Asian Daily Market Review
Markets are mixed across Asia Tuesday as indices in China,
South Korea, and Taiwan are all struggling, while investors across the region
wait to see if the U.S. House of Representatives will pass the $1.9 trillion
stimulus plan on Tuesday.
In Japan the Nikkei is trading 0.2% higher after struggling
early. Banking shares are higher on rising bond yields, while auto makers are
gaining on optimism over an economic recovery. Shares of Softbank are 2.5%
higher, but Sony is dropping 2.9%. Among the major exporters Toyota is 1.8%
higher, and Canon is advancing 1.5%, but Panasonic shares are plunging 7% on
news that the company is buying supply chain software firm Blue Yonder for $6.5
billion in the biggest deal since 2011 for the company.
Australia’s S&P/AX 200 also struggled at the open, but
is now trading 0.3% higher as the big four banks are lending support to the
market. Shares of ANZ are 1.6% higher, NAB and Westpac are each adding 1.1%,
and Commonwealth Bank is up 0.7%. Major miners are mixed today, as BHP is
falling 1.3%, but Rio Tinto is edging up by 0.2%.
In mainland China the Shanghai Composite trades 0.8% lower,
and the smaller cap Shenzhen Composite is down by 1.1%. Meanwhile in Hong Kong
the Hang Seng has a gain of 1.2% as it is taking its own direction.
South Korea’s Kospi is trading 1.5% lower to lead losses for
the region, and in Taiwan the Taiex is 0.5% lower.
Southeast Asian markets are mixed, with Singapore’s Straits
Times 1.3% higher, and the KLCI in Malaysia adding 0.6%, but Indonesia’s
Jakarta Composite falling 0.2%.
Disney Shares Surge Higher On Park Reopening
Shares of Disney gapped higher on Monday and finished the
day with a 6.3% advance in reaction to the news that California will allow the
entertainment company and theme park operator reopen its Anaheim-based
Disneyland theme park beginning April 1.
It’s been a year since Disneyland was open to the public,
and even when it reopens it will be capped at 15% of its normal capacity. Once
Orange County reaches risk level 3 that will increase to 25%, and at risk level
4 it will increase further to 35%.
Disney’s theme parks, once a steadily growing revenue base
for the company, have been a huge drag on earnings in the past year as the
COVD-19 pandemic has forced the closure of its parks all around the world.
Disneyland Paris is also expected to reopen the following day, April 2.
Disney also released a new Full-length animated feature film
this past weekend. Raya and the Last Dragon led in the box office this past
weekend, taking in $8.6 million. That wasn’t as big an opening as expected,
although Disney also released the movie simultaneously on Disney+ fr a fee, and
released no numbers regarding purchases on Disney+.
The park reopening and return of movie-going has investors
optimistic over the future prospects for Disney in the coming year. While the
15% opening capacity at Disneyland and limited movie going yet won’t translate
to profitability, it will limit the losses Disney has been experiencing since
the COVID-19 pandemic began. That could lead the stock, which is already up 11%
in 2021, and 74% over the past 52-weeks, substantially higher.
U.S. Daily Market Review
The leading U.S. stocks partly advanced today with tech-related shares coming under additional selling pressure.The Democrat majority in the House is estimated to approve the bill later this week. In addition, President Joe Biden is very likely to sign it into law before unemployment aid programs expire on March 14.This takes place as government bond yields extended their climb following Senate passage of a $1.9 trillion COVID-19 assistance for economic recovery.The Dow Jones Industrial Average added 104 points, or 0.3%, to open near 31,602. On the other side, the S&P-500 fell 4 points, 0.1%, and traded near 3,836. The Nasdaq Composite tumbled 93 points, or 0.7%, to about 12,827.
The USD Into A Massive Surge
The USD jumped to 3-1/2 month peak after higher rising U.S. Treasury yields boosted investors and added to the USD’s status as a safe-haven.Presently, the USD versus the Euro trades at 0.841 EUR, which is a small addition of $0.0025 or 0.30% from the previous close of 0.8391.The daily trading range is from 0.8381 to 0.8432.After slipping 4% in the last quarter of 2020, the greenback managed to rally to around 2.5% on annual basis.The economic indicators added to the U.S. data showing non-farm payrolls surged by 379,000 jobs last month.Moreover, the USD preserved its mark to one-month peak against the GBP at $1.3819.
European Daily Market Review
European markets managed to rally today with shares in Germany leading the region. The German DAX inclined 1.27% while France's CAC-40 gained 0.78% and London's FTSE-100 added 0.15%.The rising mode takes places after the Senate approved over the week-end $1.9 trillion economic relief and stimulus bill.This is preparing the trend paving the for extensions to unemployment benefits. ABN Amro and Banco de Sabadell jumping more than 7%.Deutsche Bank and Commerzbank gained more than 5%. Mall operators Klepierre and URW rallied a whole 8.1% and 7.7%.Cruise operator Carnival also advanced 8%.
