Global Fundamental Analysis 05/02/2021

Australian Market

Australia’s S&P/ASX 200 lost 0.9%, snapping a three-day winning streak. All sectors finished in the red, led by property trusts, utilities, health care and industrials.

US Market

U.S. stocks closed higher after fresh data showed the number of people seeking unemployment benefits declined from the previous week but remained elevated.

The S&P 500 ticked up 1.1%, extending its winning streak to four sessions. The Dow Jones Industrial Average also rose 1.1%. The Nasdaq Composite climbed 1.2%, driven by a rise in technology stocks.

Investors are watching for signs that the economic recovery remains underway despite a high number of Covid-19 cases and new variants that existing inoculations may be less effective against. A handful of stocks that grew popular on online forums and posted big swings in recent days have also calmed. Meanwhile, vaccine rollouts are ramping up in the U.S., offering hope that there may be a sharp rebound later in the year.

Commodities

Gold and silver futures suffered sharp losses, as a decline in U.S. weekly jobless benefit claims, strength in the dollar and a rise Treasury yields all combined to push prices for both precious metals down by more than 2%.

Gold futures for April delivery dropped 2.4% to settle at $1,791.20 an ounce, sending the yellow metal, based on the most-active contracts, to lowest settlement since late November, FactSet data show. March silver lost 2.4% to settle at $26.234 an ounce.

Oil Futures

U.S. benchmark oil prices ended a choppy session 1% higher at a fresh, 1-year-high of $56.23 a barrel amid tightening global supplies and expectations for a strong recovery in demand by the spring.

WTI crude’s increase marks four straight sessions of gains and sets it on course for one of its biggest weekly gains in months. Bob Yawger at Mizuho said declining U.S. oil inventories are providing fundamental support for prices.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2020 to lows near US$1.1955 and was near US$1.1965 at the US close. The Aussie dollar fell from highs near US76.35 cents to lows near US75.90 cents and was near US76.00 cents at the close of US trade. And the Japanese yen eased from near 105.10 yen per US dollar to JPY105.50 and was around JPY105.55 at the US close of trade.

European Markets

European share markets generally rose on Thursday on hopes for a swifter global economic recovery. The Bank of England left monetary policy settings unchanged. The pan-European STOXX 600 index rose for the fourth day, up by 0.6%. The German Dax index rose 0.9%, helped by a 5.3% lift in shares of Bayer. But the UK FTSE index fell just 0.1%, weighed down by a 6.2% fall in shares of Unilever after the consumer giant disappointed with its sales growth target. But London trade shares in Rio Tinto rose 0.2% but shares in BHP fell 0.2%.

Asian Markets

Earlier Thursday, Chinese stocks ended the session lower as the market continued to weaken after making gains earlier in the week. The benchmark Shanghai Composite Index lost 0.4%, while the Shenzhen Composite Index shed 1.2%. The ChiNext Price Index declined by 0.7%. The consumer-service sector led the downturn as its strong momentum over the past few days faded.

Hong Kong shares also settled lower to snap a three-session winning streak. The benchmark Hang Seng Index lost 0.7%. The technology sector led the downturn, after strong gains earlier this week. The Nikkei Stock Average extended early losses to close 1.1% lower, weighed by consumer and chemical stocks.