Market Commentary - April 19,2021

Posted by Kevin Jock on Apr 19, 2021 6:02:08 AM

    Major Wall Street benchmarks ended last week at all-time highs. The rotation out of tech is nothing but a fading memory, the Dow Jones post 3 consecutive weeks of gains and the S&P500 eye’s the 4,200 level. A culmination of an improving labour market, jolt in retail sales and more stimulus bolstered investor risk appetite as the case for economic reopening accelerates.

    European markets finished Friday strongly amid the EU hitting a milestone of administering 100m vaccine doses. Corporate earnings releases from carmakers have been upbeat alongside a tremendous surge in China’s quarterly GDP figure. Meanwhile the UK’s FTSE100 crosses the 7,000 level, unseen since February 2020.

    Mixed opening for Asia, with both Australia and Japan subdued whilst Hong Kong rallied 1% following China’s financial regulator coming out reassuring investors that Huarong Asset Management, a distressed loan manager, has ample liquidity. The company is seen as a gauge to China’s economic health, however had their shares suspended in March 31st after failing to report quarterly earnings.

    On the coronavirus front, ill-equipped nations struggle to fend off worsening outbreaks as the world hits a weekly infection rate record. Globally, cases have topped 5.2m people have been diagnosed with the virus with Brazil and India most affected. On the bright side, a silver lining from a new study that suggest, if you’ve been infected with COVID-19 before, a single dose of Pfizer and Moderna is need, especially during a time when distribution is constrained.

    Cryptocurrency mania hit a roadblock on Sunday, as bitcoin tumbled 15% to $56,440 after hitting a record high of $64,869 just a few days back. Recent momentum came amid Coinbase’s IPO valuing the company as high as $85.8bn, a market cap higher than the Nasdaq exchange itself. Rumors on Sunday began to circulate that the U.S. Treasury intends to crackdown on digital assets as a plan to tackle money laundering.

    Crude oil stabilizes around the $63 mark, the U.S. dollar unchanged ahead of central bank announcements this week and gold rose $13 to $1,776.

Market Commentary - April 16,2021

Posted by Kevin Jock on Apr 16, 2021 9:28:50 AM

    Global indices rallied on Thursday after surprisingly better than expected retail sales and unemployment claims data out of the U.S. Nasdaq recovered previous days losses, the S&P500 settled at fresh record highs and so too did the Dow Jones. Geopolitical tensions between the U.S. and Russia heightened after President Biden ordered fresh sanctions in retaliation for their interference in America’s elections and hacking into SolarWinds. The blacklist includes 32 entities and individuals, and 10 Russian diplomats.

    In Europe, notwithstanding recent COVID-19 and vaccination concerns, rosy earning reports have kept benchmarks upbeat as they followed their American counterparts to new all-time highs. The FTSE100 advances 1% but had yet to reach back to pre-pandemic highs, lagging European markets. Asia opened mix with Australia and Japan weaker whilst Hong Kong rallied, propelled by China’s double digit quarterly GDP data.

    Crude oil post 4 consecutive days of advances, rising by 50 cents yesterday to $63.30 following forecast revisions by the International Energy Agency lifting demand expectations by 230,000 barrels per day. The agency cited “fundamentals look decidedly stronger” as the main factor despite coronavirus still plaguing Brazil, Europe and India.

    The U.S. dollar ended flat yesterday with gold breaking out of consolidation to settle at $1,763. Bitcoin retreats to $61,500 following Coinbase’s IPO frenzy. Despite its already high valuation, renown tech innovation fund Ark Investment has bought 246M worth of Coinbase shares thus far.

Market Commentary - April 15,2021

Posted by Kevin Jock on Apr 15, 2021 8:49:42 AM

    Mixed result coming out of Wall Street with Nasdaq sharply declining 1%, S&P500 lower by 0.3% whilst Dow Jones ended in positive territory. Speaking at the Economic Club of Washington, Fed Chair Powell indicated the central bank would scale back bond purchases before considering any hawkish endeavour on the policy rate itself.

