03/09/2021 Most Asian stocks rose Friday and the dollar held a drop after cyclicals led Wall Street to a record high ahead of a U.S. jobs report that will shape views on the outlook for Federal Reserve monetary policy. MSCI Inc.’s Asia-Pacific gauge climbed for a sixth day, the longest streak since January. Prime Minister Yoshihide Suga’s plan to resign sent Japanese shares to a three-decade high on expectations that his successor may boost stimulus. Chinese technology stocks fell, with investors continuing to weigh Beijing’s regulatory crackdown. U.S. futures advanced and European contracts were steady after energy shares helped the S&P 500 to an all-time high. A global stock index was also at an unprecedented level. The payrolls report will color expectations about when the Fed might taper pandemic-era stimulus and how long it can wait before hiking interest-rates. The U.S. probably added 725,000 jobs in August — a more moderate pace versus the prior two months, but stronger than early 2021. Elsewhere, oil was near $70 a barrel on bets that the market can absorb additional supply from OPEC+ as the U.S. Gulf grapples with Hurricane Ida’s impact. Bitcoin slipped back to about $49,000 after briefly surpassing $50,000 a day earlier.
Tencent trades 2.4% lower in HK. The Rand is weaker at around the 14.46 level vs the USD, with the FTSE JSE Top 40 futures indicating a flat start, but Tencent could weigh on Naspers and Prosus.
Yesterday the FTSE/JSE Africa All-Share Index closed down 0.5% to 66,654, with platinum counters weighing the most, Impala (-6.8%), Northam (-4.6%), Amplats (-4.3%) and Sibanye (-3.8%). Discovery also lost a massive 7.8% after the release of FY results. Aspen on the other hand gained a healthy 4.9% after posting a 21% rise in annual profit and saying that they in talks with J&J to raise Africa vaccine production. The Rand was down 0.4% to 14.47 per US$, with the Yield on 10-year govt rand bonds that fell 1.90 bps to 9.10 %.
President Cyril Ramaphosa is scheduled to address lawmakers on a range of issues including the government’s economic recovery plan and the Covid-19 vaccination program.
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- 9:15am: Aug. Standard Bank South Africa PMI, est. 49.0, prior 46.1
- 7:30am: Health Minister Joe Phaahla briefs reporters on the fight against Covid-19 and the national vaccination program
- 10am: President Cyril Ramaphosa to update Parliament on economic recovery efforts
- Annual General Meetings: AFH SJ
European stocks closed higher on Thursday as investors geared up for the next reading of U.S. nonfarm payrolls which is due Friday. The pan-European Stoxx 600 ended the session down by nearly 0.4% provisionally, with oil and gas stocks adding 2% to lead gains as most sectors and major bourses traded in positive territory. The U.S. Labor Department’s nonfarm payrolls report is due Friday. The August data is expected to show 720,000 new jobs added and an unemployment rate falling to 5.2%, according to Dow Jones estimates. The data could influence when the U.S. Federal Reserve begins to taper its asset purchase program, and the policy direction of central banks in Europe. In terms of individual share price movement, Swedish Orphan Biovitrum shares surged nearly 26% after investment firms Advent International and Aurora Investment offered to buy the Stockholm-based biopharmaceutical company for 235 Swedish krone ($27.30) per share. At the bottom of the European blue chip index, British online trading firm IG Group tumbled 11%. Mining giant BHP slid 5.6% as it traded ex-dividend.
