Asia-Pacific Shares Steady As Markets Await Federal Reserve Speech – Jackson Hole Symposium

25/08/2021 Asian shares held onto their recent gains on Wednesday as global equities rebounded thanks to a combination of positive COVID-19 vaccine news and easing worries over tapering of Federal Reserve stimulus. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, but still up almost 3.7% so far this week. Tencent flat in Hong Kong, 0.08%. Treasuries were steady and the dollar edged higher. U.S. futures fluctuated after the S&P 500 and the Nasdaq 100 closed at all-time highs. The next key read on the central bank outlook is due later this week when Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole symposium.

Oil dipped after the biggest two-day gain with the fast-spreading delta variant of the virus still clouding the demand outlook. Goldman Sachs Group and UBS Group see prices recovering through the end of 2021 as the market tightens. Investors will be watching for any change to OPEC+ output policy when the group meets Sept. 1. Brent futures currently $70.71, retreating almost 0.50%; while light-sweet Texas’ WTI slid 0.56% at $67.15.

Gold dropped as investors gear up for the annual Jackson Hole symposium. Three-quarters of economists expect a signal of when tapering could start to be shared either at Jackson Hole or at the Fed’s Sept. 21-22 meeting, when the committee updates its quarterly forecasts, according to a Bloomberg survey of 51 participants conducted in July. The bullion is just under $1,800 an ounce at $1,793.

The JSE tracked firmer global markets on Tuesday; the local bourse gained 0.93% to 67,451.54 points and the Top-40 added 1.02%. Resources -rose 0.93%, banks 1%, precious metals 0.66% and financials 0.83%. Sasol was the best overall performer for the second straight session. The chemicals/synthetic fuel producer gained 6.77% to R223.48 — the most since June. South Africa’s unemployment rate surged to the highest on a global list of 82 countries monitored by Bloomberg. Tuesday’s data covers the three months to end-June 2021, and the economic effects of the violence and looting that erupted in early July will be reflected only in the third quarter’s jobless data. We’re expecting a softer start at the opening bell of the local market as Top-40 futures, IG, indicate a retreat of -178 points below the watermark. Rand wobbles at R15.04/$, while the Yield on 10-year govt rand bonds fell 1.40 bps to 9.23%.

NEWS:
• Dis-Chem Founders to Reduce Stake in South Africa Drugstore Firm
• Land Bank of South Africa Seeks Support For Split to Repay Debt
• South African Politician Dlamini Charged, Stoking Tensions
• South Africa Unemployment Rate Rises to Highest in the World
EQUITY PREVIEW:
• Dis-Chem Revenue Increased 16.3% y/y in 22 Weeks Through Aug. 6
• Citi Keeps Naspers, Prosus at Buy; Shares Up as Tencent Rallies
EX DIV:
• ANG SJ, CCO SJ, L2D SJ, MNP SJ, RBP SJ
EARNINGS:
• Adcock Ingram (AIP SJ)
• Drdgold (DRD SJ)
GOVERNMENT:
• Various briefings including Treasury on fiscal responsibility and economic recovery and Transport Ministry on last month’s riots
CENTRAL BANKS:
• Deputy Central Bank Governor Kuben Naidoo speaks on economic outlook at Ninety One Event
CORPORATE EVENTS:
• Annual General Meetings: Naspers (NPN SJ), Mr Price (MRP SJ), Telkom (TKG SJ)

EU/UK/US
European shares drifted lower on Tuesday, though the underlying sentiment appeared to be positive with some analysts citing the stabilisation in new Covid-19 cases globally and following the record highs set on Wall Street during the previous session. The pan-regional Stoxx 600 index dipped 0,02% with most major continental bourses weaker. Germany’s DAX, outperformed, firming up to 0.33% at the close as data showed Germany’s GDP grew by 1.6% on 2Q2021, slightly up from its previous estimate of 1.5%, helped by private consumption and state spending. The FTSE 100 ended the day up 0.24%. Sainsbury slid 4.85% after surging on Monday, following a report that US private equity firm Apollo was considering making a £7bn offer for the supermarket chain. Banks were also under the cosh, with HSBC down 1.23% and Lloyds Banking Group 0.44% weaker. Marks and Spencer Group rose 4.1% after Berenberg and Credit Suisse raised their price targets on the UK retailer’s stock.

The S&P 500 hit another record high after Best Buy Co. (consumer electronics retailer) reported stellar second-quarter earnings. The benchmark gauge advanced 0.15% to close at 4486.23. Best Buy rose 8.3%, the most in over 15 months. The Dow closed 30.55 points higher, or 0.09%, modestly extending Monday’s rally as news that U.S. regulators had granted full approval for Pfizer/BioNTech’s Covid-19 vaccine. Nasdaq saw out the session 0.52% firmer. The Federal Reserve will host its annual economic symposium on Thursday through Saturday, traditionally held at Jackson Hole – though this year it will take place virtually due to the spread of COVID-19 in the county.

Here are some events to watch this week:
• U.S. GDP, initial jobless claims Thursday
• July U.S. personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

ASIA
Japanese shares rose for a third straight session on Wednesday, Nikkei225 rising 0.30%.Toyota Motor rose 2.00%, Nissan Motor rose 2.04%, while Toyota’s auto parts maker Denso advanced 1.74%
Airlines added 1.21% on expectations of a recovery in the industry. The Australian S&P/ASX 200 index was up 0.21%, as energy firms and miners rallied on improving commodity prices. Major miners rose 1.9% tracking iron ore prices, which jumped more than 6% overnight as easing worries over the COVID-19 outbreak in China helped calm nerves after several days of sell-offs driven by demand concerns. BHP Group and Fortescue Metals advanced between 1.57% and 3.3%. Chinese tech shares fluctuated after a strong two-day jump on bargain hunting. Hang Seng retreating 0.37%, while the Shanghai Composite notched up 0.34%