    Public confidence in COVID-19 vaccinations is waning in Europe as Denmark becomes the first country in the bloc to permanently suspend the use of AstraZeneca’s shot with Norway expected to announce their decision on Thursday. Amid Johnson & Johnson pausing their own roll-out, Brussels intends to fast-track delivery 50m doses of BioNTech’s COIVID vaccine in the next three months. Lack of upside scenario’s saw European benchmarks ended their sessions lower across the board.

    Improving labour market figures boosted Australia’s S&P200 1.3% higher, cyclical firms positioned to benefit from the global recovery ensured the Japanese Nikkei stay in positive territory and the Hang Seng slipped 1.2% intraday.

    Shrinking crude inventories beyond expectations helped boost oil prices higher by $2 to close at $62.73. Powell’s remarks yesterday put downward pressure on the U.S. dollar whilst gold fluctuates between $1,730 - $1,750.

    As bitcoin retraces from $64,800 to $62,300, the first public listing of a major cryptocurrency exchange saw Coinbase Global debut at $75.9bn with an open price of $381. Shares reached as a high as $429.54 before closing Wednesday’s session at $328.28, down $14 from open. Coinbase is considered the largest digital coin exchange in the U.S. encompassing 56m retail customers.

Market Commentary - April 14,2021

Posted by Kevin Jock on Apr 14, 2021 8:14:55 AM

    Wall Street shrugged off better than expected inflation figures as another vaccine manufacturer falls victim to recent inoculation concerns. This time arising from Johnson & Johnson’s vaccine as U.S. health authorities find a solid link to blood clotting in extreme circumstances. Nasdaq which prospered under the stay-at-home regime, outperformed shooting up 1.1%. S&P500 followed suit, up 0.3% whilst the Dow Jones ended the session in negative territory.

    Despite Johnson & Johnson delaying their planned rollout of its COVID-19 vaccine across Europe, benchmarks rose higher, particularly the French CAC breaking into new ground. Soaring yields of recent that eroded returns have since stabilised allowing inflationary risk to a take backseat.

    Australia and Hong Kong rallied on opened but Japan slipped as prefectures including Tokyo, Kyoto and Okinawa imposed tougher social distancing measures amid a fresh outbreak. Production delays and European Union export controls have crimped the country’s roll-out schedule.

    On the crypto front, bitcoin now has now surpassed $64,000 after gaining $4,000 since yesterday. Investor risk-appetite remains high as Nasdaq sets a reference price of $250 for the direct listing of Coinbase, where trading will start on Wednesday. Unlike most exchanges, Coinbase enforced strict regulatory compliance, allowing the firm to proper within the U.S.

    Overall risk-on sentiment saw the U.S. dollar lose ground, crude oil higher to just under $65 and gold appreciates $12 to $1,745. The Singaporean dollar gained 30 pips after the central bank left policy rates unchanged with overall outlook improving, citing better than expected economic growth indicators. Likewise, the RNBZ stood firm leaving rates at 0.25% and leaving the current level of QE unchanged. The central banked noted they would need time to observe how the newly introduced housing rules would impact economic forecast in their models.

Market Commentary - April 13,2021

Posted by Kevin Jock on Apr 13, 2021 8:36:59 AM

    Mixed start to Asia with the Hang Seng surging 1.5% on open as officials outlined phases to curb social distancing measures from as early as April 29th. Eateries, bars, and pubs will be allowed to table up to 12 patrons on the condition that staff and customers are fully vaccinated. Weaker business confidence data forced Australia’s S&P200 lower whilst the Nikkei rallied as much as 1% intraday.

    Wall Street held steady on light volumes as investors gear up for corporate earnings season ahead whilst the VIX index, an indicative of future volatility hovered at 13-month lows. Meanwhile, last night’s U.S. 10-year treasury auction was completed without a hitch in demand nor a spike in yields.

    Slow distribution and new waves of infections continue to weigh down European markets. Since AstraZeneca’s vaccine efficacy had been called into question on top of the risk of severe side-effects, China’s Sinovac has seemingly become collateral damage with the state media defending the shot following a Chinese senior health expert questioning the jab’s success rate.

