13/10/2021 Asian stocks were mixed Wednesday as traders weighed the impact of elevated inflation on the economic recovery and looked ahead to earnings reports. A gauge of the dollar ticked lower. Shares in Japan posted modest losses, while South Korea outperformed amid a strong jobs report. In Hong Kong, trading was canceled because of a storm. S&P 500 and Nasdaq 100 futures dipped as investors wait to see whether the corporate profit outlook will boost sentiment. Apple Inc. slipped on a likely cut in iPhone 13 production targets for 2021 due to chip shortages, putting the focus on pandemic-related supply-chain snarls. The U.S. 10-year Treasury yield held below 1.60%. Markets are bracing for a U.S. CPI report that is expected to show elevated inflation. A rally in oil paused but crude remained around $80 a barrel amid a global energy crunch. Chinese thermal coal futures hit another record high.
No read through from Tencent as trading in Hong Kong were cancelled because of a typhoon warning alert . The Rand is holding it’s stronger level from yesterday around 14.94 vs the USD. Gold is holding steady ahead of a US inflation report, with commodity prices like copper and iron ore lower. Silver advanced, while platinum and palladium steadied, with oil softer but holding above $80 a barrel. The FTSE JSE Top 40 futures are indicating a lower start, down 197 points or -0.33%.
Here are a few events still to watch this week:
- U.S. FOMC minutes and CPI Wednesday
- China PPI, CPI Thursday
- U.S. initial jobless claims, PPI Thursday
Yesterday the FTSE/JSE Africa All-Share Index closed down 0.2% to 65,988, with Sasol weighing the most, giving up 5.5% at the end of the session. Naspers and Prosus were also a drag closing down 2.2% and 1.6% respectively following losses from Tencent in HK. Banks and retailers had a positive day, gaining 1% and 1.3% respectively as the rand strengthened towards the end of the day. The rand was up 0.7% to 14.96 per US$, with the Yield on 10-year govt rand bonds that fell 2.40 bps to 9.89%.
Public Enterprises Minister Pravin Gordhan and Agriculture, Land Reform and Rural Development Minister Thoko Didiza address the Agri SA Congress, outlining government plans to develop the sector to accelerate economic growth.
- South Africa Steel Strike Threatens to Worsen Employment Crisis
- Yields Above 9% Fail to Ignite Demand at South African Debt Sale
- Pimco, South Africa Reach $210 Million UN Green Energy Deal
- S. Africa’s Numsa Strike Enters 6th Day While Members Mull Offer
- South African Cement Gets Boost From State Ban on Imports
- Glencore to Sell Bolivian Zinc Assets to Santa Cruz for $110m
- Gold Fields Upgraded at RBC on Potential of Salares Norte Mine
- Naspers, Prosus Slip as China Crackdown Fears Weigh on Tencent
- Sibanye Stillwater Rated New Buy at Deutsche Bank; PT 70 rand
- PPC Extends Gains to 2019 High After State Ban on Cement Imports
- MEDIA SUMMARIES:
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- 1pm: Aug. Retail Sales Constant YoY, est. 2.0%, prior -0.8%
- 1pm: Aug. South Africa Retail Sales Co, est. 9.5%, prior -11.2%
- Department of Trade, Industry and Competition deputy minister Fikile Majola, deputy minister Pinky Kekana of the Office of the Presidency responsible for Infrastructure speak at the Hydrogen Economy Indaba virtual event. Hydrogen economy is forecast to be a significant growth opportunity with estimates of global GDP value in excess of $2.5 trillion by 2040
- Annual General Meetings: IMP SJ, LBH SJ
European stocks closed mostly lower on Tuesday amid volatile sentiment in global markets. he pan-European Stoxx 600 closed 0.1% lower provisionally, paring losses slightly after falling as much as 1.2% in early deals. Health care, retail and basic resources stocks fell 0.5% each, leading the losses. The muddled trade in Europe on Tuesday comes amid a choppy period for global markets, as investors monitor the outlook for inflation, supply chain issues, bond yields and central bank policy. The International Monetary Fund on Tuesday cut its global growth forecast, citing supply chain challenges and persistent Covid spread. The U.K. added 207,000 jobs in September, official figures showed on Tuesday, taking British employers’ payrolls to a record high as the end of the government’s furlough program draws near. Germany’s latest ZEW survey of economic sentiment fell for the fifth consecutive month, the institute reported on Tuesday, as supply bottlenecks continued to weigh on Europe’s largest economy. The index fell to 22.3 points, below an estimate of 24.0, while current conditions sentiment plunged to 10.3 points to 21.6 against a consensus forecast of 28.5. In terms of individual share price movement, British e-commerce company THG’s shares plunged nearly 35%, while at the top of the Stoxx 600, Swedish tech firm Sinch rose 5.5%.
