Global Fundamental Analysis 09/06/2020

Australian Market

US Market

U.S. stocks rose, putting the Nasdaq Composite at a record close, as investors continued to assess the pace of the economic recovery. Friday’s surprisingly upbeat jobs report continued to stoke investor demand for stocks,
analysts said. Shares of airlines, retailers, cruise liners and other companies tied to the reopening of the economy led the market higher.

Energy stocks also got a boost after Organization of the Petroleum Exporting Countries struck a deal over the weekend to extend production cuts through July.  The Dow Jones Industrial Average added 461 points, or 1.7%, to 27572, and the S&P 500
gained 1.2%, cutting the broad index’s losses for the year and putting it, just barely, in positive territory.  The Nasdaq, meanwhile, turned positive after tumbling in early trading. The technology-laden index rose 1.1%, giving the index its first record close since February. The Dow and the S&P 500 remain about 7% and 5%, respectively, from their February highs.

Commodities

Gold prices rose off a two-month low, recouping about half of what they lost in the previous session, as investors wagered that stimulus from central banks will remain in place for the foreseeable future, bolstering the case for bullion, despite some
strength in the U.S. stock market..

The moves higher for gold came after the commodity closed out Friday’s trade lower and notched a sharp weekly slide, following an unexpected rise in U.S. jobs for May and a drop in the nation’s unemployment rate to 13.3% from 14.7%, pushing prices for the haven metal to their lowest finish since April.

August gold on Comex climbed $22.10, or 1.3%, to settle at $1,705.10 an ounce, after finishing last week’s trade at the lowest level since early April and notching a weekly decline of 3.9%, according to FactSet data based on the most-active contracts. On Friday, prices lost 2.6%.

Oil Futures

U.S. benchmark oil prices ended the session 3.4% lower at $38.19/bbl despite a weekend deal by OPEC and Russia to extend an output-cut deal through July.  Analysts said the cuts are actually worsening structural problems for crude and fuel
markets created by coronavirus and demand destruction.

Forex

The WSJ Dollar Index was recently up 0.02% to 90.77.

European Markets

Asian Markets

Earlier in the day in Asia, Japanese stocks advanced, led by financial and auto stocks amid hopes for a global economic recovery.  The Nikkei Stock Average rose 1.4% to 23178.10.

Mainland China stocks ended the session mixed after multiple sessions higher. The benchmark Shanghai Composite Index gained 0.2% to settle at 2937.77, while the Shenzhen Composite Index rose 0.28 point to 1856.89. The ChiNext Price Index, which measures the performance of emerging industries and startups, fell 0.6% to 2153.56.

Hong Kong shares ended the session flat after five consecutive days of gains. The benchmark Hang Seng Index rose 6.36 points to settle at 24776.77.
South Korean stocks edged up for a seven-session winning streak, with the benchmark index Kospi closing 0.1% higher at 2184.29. Stocks were mixed with shipbuilders, car makers and oil-refiners higher, while construction and retail shares fell. The easing of pandemic lockdowns around the world boosted appetite for riskier assets such as stocks, and better-than-expected U.S. employment data for May boosted the upbeat mood. Investors turned cautious later in the session and booked profits after recent gains.

India’s Sensex ended 0.2% higher at 34370.58 amid hopes for a global economic recovery, although shares reversed some of their early gains.