% and 0.9%, respectively. Shares of General Motors climbed nearly 6.4% after the company said it expects its results for the first half of 2021 to be “significantly better” than its prior guidance. On the data front, private job growth for May accelerated at its fastest pace in nearly a year as companies hired nearly a million workers, according to a report Thursday from payroll processing firm ADP. Total hires came to 978,000 for the month, a big jump from April’s 654,000 and the largest gain since June 2020. Economists surveyed by Dow Jones had been looking for 680,000. Meanwhile, first-time claims for unemployment benefits for the week ended May 29 totaled 385,000, versus a Dow Jones estimate of 393,000. It also marked the first time that jobless claims fell below 400,000 since the early days of the pandemic.
Shares in Asia-Pacific were mixed in Friday trade, as investors looked ahead to the Reserve Bank of India’s interest rate decision. Hong Kong’s Hang Seng index gained 0.14%. In mainland China, the Shanghai composite rose 0.14% while the Shenzhen component gained 0.76%. In Japan, the Nikkei 225 fell 0.43% while the Topix index slipped slightly. South Korea’s Kospi declined 0.14%. Meanwhile, stocks in Australia advanced, with the S&P/ASX 200 0.37% higher. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.14% lower. Looking ahead, the Reserve Bank of India is set to announce its interest rate decision at 2:15 p.m. HK/SIN on Friday. Shares in India nudged higher in Friday trade, with the Nifty 50 and BSE Sensex both up around 0.1% each. Hong Kong-listed shares of Alibaba rose 0.66% by Friday afternoon in the city. The gains came after Alibaba-affiliate Ant Group received approval to operate a consumer finance company. That marked a major positive development for Ant in the forced restructuring of its business months after its highly anticipated debut was abruptly shelved. Other Hong Kong-listed Chinese tech firms saw mixed moves: Baidu plunged 3.1% while Tencent slipped 0.65% and Meituan gained 0.26%. The broader Hang Seng Tech index hovered above the flatline. Investor sentiment on the sector may have taken a hit after U.S. President Joe Biden on Thursday expanded restrictions on American investments in certain Chinese firms with alleged ties to the country’s military and surveillance efforts. Chinese telecommunications powerhouse Huawei Technologies was among the 59 companies named. Technology stocks elsewhere fell in Friday trade. Japanese conglomerate Softbank Group declined 1.28% while South Korean chipmaker SK Hynix shed 0.39%.
Gold headed for its biggest weekly decline since March on investor concerns over a potential pullback in central bank stimulus amid signs the recovery is gathering pace. Bullion tumbled 2% Thursday as the dollar and Treasury yields rose following better-than-expected U.S. data which added to speculation the Federal Reserve may bring forward the timeline for tapering bond purchases. Spot gold dropped as much as 0.8% to $1,856.18 an ounce, the lowest intraday level since May 19, before erasing losses to trade little changed at $1,869.93 at 6:23 a.m. in London. Silver, platinum and palladium fell.
Oil swung between gains and losses as a recent rally to the highest since October 2018 cooled, although prices are still set for a second weekly advance following a raft of bullish calls on the demand outlook. Futures in New York traded near $69 a barrel after easing on Thursday as a stronger dollar made commodities priced in the U.S. currency more expensive.
Iron ore futures dropped alongside a broader risk-off decline across most base metals in China as the dollar strengthened amid concerns over a potential pullback in stimulus. The steel-making material snapped a six-day climb to trade
near $195 a ton, while copper and aluminum in Shanghai dropped.
Iron ore in Singapore sank as much as 3.9% before trading 1.9% lower at $197 a ton. Futures are up 6.8% this week. Prices in Dalian fell 1.6%, though are set to climb more than 10% this week. Rebar rose 0.9% and hot- rolled coil declined 0.2%, with both set to see a weekly advance in Shanghai.
Chinese copper futures dropped 2.4%, while aluminum fell 0.5% and zinc declined 1.7%. In London, base metals were steady to higher after the biggest daily loss in two weeks on Thursday.