    The yuan rallied to 6.5472 as speculation swirled that China will not be labelled a currency manipulator in the U.S. semi-annual foreign exchange report due Thursday, curtailing an already elevated geo-political tension. The U.S dollar unchanged against a basket of majors, gold fell $10 to $1,732 and crude fluctuates between $59 - $61.

    Bitcoin exuberance continued Monday with the cryptocurrency hitting a high of $61,214 as Coinbase’s IPO propels bullish sentiment forward, evident from Binance coin of Binance exchange soaring 18% in the last 24 hours.

Market Commentary - April 12, 2021

Posted by Kevin Jock on Apr 12, 2021 7:34:12 AM

    Asia-pacific stocks and overnight futures retreated on open following words of overnight optimism from the Federal Reserve Chairman. In an interview on 60-minutes Powell said the U.S. economy is at an “inflection point” with economic growth and job prospects stronger despite the risk of COVID-19.

    Australia’s S&P200 slipped 0.4% as Prime Minister refrained from setting new vaccination goals after AstraZeneca’s blot clot concerns, delaying the rollout. Meanwhile, the Japanese Nikkei followed suit after Yaskawa Electric, seen as a leading indicator for the manufacturing sector, failed to meet earnings expectations.

    China’s record $2.8bn antitrust violation fine on Alibaba Group spooked Hong Kong’s Hang Seng with the benchmark declining 1.4% on open. Previously turning a blind eye, Beijing as of late has stepped up scrutiny on deal-making and anti-competitive practices among technology juggernauts to ensure a chokehold on Chinese tech billionaires empires.

    Ahead of reporting season, Wall Street ended Friday with 3 consecutive weeks of advances. A plethora of fiscal and monetary stimulus alongside a successful vaccination program has spurred on positive sentiment. Still, company outlook surrounding President Biden’s corporate tax hike could dent expectations. Elsewhere, the bull run across European markets continued higher despite a lagging vaccination program offsetting growth prospect. In contrast, the FTSE100 ended the session lower even though on Monday non-essential shops and services will welcome back customers as lockdown restrictions ease.

    The dollar gained among a basket of majors, crude closed below $60 and gold at $1,743. Bitcoin back below $60,000 after surging to $61,000 over the weekend as investor exuberance gear up for Coinbase’s public listing, currently valued at $100bn pre-IPO.

Market Commentary - April 9, 2021

Posted by Kevin Jock on Apr 9, 2021 6:01:47 AM

    U.S. outlook has greatly improved in the past months with fears of overshooting inflation having subsided following two consecutive weeks of weaker unemployment claims figures and a Federal Reserve Chairman that has continuously reassured a commitment to dovish endeavours. Speaking in a virtual panel on Thursday, Jerome Powell described scenes of a substantial homeless encampment in downtown Washington, that despite improving headline economic figures, many American’s are still unemployed. Wall Street emerged a winner as benchmarks unanimously advanced, particularly the S&P500 recording fresh all-time highs.

    European markets remain relatively docile as current events between Fed’s dovishness, slow vaccinations, global minimum tax offset each other. Meanwhile, the FTSE100 posted a 56-point gain, settling beyond a major resistance level.

    Australia’s S&P200 fell on open as the government announced a halt to AstraZeneca’s vaccine for under 50’s following enough evidence proving a linkage between the shot and blood clots. Likewise, the Hang Seng down 1.1% after China’s CPI data overshot market consensus. Prospects of overheating would entail Beijing’s wrath in tightening both fiscal and monetary measures. The Japanese Nikkei bucked the trend, gaining intraday.

    Crude oil edged higher to just below $60 after Saudi Arabia stressed though OPEC plans to increase production over the next three months to July, the group remains nimble should economic forecast deviate. With treasury yields stabilizing, the dollar lost ground against majors. Gold breaks above to settle at $1,755 after a technical double bottom and bitcoin back above $58,000 after following State Street cements a deal to lend its tech to a cryptocurrency trading venue.

