Stocks, Futures Bounce As Concerns Over Feds Ease

22/06/2021 Asian stocks extended their recovery on Tuesday, taking cue from U.S. equity rebound, as investor focus on economic growth partly offset worries about any near-term rise in U.S. interest rates. Japanese shares outperformed, helping a gauge of Asia-Pacific stocks to the biggest climb in about three weeks. S&P 500 contracts edged up after the index rallied overnight, aided by a revival of the value trade in sectors like energy and financials. European equity futures were also in the green.

Brent oil hit $75 a barrel for the first time since April 2019, it has rallied more than 40% this year as a strong rebound from the pandemic in the U.S., China and Europe underpins increasing fuel consumption. Bitcoin sank closer to $30,000 after China intensified its cryptocurrency clampdown. Spot gold firm 0.30% at $1,788.55, the bullion climbed after its biggest weekly decline in 15 months, helped by a drop in the dollar and robust inflows into gold-backed exchange-traded funds late last week.

Here are some events to watch this week:
• Fed Chair Jerome Powell testifies at a House Subcommittee hearing on the Fed’s pandemic emergency lending and its asset purchase programs Tuesday
• Bank of England interest rate decision Thursday
The JSE was little changed on Monday, struggling for direction as global peers were mixed. The All-share index gave up 0.11% to 65,563 points at the close of Monday’s trading, while the Top- was flat 0.05%. Retailers lost 1.18%, listed property 0.96%, financials 92%, precious metals 0.9% and banks 0.73%. The local currency is R14.25/% this morning, on the backfoot 0.13%. Tencent down 3.00 in Hong Kong. Top-40 futures, IG Markets, are 430+ points in the green. Looking forward to a positive start of the local market at the opening bell. Market participants will be watching closely as Fed chair Jerome Powell testifies before Congress on Tuesday.

NEWS:
• South Africa, France Plan First African mRNA Vaccine Facility
• Ramaphosa Demands More IMF Reserves for African Virus Recovery
• S. African Regulator Says Sinovac Application at Advanced Stage
EQUITY PREVIEW:
• Naspers Cut to Hold at Investec; PT 3,389 rand
• MTN Plans $1.5b Spend to Expand Broadband Access Across Nigeria
• Prosus Gains as Analysts Praise Its ‘Notably Strong’ E-Commerce
• Vukile Property Fund Cut to Hold at SBG Securities; PT 11 rand
• Prosus May Take Further Steps to Unlock Value, CEO Says
MEDIA SUMMARIES:
• Reuters Africa: WTO head says South Africa, Senegal, Rwanda and Nigeria considered as vaccine production hubs
EARNINGS:
• Omnia Holdings Ltd. (OMN SJ)
ECONOMIC DATA:
• 9am: April Leading Indicator, prior 121.3
GOVERNMENT:
• Lawmakers resume virtual public hearings on the country’s proposed National Health Insurance bill
CORPORATE EVENTS:
• Annual General Meetings: COH SJ
• Other Events: HAR SJ

EU/UK/US
European stocks rose on Monday as encouraging comments from Christine Lagarde boosted optimism over a speedy economic recovery this year. The pan-European STOXX 600 index ended 0.7% higher after falling to its lowest since June 3 earlier in the session. London stocks also closed in positive territory as Morrisons led supermarkets higher after rejecting a £5.5bn takeover offer – unsolicited from US private equity outfit Clayton Dubilier & Rice. The British firm rejected the offer, saying it undervalued the chain. The FTSE 100 ended the session up 0.64%. Both the Paris’ CAC-40 and Germany’s DAX advanced 0.50% and 1.00% respectively to end the day.

Wall Street recorded solid gains as major indices bounced back from their worst week since October. At the close, the Dow was up 1.76% and the S&P 500 was 1.40% firmer, while the Nasdaq saw out the session 0.79% stronger. Cyclical stocks, which underperformed last week on views that inflation and the pace of economic recovery may soon reach their peaks, rebounded sharply -oil companies rallied. Risk sentiment improved on optimism that the Fed may only tighten policies at a gradual pace. Stock futures opened slightly higher on Tuesday to extend earlier gains.

ASIA
MSCI’s broadest index of Asia-Pacific ex. Japan rose 0.37%, moving above Monday’s four-week lows and notching a 4% gain so far this year. Japan’s Nikkei225 advanced 2.27%, with Australia’s ASX200 firm 1.2%. Gains in banking and energy stocks pushed China shares higher on support from Beijing’s reform measures and firmer oil prices, while deepening regulatory curbs on bitcoin trading slammed digital currency-related firms. The CSI300 index rose 0.5% at the end of the morning session, while the Shanghai Composite Index gained 0.8%.

China’s central bank said on Monday it had recently summoned some banks and payment firms, including China Construction Bank and Alipay, urging them to crack down harder on cryptocurrency trading. The Hang Seng index was unchanged at 28,489.76 points