Global Fundamental Analysis 07/09/2020

OPENING CALL: The Australian share market is to open lower.

U.S. stocks warded off big losses with a late rally, but still settled lower. The yield on the 10-year Treasury note settled at 0.720%, ending a five-session streak of declines.

The U.S. dollar was little changed. Oil prices fell as demand concerns lingered. Gold prices settled lower, but rose after hours.

Overnight Summary

Market Quotes by TradingView

EACH MARKET IN FOCUS

Australian Market

Australian shares fell 3.1% to 5925.5, closing out a third straight red week for the first time since the coronavirus-led market panic peaked in March. The benchmark S&P/ASX 200 index followed a weak lead from U.S. stocks, sliding to its worst session since May 1.

US Market

U.S. stocks finished lower despite rebounding from their session lows as some investors took advantage of the market’s biggest dip in months.

Capping a dramatic two-day stretch of trading, the Dow Jones Industrial Average swung more than 850 points from its high to its low, leaving the blue-chip index down 0.6%, or 159 points, as of 4 p.m. ET. Similarly, the S&P 500 and Nasdaq Composite pared their losses, down 0.8% and 1.3%, respectively.

Commodities

Gold futures ended lower for a third straight session, logging a weekly loss of around 2%, as better-than-expected monthly U.S. employment data helped to strengthen the U.S. dollar.

December gold fell by $3.50, or 0.2%, to settle at $1,934.30 an ounce, the lowest finish for a most-active contract since Aug. 27, according to FactSet data.

Oil Futures

Oil futures declined, with the U.S. benchmark settling below $40 a barrel for the first time since early July amid concerns over demand, losses in the stock market, and strength in the U.S. dollar pushed prices to their lowest since July.

West Texas Intermediate crude for October delivery fell $1.60, or 3.9%, to settle at $39.77 a barrel on the New York Mercantile Exchange. November Brent, the global benchmark, lost $1.41, or 3.2%, at $42.66 a barrel on ICE Futures Europe. Both crude benchmarks settled at their lowest since July 9, based on the front-month contracts, according to Dow Jones Market Data.

Forex

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.1860 to lows near US$1.1780 and was near US$1.1840 at the US close. The Aussie dollar rose from lows near US72.20 cents to highs near US72.95 cents and was near US72.80 cents at the US close. And the Japanese yen fell from 106.10 yen per US dollar to JPY106.49 and was near JPY106.20 at the US close.

European Markets

European share-markets fell on Friday with the pan-European STOXX 600 index down by 1.1%. Technology led the falls, down by 1.7%. But banks rose 1.6% after two Spanish banks said they were considering a merger. Basic resources stocks rose 1.6%, underpinned by expectations of higher Chinese demand. The German Dax index slid 1.7%. The UK FTSE index lost 0.9%. But in London trade, shares in Rio Tinto rose by 1.6% and shares in BHP rose by 1.0%.

Asian Markets

Earlier Friday, Chinese stocks ended the session lower as the market weakened for the third straight day. The benchmark Shanghai Composite Index fell 0.9%, its largest one-day loss in over a week, to settle at 3355.37. Both the Shenzhen Composite Index and the startup-heavy ChiNext Price Index dropped 0.5%.

Japanese stocks fell from a six-month high, following a tech selloff on Wall Street. The Nikkei Stock Average dropped 1.1% to 23205.43. Investors are paying attention to powerful Typhoon Haishen, which is approaching Japan.

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