Market Commentary - April 8, 2021

Posted by Kevin Jock on Apr 8, 2021 6:07:37 AM

    Wall Street poised to benefit from a two-prong support between fiscal and monetary stimulus as the S&P500 and Nasdaq continues to edge higher. In a White House speech on Wednesday, President Biden promoted his $2.25tn infrastructure plan as a counter against China’s increasing dominance on the global table with resistance from Republicans over planned tax hikes. Meanwhile FOMC meeting minutes reveal in the face of upgraded growth and employment projections, the central bank will remain dovish until in 2023, keeping the $120bn asset purchase program per month unchanged.

    Following reviews by the U.K. and E.U. health regulators, a link between AstraZeneca’s vaccine and blood clots has now been formally determined. Findings complicate an already underwhelming vaccination program, as the most likely response would be to suspend the shot, slowing down schedules even more. News weighed by European benchmarks as many remained unchanged. In contrast, Brits are gearing up for life after lockdown with the FTSE100 gaining 1.1%.

    Whilst the S&P200 and Hang Seng rallied on Asia open, the Nikkei slipped as Osaka declared a state of emergency yesterday after daily infections hit a high of 878. The services industry in Japan continue to take the brunt of COVID-19.

    The U.S. dollar gained across the board as elevated treasury yields remain a juicy prospect. Crude finds support at $59, gold closes at $1,737 and bitcoin falls $2,000 to $56,000 following concerns that China could use the cryptocurrency to undermine the U.S. The theory depicts China’s preference for two global reserve currencies as opposed to just the American greenback. China’s attempt to raise the yuan into that role has thus far failed, however the global acceptance of bitcoin may fill that role.

Market Commentary - April 6, 2021

Posted by Kevin Jock on Apr 6, 2021 7:09:32 AM

    Weak start to Asia session with most benchmarks slipping on open. Though Australia’s S&P200 gapped up 1% following Easter break, the index has retreated half a percentage point thus far during intra-day trading. Nonetheless, as the Australia government announces a travel corridor with New Zealand, the tourism industry is one step closer towards their long-awaited recovery.

    Dismal household expenditure data led the Japanese Nikkei lower, giving up gains from the previous 2 trading days. Trade risk abounds with China as Japanese Prime Minister Suga meets with President Biden later in April. China’s foreign minister has publicly warned Japan to stay “objective and rational” on matters pertaining to Hong Kong and Xinjiang.

    Wall Street continues to soar higher on exceptional ISM services PMI data despite a hike in corporate taxes proposed by President Biden last week and a global minimum tax on foreign profits outlined by Treasury Secretary Yellen yesterday. Biden’s plan would see corporate tax rates rise from 21% to 28% alongside a 21% global minimum tax to target tax havens.

    European and UK markets remained closed on Monday whilst UK Prime Minister Boris Johnson announced easing to lockdown measures starting April 12th.

    The U.S. dollar slumped against majors as Janet Yellen’s swatted away concerns for inflation and reassured investors yields will continue to remain low in the medium term. Meanwhile, crude declines $2.50 to just below $59 on the prospect of greater global supply from Iran once U.S. eases sanctions. Gold’s currently at $1,735 and bitcoin below $59,000.

Market Commentary - April 5, 2021

Posted by Kevin Jock on Apr 5, 2021 6:07:34 AM

    Good Friday and Easter holiday leaves global benchmarks subdued if not closed for the long weekend. Wall Street futures pointed lower on Monday open after consecutive days of rallies last week following President Biden’s unveiling of a $2.25tn infrastructure spending spree anticipate to well position tech firms for future growth, especially the R&D grants and broadband upgrades.

    To the east, China’s central bank sound warning bells as it urges lender to rein in credit supply by keeping new loans in the 1st quarter at or below the same level as last year. Guidelines were introduced by PBOC in the face of a 16% growth in new-loans, risking overheating the economy.

    Lockdown fatigue becomes more prevalent across Europe as the bloc faces a resurgence in COVID-19 infections, a rising death toll and a disappointing vaccination roll-out.

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