Global Fundamental Analysis 03/02/2022

Australian Market

Australia’s S&P/ASX 200 index closed 1.2% higher as it continued to rebound from its worst January since 2008. The benchmark built on momentum from U.S. stocks, with nine of 11 sectors finishing higher. Financials added 1.05% as Reserve Bank of Australia Gov. Philip Lowe acknowledged the chance of a 2022 interest-rate rise. The tech sector finished flat.

US Market

U.S. stocks rose, extending their recent winning streak as investors weighed strong earnings reports from technology companies against weak economic reports. The Dow Jones Industrial Average was up 0.6%. The S&P 500 added 0.9% as traders tried to push the index to a fourth straight day of gains. The index gained 5.1% in the threeprior sessions. The Nasdaq Composite Index was up 0.5%. The tech-heavy index had risen more than 1% earlier in the session, buoyed by a surge in profit from Google parent Alphabet, but struggled to maintain those gains.  

“The focus has clearly turned to earnings. We’ve seen strong results from big tech companies. But at some point, we might have sentiment turning back to macro data and the Fed-we think we will oscillate between these two points,” said Luc Filip, head of investments at SYZ Private Banking. “For financial markets, this means more volatility.” 

The Nikkei Stock Average rose 1.7%, led by gains across almost all sectors in the wake of Wall Street’s advance overnight. Keyence climbed 6.2% after its nine-month net profit rose 65% on year. ANA Holdings rose 6.2% after it posted third-quarter operating profit. Nomura Holdings added 6.8% after its third-quarter net profit beat an analysts’ consensus estimate.

Commodities

Gold futures tallied a third straight gain as an unexpected monthly fall in U.S. private-sector jobs, weakness in the dollar, and a further retreat in yields for government debt helped lift the precious metal to its highest settlement price in a week.

April gold rose 0.5% to settle at $1,807.60 an ounce, following a 0.3% advance on Tuesday. “While gold is likely to exploit the dollar’s weakness to push higher, its near-term outlook remains influenced by the U.S. jobs report on Friday,” said Lukman Otunuga, manager, market analysis at FXTM.  

Oil Futures

Oil futures rose, with U.S. benchmark prices up just enough to score a fresh finish at the highest since October 2014, after OPEC+ agreed to stick with its timetable for delivering another 400,000 barrel-a-day rise in March. West Texas Intermediate crude for March delivery edged up nearly 0.1% to settle at $88.26 a barrel on the New York Mercantile Exchange. April Brent crude, the global benchmark, rose almost 0.4%, at $88.47 a barrel on ICE Futures Europe after trading as high as $90.52.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro generally held between US$1.1265 and US$1.1330 and was near US$1.1305 in late US trade. The Aussie
dollar held between US71.18 cents and US71.58 cents and was near US71.40 cents in late US close. And the Japanese yen rose from 114.80 yen per US dollar to JPY114.20 and was near JPY114.42 in late US trade.

European Markets

European sharemarkets were firmer on Wednesday supported by strong fourth-quarter earnings. According to Refinitiv, fourth-quarter profits for companies listed on the STOXX 600 are expected to rise 55% from a year earlier. Investors now await meetings on Thursday by the European Central Bank and Bank of England. The panEuropean STOXX 600 index rose by 0.5%. But while the German Dax index was flat, the UK FTSE index rose by 0.6%. In London trade, shares in Rio Tinto rose by 0.1%. Shares in BHP rose by 1.4%.

Asian Markets

The Chinese stock exchanges are closed this week for holiday.