11/10/2021 Asian stocks are higher this morning, helped by rallies in Japan and Chinese technology shares, while crude oil surged past $80 a barrel amid a global energy crunch. Japanese shares were boosted by a weaker yen and Prime Minister Fumio Kishida’s comments that he isn’t considering capital-gains tax changes at present. A Hong Kong gauge of Chinese tech equities jumped more than 3% on easing concerns about Beijing’s crackdown on internet platforms after food delivery giant Meituan received a lower-than-expected antitrust fine. U.S. and European futures are lower after Wall Street declined on Friday on disappointing jobs growth data that also showed a jump in earnings. Wage gains and higher energy costs are stoking inflation and supporting the case for tighter monetary policy to tackle inflation, including a looming reduction in Federal Reserve stimulus. West Texas Intermediate crude was at the highest since 2014, while China’s coal futures reached a record as flooding shuttered mines. Treasury futures fell, after the 10-year U.S. Treasury yield advanced past 1.6% Friday. There’s no cash Treasuries trading Monday due to a U.S. holiday. The dollar edged up.
Tencent trades 2.1% higher in HK. The Rand is hovering around the 14.97 level vs the USD, slightly weaker than Friday with most commodity prices higher across the board. The FTSE JSE Top 40 futures are indicating a flat to slightly higher start, up 50 points or +0.09%.
Here are a few events to watch this week:
- IMF/World Bank annual meetings start in Washington. Though Oct. 17
- Bank of Korea policy decision and briefing. Tuesday
- Atlanta Fed President Raphael Bostic speaks on inflation. Tuesday
- U.S. FOMC minutes and CPI. Wednesday
- JPMorgan Chase & Co. kicks off the reporting season. Wednesday
- China PPI, CPI. Thursday
- U.S. initial jobless claims, PPI. Thursday
On Friday the FTSE/JSE Africa All-Share Index closed up 0.1% to 65,242, mostly supported by the precious metals and mining index that gained a healthy 6.4%. Platinum counters surged the most with Northam +14%, Sibanye +9.6%, Impala +9.3% and Amplats +6.4%. Banks and retailers closed negative down 2.2% and 1.5% respectively as the Rand started weakening towards the end of the session, but still closed up 0.2% at 14.93 per US$, The Yield on 10-year govt rand bonds rose 5.90 bps to 9.87%.
The ruling African National Congress’ Deputy President David Mabuza will address a media briefing at 12pm in the capital, Pretoria, after meeting with party structures to outline a strategy to reclaim control over the city in the local government elections on Nov. 1.
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- S. African Union to Present New Wage Offer to Striking Members
- Watch South African Hotel Stocks After U.K. Eases Travel Curbs
- Nedbank to Repurchase All Scheme Shares for 9.79 Rand Each
- South Africa’s Thungela Slides to One-Week Low Amid Coal Slump
- South African Stocks Rise to One-Month High as Oil Boosts Sasol
- MTN Topples Vodacom as Africa’s Largest Wireless Carrier
- Daily Maverick: Mantashe says nuclear is the ‘saviour’ while Ramaphosa punts hydrogen and green energy
- Daily Maverick: ANC fails to stop the corruption train – 32 major scandals, four in 2021 alone
- Business Day.za: Invicta spends more than R500m to acquire Dartcom amid fibre race
- 11:30am: Sept. SACCI Business Confidence
European markets closed lower on Friday afternoon following a roller-coaster week for global stocks, as investors digested a dire U.S. jobs report. The pan-European Stoxx 600 ended down 0.2%, with autos gaining 1.2% while tech slid 1.3% to lead losses. Markets have fluctuated hard over the past week as global investors assess the possibility of persistent high inflation, with U.S. bond yields driving jitters for growth-oriented tech stocks. Friday’s U.S. nonfarm payrolls report, a key indicator for the Federal Reserve as it prepares to slow its $120 billion-per-month bond-buying program, badly missed expectations. The U.S. economy created just 194,000 jobs in September against a Dow Jones estimate of 500,000, the Labor Department reported. Back in Europe, Ireland relinquished its opposition to new global corporate tax rules on Thursday, agreeing to forego its 12.5% tax for large multinational corporations in a key development for efforts to install a worldwide minimum rate of “at least” 15%. In corporate news, Stellantis is reportedly mulling splitting off two of its Opel plants in Germany, one of which is temporarily closing next week due to the global semiconductor shortage. On the data front, Germany’s trade balance for August came in at positive 13 billion euros (positive $15 billion) on a seasonally adjusted basis, slightly below a forecast of 15.8 billion euros. In terms of individual share price movement, French car parts manufacturer Faurecia gained 4.4% to lead the Stoxx 600 by mid-afternoon deals. At the bottom of the index, Tui plunged more than 15% as further flight and holiday cancellations continued to bite. The Anglo-German travel operator is planning a 1.1 billion euro capital increase to service a spike in demand for holidays.
