Global Fundamental Analysis 05/03/2020

Australian Market

The Australian benchmark index dropped 1.7% to a nine-month low of 6325.4, resuming its slide after central bank rate cuts in Australia and the U.S. failed to shift investor sentiment.  

The S&P/ASX 200 closed at its lowest level since June 3, taking its descent since Feb. 20’s record close of 7162.5 to nearly 12%. The tech sector followed the Nasdaq’s overnight decline, leading local losses with a 4.1% tumble, and the financial sector dropped 2.7% as banks stumbled on worries about the margin impact of rate cuts. Only the materials sector stayed out of the red with a gain of less than 1%.  

US Market

U.S. stocks surged as investors cheered growing signs of a coordinated response to the coronavirus by economies around the world and a strong Super Tuesday performance by former Vice President Joe Biden.  

The Dow Jones Industrial Average was up 3.2% in the last hour of trading, on course to claw back some of the losses that occurred during Tuesday’s frenzied trading session. The S&P 500 was up 2.9%, driven higher by the health-care sector. All 11 segments posted gains.  The technology-heavy Nasdaq Composite was 2.6% higher.  The jump in stocks helped to reverse some of the losses that markets suffered Tuesday after the Federal Reserve announced its first emergency rate cut in more than a decade to stem the economic fallout from the fast-spreading coronavirus epidemic.

Commodities

Gold for April delivery on Comex fell $1.40, or 0.09%, to settle at $1,643 an ounce after an intraday high of $1,654.30. May silver track on 5.8 cents, or 0.3%, to $17.246 an ounce. 

Oil Futures

Oil futures settled lower as the Organization of the Petroleum Exporting Countries and its allies have reportedly been struggling to agree on production cuts as they gather in Vienna ahead of key meetings this week.  

Forex

The dollar is retracing some of its losses from Tuesday as investors bet that other central banks could join the Federal Reserve in cutting interest rates. The euro was recently down 0.4% against the dollar after gaining 0.3% Tuesday, while the WSJ Dollar Index was up 0.1% after falling 0.4% Tuesday.  

European Markets

European stocks rose as traders pondered the potential for interest-rate cuts by European central banks following Tuesday’s rate reduction by the U.S. Federal Reserve.  The Stoxx Europe 600 and FTSE 100 each gained 1.4%, the CAC-40 rose 1.3% and the DAX climbed 1.2%.  

Asian Markets

Japanese stocks edged higher, with the Nikkei Stock Average closing up 0.1%, while China’s Shanghai Composite Index climbed 0.6% and South Korea’s Kospi added 2.2%. India’s Sensex shed 0.6%.