S&P POSTS ITS WORST TWO-DAY SELL OFF SINCE OCTOBER 2020

02/12/2021 Asian stocks are steady and U.S. equity futures higher this morning, shrugging off a weak Wall Street close amid questions about how much of a threat the omicron coronavirus strain really poses. MSCI Inc.’s Asia-Pacific gauge was little changed, while S&P 500 and Nasdaq 100 contracts rose. The World Health Organization said vaccines will likely protect against severe cases of the variant and Australia’s chief medical officer said there’s no indication the variant is deadlier than other strains. In Hong Kong, an index of Chinese technology shares retreated amid Beijing’s plan to close a loophole used by tech firms to list abroad. Some suppliers to Apple Inc. slid on a report that the firm informed component suppliers of weakening demand for the iPhone 13 line-up.

Locally, the JSE tracked stronger global markets yesterday, as investors concerns about the effect of the Omicron variant of Covid-19 on the world economy eased. The JSE Top 40 closed up 1.59% with AMS, MTN and DSY leading the gainers. The Rand is steady this morning around R 16.00/$, we lost ground yesterday after Turkish President Erdogan fired his finance minister, exposing rifts in his administration over a string of aggressive interest-rate cuts that have undermined the currency. New vehicle sales out yesterday showed November aggregate sales of 41 588 units was 6.6% above the figure a year ago with a 1% growth of 603 units month on month. Overall, dealers had another good selling month, with Toyota showing the highest growth on units by 1,964 units (19.7%), Suzuki 489 units (18.8%) and Porsche 58 (170%) from the previous month. 84.2% of sales going through the retail channel is encouraging with a small drop off in Rental at 11.4% from the previous month however with an impressive 15.6% of passenger car sales. We should be in for a mixed start today after yesterday’s strong finish and the US closing at the lows. IG Top 40 is down 243 points. Tencent + 0.32%.

EXX conludes share buy-back of R 1.5 bln, buying back 9.4 mln shares representing 2.62% of issued shares at an average price of 159.55 a 6.4% discount to the Vwap for the period. FY numbers due 3 March 2022.
EXX FY 2021 CAPEX IN COAL BUSINESS ABOUT 22% LOWER Y/Y

• South African Covid Daily Cases Double as Omicron Takes Hold
• South African Scientists Sound Caution on Omicron Case Severity
• Fauci Says Southern Africa Travel Ban on Omicron Is ‘Temporary’
• Implats Raises Royal Bafokeng Stake to 29.4% in Takeover Bid
• Santam Names Tavaziva Madzinga as CEO From April 1
• Bid Corp First Quarter HEPS Delivered ‘Record’ Performance
• Mr Price Raised to Buy at HSBC; PT 230 rand

ECONOMIC DATA:

• 1pm: Oct. Electricity Production YoY, prior 0%
• 1pm: Oct. Electricity Consumption YoY, prior 0.1%

Key events to watch this week:

• OPEC, allies may re-evaluate plans for reviving oil supplies, today
• U.S. initial jobless claims, today
• U.S. jobs report, factory orders, durable goods on Friday
European stocks are expected to open lower after yesterday’s relief rally as concerns persist over the omicron Covid variant. The U.K.’s FTSE is seen opening 80 points lower the DAX 176 points lower and the CAC 40 down 91 points according to data from IG. Data releases include the euro zone unemployment rate for October and producer prices for the same month. There are no major earnings out today.
In the US, futures are higher with the Dow future up 237 points, S&P up 26 points and the Nasdaq up 78 points this after a volatile trading day yesterday. During regular trading yesterday the Dow fell about 460 points, or 1.34%. Earlier in the session the 30-stock benchmark had advanced 521 points, or 1.5%. The S&P dipped 1.18%, giving back an earlier gain of about 1.9%. The Nasdaq Composite slid 1.83%, after earlier trading 1.8% higher. Stocks drifted from their morning highs after Fed Chairman Jerome Powell said that he expects policymakers to discuss the possibility of a faster taper schedule at the meeting this month, selling accelerated when the CDC confirmed that the omicron variant has made its way to the U.S., with the first confirmed case in California.
On the data front, weekly initial jobless claims numbers will be released today at 8:30 a.m. ET. Economists are expecting a print of 240,000, according to estimates from Dow Jones. The prior reading showed 199,000 first-time filers, which was the lowest since November 1969. The November jobs report will be released on Friday. These will follow a better-than-expected ADP report yesterday. Private payrolls increased by 534,000 in November, ahead of the expected 506 000.
Stocks in Asia-Pacific struggled for direction today, as concerns over the economic impact of the omicron Covid variant continue to weigh on investor sentiment. The Hang Seng reversed earlier losses to trade up 0.44% with Tencent + 0.32%. In Australia, the S&P/ASX 200 fell slightly below the flatline. Australia’s October trade surplus came in at 11.22 billion Australian dollars (about $7.97 billion) on a seasonally adjusted basis, according to official data. That was against expectations in a Reuters poll for an 11 billion Australian dollar surplus for October. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.31% higher.
Oil prices are higher reversing yesterday’s losses, on expectations OPEC+ may pause supply additions amid growing concern the spread of the omicron coronavirus variant could weigh on the global economy and fuel demand. OPEC+, will likely decide today whether to release more oil into the market as previously planned or restrain supply. Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply each month, as it gradually winds down record cuts agreed in 2020. Brent + 1.51% $ 69.95, WTI + 1.51% $ 6655.
Gold is lower this morning hurt by a firmer dollar and concerns how central banks are likely to respond to surging inflation and concerns over economic growth spurred by the new omicron coronavirus variant. Gold – 0.29% $ 1776, Platinum + 0.60% $ 944 and Palladium + 0.45% $ 1758.