The three major U.S. stock indexes closed lower for a third consecutive session Tuesday ahead of a key inflation reading and a kick-off to third-quarter earnings season. The Dow Jones Industrial Average shed 117 points, or 0.3%, to 34,378. The S&P 500 ticked down 0.2% to 4,350. The Nasdaq Composite closed 0.1% lower at 14,465. The averages traded near the flatline for much of Tuesday’s session before selling picked up into the close. Markets were mostly in wait-and-see mode ahead of report releases this week. The consumer price index for September is slated to be announced Wednesday morning. Economists expect prices for an array of consumer goods to jump 0.3% in September from the month prior and 5.3% year over year, according to Dow Jones. The Federal Open Market Committee on Wednesday is also set to release its minutes from the September meeting. Investors will be digesting the minutes for any potential clues regarding the central bank’s plans to pull back easy monetary policy. JPMorgan Chase and Delta Air Lines are scheduled to kick off the third-quarter earnings season Wednesday with reports before the bell. Other major companies reporting quarterly financial results later this week include Bank of America, Walgreens Boots Alliance, Wells Fargo, Morgan Stanley, Citigroup and Goldman Sachs.
Shares in mainland China were mixed in Wednesday trade as investors reacted to the release of Chinese trade data for September. The Shanghai composite declined 0.35% by Wednesday afternoon while the Shenzhen component rose 0.452%. China’s imports rose 17.6% from a year earlier in September, customs data showed Wednesday, missing expectations for a 20% expansion in a Reuters poll. Exports in September rose 28.1% from a year earlier in September, the data showed, exceeding forecasts by analysts in a Reuters poll for a 21% year-on-year rise. Trading in Hong Kong has been cancelled all day on Wednesday because of a typhoon warning alert, the Hong Kong exchange said in a release at noon. In Japan, the Nikkei 225 slipped 0.26% while the Topix index dipped 0.33%. Elsewhere, South Korea’s Kospi advanced 1.02%. Australian stocks swung between positive and negative territory, with the S&P/ASX 200 last trading fractionally lower. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.21%.
Gold held a gain ahead of a report that is expected to show U.S. inflation remained elevated, while the minutes from the latest Federal Reserve meeting will also be released. Spot gold rose 0.1% to $1,762.42 an ounce in Singapore, after advancing 0.3% Tuesday. Silver advanced, while platinum and palladium steadied.
Oil prices fell on Wednesday after a mixed finish in the previous session, amid concerns that rising coal and natural gas prices in China, India and Europe could raise inflation and slow global growth, limiting oil demand. The rise in the price of the dollar, which reached near its highest level in a year, also affected prices, which makes oil more expensive for holders of other currencies. US West Texas crude futures were down 71 cents, or 0.9 percent, at $79.93 a barrel, after rising 12 cents on Tuesday. As for Brent crude, it fell 70 cents, or 0.8 percent, to $82.72 a barrel, extending its losses, which amounted to 23 cents on Tuesday.
Copper prices fell in London as investors weighted inflationary pressures against prospects for corporate profits amid an economic recovery that may be losing steam. The metal settled 0.8% lower in London after a volatile trading session that saw the price for the industrial metal waver between brief gains and deeper declines. The volatility came amid choppy stock trading as investors awaited the start of the earnings season while weighing the risk of inflation against prospects for an economic rebound. Copper, used for a range of goods including pipes, wiring and electronics, is considered a bellwether for the economy.
Iron ore in Singapore fell for a second day, with futures dropping as much as 5.8%. Prices trade down 5.2% at $121.10 a ton, with futures in Dalian down 5.5%.