- Stocks Advance as Mood Remains Buoyant After Data
Stocks rose and bonds stayed under pressure as Chinese data kept investors upbeat on the global economy following strong U.S. hiring figures.
Equities climbed from Sydney to Hong Kong, and U.S. and U.K. index futures also advanced. Chinese shares were lower even though producer prices showed robust demand in Asia’s largest economy. The yen was near a two-month low as investors assessed the latest poor approval ratings for Japan’s Prime Minister Shinzo Abe, while Bank of Japan Governor Haruhiko Kuroda said the economy was turning toward moderate expansion and reiterated that policy could be adjusted as needed. Oil rose.
With global stocks close to all-time highs, investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth. U.S. employers added the most jobs in four months in June, though wage increases were sluggish, according to data Friday.
“The weaker wage growth buys the Fed more time to wait for inflation signals to pick up before increasing rates which supports the current market view of balance sheet announcement in September followed by a rate hike in December,” Stephen Innes, senior trader at Oanda Corp., wrote in a note Monday. “Ultimately the Goldilocks NFP is a win-win for the US dollar and global equities.”
The Group-of-20 summit made little headway on dominant foreign policy issues such as North Korea’s escalation of tensions. Meetings between U.S. President Donald Trump and the leaders of South Korea, Japan and China ended without a clear consensus about how to curb North Korea’s nuclear ambitions.
These are the main moves in markets:
- The yen fell 0.2 percent to 114.13 per dollar as of 1:17 p.m. in Tokyo.
- The Bloomberg Dollar Spot Index was little changed, as were the euro and pound. The Canadian dollar was down 0.1 percent after its 0.8 percent jump Friday.
- The Korean won was up 0.4 percent at 1,149.80 per dollar, while the Indian rupee gained 0.1 percent to 64.52. The Mexican peso climed 0.5 percent to 18.01 versus the greenback.
- S&P 500 Index futures were up 0.2 percent and FTSE 100 futures rose 0.5 percent.
- The MSCI Asia Pacific Index rose 0.5 percent, the most since June 29, after hitting a five-week low Friday.
- Japan’s Topix Index added 0.6 percent. Australia’s S&P/ASX 200 Index gained 0.3 percent, as did South Korea’s Kospi Index. Hong Kong’s Hang Seng Index rose 1.1 percent, its biggest gain this month.
- The Shanghai Composite Index lost 0.2 percent. China’s producer price index rose 5.5 percent on-year in June and the consumer price index was up 1.5 percent, the same as in May and in largely line with expectations.
- The yield on 10-year Treasuries was steady at 2.39 percent after rising 24 basis points in the past two weeks. The yield on 10-year Australian government bonds rose one basis point to 2.75 percent.
- WTI crude climbed 0.8 percent to $44.57 a barrel following its 2.8 percent slide Friday.
- Gold was down 0.1 percent at $1,211.13 an ounce.
Global Oil Drops as Coronavirus Infections Rises in India and Other Nations
Oil prices declined on Monday during the Asian trading session amid rising concerns that the surge in coronavirus in India and other nations could force regulators to enforce stronger measures at curbing its spread and eventually affect economic activity and drag on demand for commodities like crude oil.
Brent crude oil, against which Nigerian oil is priced, declined by 22 cents or 0.33 percent to $66.55 per barrel at 8:19 am Nigerian time on Monday, following a 6 percent surge last week.
The US West Texas Intermediate (WTI) declined by 18 cents or 0.29 percent to $62.95 per barrel, after it gained 6.4 percent last week.
The decline was after India reported 261,500 new coronavirus infections on Sunday, taking the country’s total cases to almost 14.8 million, second to only the United States that has reported over 31 million coronavirus infections.
“With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi.
Businesses in Japan believed the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for an additional slow down in economic activity.
While Japan has had fewer COVID-19 cases when compared with other major economies, concerns about a new wave of infections are fast rising, according to responses in Reuters poll.
On Tuesday, April 20, 2020, Hong Kong will suspend all from India, Pakistan and the Philippines because of imported coronavirus infections, authorities stated in a statement released on Sunday.
India’s COVID-19 death rose by a record 1,501 to hit 177,150.
Global Markets Near Record Peaks and Will Get Stronger: deVere CEO
As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.
Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.
“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.
“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.
“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.
“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”
However, the CEO’s bullish comments also come with a warning.
“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.
“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”
Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”
Refinitiv Expands Economic Data Coverage Across Africa
Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.
Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.
Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.
Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades. As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”
Refinitiv Africa economic data coverage:
- Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
- Content is sourced from national statistical offices, central banks and other key national institutions
- The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
- International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent
Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.
Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.
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