Gold Prices Surge
Gold prices advanced this morning during the Asian hours, recovering back from the nine-month bottom marked during the previous session over a weaker USD.
Asian Daily Market Review
Asian markets are trading broadly higher to start the week
as Asian investors have their first chance to react to the better than expected
U.S. jobs report released last Friday. Also stoking optimism is the passage of
the U.S. COVID-19 stimulus bill, which is expected to be sent to President
Biden on Tuesday.
In Japan the Nikkei is trading 1% higher, with the Yen
substantially softer versus the U.S. dollar at the open. Shares of Softbank
Group are up 0.5% and Sony is trading 0.3% higher. Meanwhile major exporters
are rising, with Toyota advancing 1%, Panasonic up by 0.8%, and Canon surging
Australia’s S&P/ASX 200 is higher by 1.6% as Sydney
heads into the final hours of trading for the day. The big four banks are
pacing gains for the market, with ANZ 0.9% higher, NAB advancing 1.7%,
Commonwealth Bank 2% higher, and Westpac rising 0.3%. The major miners are
surging higher as well, with BHP 3.6% higher, and Rio Tinto adding 4.2%. Oil
majors are slipping despite gains for crude, with Santos 1.6% lower.
Mainland China’s markets are higher as well, with the
benchmark Shanghai Composite up 0.8%, and the smaller cap Shenzhen Composite
adding 0.5%. Over in Hong Kong the Hang Seng is lagging with a gain of 0.3%.
In South Korea the Kospi has a 0.5% gain, while Taiwan’s
Taiex is trading 1.3% higher.
Southeast Asian markets are higher as well, with Singapore’s
Straits Times Index leading gains for the region as it tacks on 1.9%. Meanwhile
the KLCI in Malaysia is adding 1.1%, and the Jakarta Composite in Indonesia is
Tesla Closes Below $600
Shares of Tesla fell 3.8% on Friday despite the massive
rally in the market following the release of the latest U.S. non-farm payrolls
report. That drop took the stock to a close below $600 for the first time since
December 4. What’s weighing on the stock and is it looking like a bargain at
At one point the stock was down more than 8% on Friday, but
the afternoon rally helped it to recoup more than half the early losses. It’s
been part of the group of growth companies that have fallen out of favor in
response to the surge in U.S. Treasury yields recently.
Thursday saw this surge in bond yields intensify after Fed
chairman Jerome Powell admitted that there could be a temporary spike in U.S.
inflation as the economy reopens. That comment stoked investor fears, with
market participants worried that if inflation does appear the Fed won’t be able
to control it.
These fears have been causing a correction for growth stocks
because they are valued based on presumptions over future cash flows. If
inflation heats up those future cash flows are worth less in today’s dollars.
Perhaps more troubling long-term is that some Tesla bulls
have been cashing in shares and admitting that Tesla now faces an onslaught of
competition in the electric vehicle market.
Tesla is also suffering from semiconductor shortages that
are hampering its ability to manufacture its electric vehicles. The company has
warned in the fourth quarter that these shortages are going to hurt vehicle
deliveries in the first half of 2021 and that’s being priced into the stock.
U.S. Daily Market Review
The S&P-500 rallied in a volatile trading session as data showing faster-than-predicted monthly jobs growth.The broad equity benchmark traded near the flatline after gaining more than 1% earlier. The tech-heavy Nasdaq Composite dropped 1.4% in the volatile session. The Dow Jones Industrial Average gained 80 points after soaring around 300 points.Yields on U.S. government bonds preserved the rising path after new numbers indicated in a large incline in employment in February.The U.S. 10-year Treasury yield popped above 1.6% to hit a 2021 high after the February jobs report. Nonfarm payrolls surged 379,000 jobs last month after securing 166,000 in January.The February report implied in that the economy added 379,000 new jobs last month, ahead of estimates of 210,000. The unemployment rate is just around the estimate of 6.3%.
European Daily Market Review
European markets partly retreated today with shares in France off the most. The CAC-40 slipped 0.85% while Germany's DAX dropped 0.72%. The pan-European Stoxx-600 declined 0.9% in early trade, with travel and leisure stocks shedding 1.8% to lead the falling path.London’s FTSE-100 tumbled largely, as a persistent rise in bond yields globally led to fears of higher inflation and borrowing costs.The blue-chip FTSE-100 index lost 0.7%, with banking and mining stocks, including Prudential Plc, Lloyds banking, Rio Tinto, Anglo American, and BHP, leading declines.The European Union could its extend the export controls on Covid-19 vaccines after a supplies of AstraZeneca immunizations to Australia from the EU London’s FTSE 100 fell on Friday.
Crude Oil Prices Surge
Oil prices rallied more than $1 per barrel on Friday, hitting jumping to its peak in the last year.This comes after OPEC and its allies agreed not to boost its output in April as they await a more substantal recovery in demand.Now, oil trades at $64.722, which is a rise of $0.725 or 1.13% from the previous close of $63.997. The daily trading range is from $63.797 to 65.021, while the trading volume is 32.33K.Brent crude futures for May inclined $68 a barrel on Friday, a level not seen since Jan. 8, 2020. Both contracts surged more than 4% on Thursday after the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, extended oil output curbs into April.Moreover, Saudi Arabia had reported will maintain its voluntary reduction of 1 million barrels per day through April.