The S&P 500 and the Nasdaq Composite climbed to new respective records on Thursday after weekly U.S. jobless claims reached their lowest level since the start of the Covid crisis. The broad equity benchmark added 0.3% to 4,536.95, hitting its 54th record closing high of 2021. The Dow Jones Industrial Average rose 131.29 points, or 0.4%, to 35,443.82, lifted by Walgreens and Chevron. The tech-heavy Nasdaq Composite advanced 0.1% to 15,331.18, also reaching a record close. First-time claims for unemployment insurance totaled 340,000 for the week ended Aug. 28, versus a Dow Jones estimate of 345,000. The number is also the lowest since March 2020. The data came in a day before the key August jobs report, which investors are watching closely to decipher how fast the Federal Reserve will remove easy monetary policy. Economists predict 720,000 jobs were added in the month, down from 943,000 jobs added in July. On Thursday, Chewy and Five Below were among the notable movers with shares tumbling 9.3% and 13%, respectively, after reporting quarterly results. Shares of ChargePoint, the maker of charge systems for electric vehicles, jumped 8.2% after reporting stellar quarterly earnings. September has been among the seasonally weakest months of the year, but many hold a constructive view on the market as the technical backdrop remains solid and the economic reopening from the pandemic continues.
Shares in Japan jumped on Friday after Prime Minister Yoshihide Suga said he will not be running in the upcoming leadership election. In afternoon trade, the Nikkei 225 surged 1.97% while the Topix index rose 1.62%. Japanese manufacturing stocks saw big gains, with Fanuc jumping 3.16% while JFE Holdings surged 6.31%. The Japanese yen traded at 110.01 per dollar, still stronger than levels around 110.4 seen against the greenback earlier this week. Mainland Chinese stocks were lower, with the Shanghai composite down 0.34% while the Shenzhen component slipped 0.472%. The Caixin/Markit services Purchasing Managers’ Index came in at 46.7, against July’s reading of 54.9. Earlier this week, the official non-manufacturing PMI for August showed contraction in the sector for the first time since early 2020. PMI readings above 50 represent expansion, while those below that level signal contraction. PMI readings are sequential and represent month-on-month expansion or contractions. Hong Kong’s Hang Seng index shed 0.67%. Hong Kong-listed shares of Alibaba fell more than 3% following reports that the firm is set to invest 100 billion yuan (about $15.5 billion) by 2025 for “common prosperity.” South Korea’s Kospi climbed 0.67%. In Australia, the S&P/ASX 200 gained 0.45%. MSCI’s largest index of Asia-Pacific shares outside Japan rose 0.1%.
Gold headed for the first weekly drop in four as investors counted down to U.S. jobs data for the latest read on the health of the labor market, figures that could hint at the outlook for Federal Reserve policy. Spot gold rose 0.2% to $1,813.28 an ounce and is down 0.2% this week. Silver, platinum and palladium all climbed.
Oil headed for a back-to-back weekly gain, supported by signs that the global crude market is tightening and a weaker U.S. currency. West Texas Intermediate steadied in Asia, up 1.7% since last Friday. U.S. government data this week showed a larger- than-expected draw in crude inventories in the run-up to the disruption caused by Hurricane Ida. The dollar has eased, making commodities including crude cheaper for overseas buyers. Oil’s climb this week came even as the Organization of Petroleum Exporting Countries and its allies decided to add supply and concerns lingered about the impact of the pandemic on energy demand. In its move, OPEC+ cited lower crude stockpiles in developed countries and an accelerating recovery. There have been positive signs from Asia, too, with revived buying from China’s independent refiners and improved gasoline consumption in India.
Industrial metals were mostly higher on Friday, with copper’s advance putting it on track for a second straight weekly gain, as the dollar sank to its lowest in almost a month ahead of a crucial U.S. jobs report. Three-month copper on the London Metal Exchange was up 0.6% at $9,433 a ton, while the most-traded October copper contract on the Shanghai Futures Exchange rose 1% to 69,500 yuan ($10,760.35) a ton. LME aluminum advanced 0.3% to $2,702 a ton, holding on to gains and hovering near a 10-year peak scaled on Thursday driven by fears of tight supply. LME nickel fell 0.3% to $19,410 a ton, while Shanghai nickel dropped 0.9% to 145,690 yuan a ton.
Iron ore futures rose for the first time this week on optimism an increase in Chinese construction activity over the next couple of months will offset the hit from Beijing’s steel output curbs. The steel-making material climbed as much as 3.5% on Friday, but is still down around 10% this week. Prices have collapsed by around a third since mid-July as the government stepped up efforts to curtail steel production to cut carbon emissions.