The Dow was little changed on Friday, notching a winning week as optimism about a short-term debt ceiling deal trumped a disappointing jobs report. The Dow Jones Industrial Average dropped 8.69 points to 34,746. The S&P 500 fell about 0.2% to 4,391. The technology-focused Nasdaq Composite fell 0.5% to 14,579. The major averages all ended in the green for the week. The Dow rose 1.2% for its best week since June. The S&P 500 rose about 0.8% for its best week since August. The Nasdaq rose just shy of 0.1% since Monday. Energy stocks plowed higher on Friday as West Texas Intermediate crude futures, the U.S. oil benchmark, crossed $80 per barrel on Friday for the first time since November 2014. WTI crude settled at $79.35. Exxon Mobil rose 2.5%, Chevron advanced 2.2% and ConocoPhillips added nearly 4.8%. There was something for both bears and bulls in Friday’s jobs report, which explains the gyrations in stocks following the release. The headline number was a major disappointment as the economy added just 194,000 jobs in September, the Labor Department reported. That was well below the Dow Jones estimate of 500,000. On the positive side, the unemployment rate itself fell to a much lower point than economists forecast. At 4.8%, that’s the same level seen in late 2016. Plus, August’s jobs report was revised up to 366,000 compared to the initial read of 235,000. A bleaker labor picture could stall the Federal Reserve, as it prepares to slow its $120 billion-per-month bond-buying program.
Shares in Asia-Pacific were mostly higher in Monday trade as stocks in Hong Kong led gains regionally. Hong Kong’s Hang Seng index rose 2.2% by Monday afternoon. Shares of Meituan in Hong Kong surged 9.2%. China’s market regulator on Friday said it had fined the company about 3.4 billion Chinese yuan ($527.71 million) after finding it guilty of monopolistic practices. Still, that was far smaller than the 18.23 billion yuan ($2.8 billion) fine that Alibaba had been slapped with back in April. Other Chinese tech stocks in Hong Kong also saw sizable gains, with Tencent rising 2.9% while Alibaba surged 9.3%. The Hang Seng Tech index jumped 3.6%. Mainland Chinese stocks advanced, with the Shanghai composite up 0.38% while the Shenzhen component sat fractionally higher. Aviation-related stocks in Singapore surged in Monday trade, with Singapore Airlines soaring 6.6% while SATS gained 3.6%. The gains came after Singapore authorities announced over the weekend that more “vaccinated travel lanes” are set to open with more countries. The broader Straits Times index in the country rose around 0.1%. In Japan, the Nikkei 225 rose 1.6% while the Topix index jumped 1.5%. Elsewhere, shares in Australia lagged, with the S&P/ASX 200 down 0.38%. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.71%. Markets in South Korea are closed on Monday for a holiday.
Gold steadied as investors weighed the implications of weaker-than-expected U.S. jobs data on the timing of the Federal Reserve’s decision to begin reining in stimulus. Spot gold steadied at $1,756.58 an ounce in Singapore. Prices surged as much as 1.5% on Friday after the jobs data before closing little changed. Silver, platinum and palladium all advanced.
Oil prices surged again on Monday, extending multiweek gains as an energy crisis gripping major economies shows no sign of easing amid supply restraint from major producers. Brent crude was up $1.20 cents, or 1.5%, at $83.59 a barrel, after gaining nearly 4% last week. U.S. oil was up $1.51, or 1.9%, at $80.86 a barrel, the highest since late 2014. U.S. crude rose 4.6% through Friday.
Iron ore futures extended gains as improved rebar margins at Chinese steel mills and better demand prospects bolster the outlook for the raw material. Prices of the steel-making ingredient in Singapore have rebounded more than 40% from a low in September. Investors are continuing to weigh China’s autumn demand against a power crisis that has rattled the market. China is facing heavy rains and floods that have seen 60 of the 682 coal mines closed in Shanxi province, adding to a worsening energy crunch that’s a threat to the nation’s economy. Futures in Singapore jumped as much as 7.4% before trading 7.1% higher at $133.45. Prices in Dalian jumped 2.7%. Rebar edged 1% higher in Shanghai while hot-rolled coiled climbed.