Asian Daily Market Review
Asian markets are taking their lead from overnight action in
the U.S., falling in response to rising global bond yields just as Wall Street
did. The U.S. dollar index is trading at a three-month high as a result, and
against the Yen the USD is at an eight month high, touching the 108.00 level
for the first time since June.
In Japan the Nikkei is leading losses for the region,
trading down by 2% despite the weakness of the Yen. Shares of Softbank Group
are 2.6% lower, and Sony is falling 1.6%. Among the major exporters Toyota is
1.7% lower, and Canon is falling 2.1%, but Panasonic has a 0.9% advance in
opposition with the broader market moves.
Australia’s S&P/ASX 200 is 1% lower, but the index is
getting support from the big four banks for a second consecutive day. Shares of
ANZ are trading 1.4% higher, NAB is rising 0.4%, Commonwealth Bank is flat with
a loss of less than 0.1%, and Westpac is edging lower by 0.2%. The major miners
are sharply lower today, with BHP falling 3.2% and Rio Tinto dropping 4%.
Mainland Chinese markets are seeing more muted losses after
the Chinese government set its GDP forecast above 6% for 2021. The benchmark
Shanghai Composite trades 0.3% lower, and the smaller cap Shenzhen Composite is
down just 0.2%. Meanwhile in Hong Kong the Hang Seng is down 0.9% on regional
In South Korea the Kospi has a loss of 1.4%, and in Taiwan
the Taiex trades 0.4% lower.
In Southeast Asia markets are mixed with Singapore’s Straits
Times falling 0.2%, but Malaysia’s KLCI rising 0.2%.
USD Dominance As Powell Indicates No Concern Over Yields
The U.S. dollar rallied Thursday against a basket of rival
currencies after Fed Chairman Jerome Powell indicated he has no concerns over
surging U.S. Treasury yields. Instead he is focused on the long term goals of
2% inflation and maximum employment as specified by the Fed mandate.
Powell went as far as saying he would only become concerned
over Treasury yields if they were part of a more volatile or disorderly market
Market participants took these comments to mean Treasury
yields would be left to rise as the economic recovery in the U.S. takes hold,
and as the pandemic begins to fade.
Thursday’s results were that the USD Index jumped to a
three-month high, the EUR/USD fell near the lows f 2021, and the USD/JPY surged
to an eight-month high. All these came as 10-year Treasury yields went from
1.47% prior to Powell’s speech to 1.55% after.
The EUR/USD closed below its 100-day moving average and is
threatening to break below the 1.1952 intraday low hit earlier this year.
Adding fuel to the downward move in the pair is the fact that the euro zone is lagging
the U.S. in the pace of COVID-19 vaccinations. Additionally, euro zone retail
spending unexpectedly plunged in January, while U.S. retail sales surged in
response to stimulus.
Meanwhile the USD/JPY put in its largest daily percentage
move in two months, jumping nearly 100 pips higher and halting only as it
reached the psychological resistance of the 108.00 level. Next stop for the
pair is likely the 61.8% Fibo level at 108.23.
The GBP is the only currency that didn’t succumb to USD
U.S. Daily Market Review
U.S. stocks largely dropped today after Federal Reserve Chair Jerome Powell failed to guarantee that theat the Fed would preserve surging bond yields and inflation expectations in hand with initial estimate.The S&P-500 slipped 2.5%, wiping out earlier gains, while the Dow Jones Industrial Average slid 560 points. The Nasdaq Composite lost 3%.Apple declined around 2%, while Tesla tumbled 5.7%. U.S. mortgage rates stand around historic lows for months and contributed to the housing market entered into solid recovery to above pre-pandemic levels.Freddie Mac, which is the government-owned mortgage holder, announced that the 30-year fixed rate mortgage has secured around 0.6 % points to 3%.U.S. government-bond prices retreated after Federal Reserve Chairman Jerome Powell announced that the central bank’s current policy stance is appropriate.
European Daily Market Review
European markets advanced with shares in London leading the region. The FTSE-100 added 0.93% while France's CAC 40 surged 0.35% and the German DAX secured 0.29%. The pan-European Stoxx-600 slipped 0.6% in early trade, with basic resources falling 3.5%.Lufthansa marked a smaller-than-predicted net loss in the fourth quarter but registered a full-year loss of 6.7 billion-euro ($8.1 billion) in 2020. Euro zone bond yields tumbled after a global bond sell-off a day earlier that spooked markets.The blue-chip FTSE 100 index slid 0.5%, with mining stocks, including Rio Tinto.The Moscow Exchange seen a record inflow of 883,400 new private investors in February. The exchange estimates a 600,000 brokerage accounts to open per month, which could raise its number of retail clients to 15 million by year-end.