8 June 2020

Good Morning All…

Global stock markets and bonds in Africa are rallying despite evidence that the worst of the coronavirus pandemic is still to come.

On Friday the JSE All-Share firmed up 2.85% to 54,722.38 points, gaining 8.40% for the week, and the Top-40 index 2.79% as global markets cheer better than expected U.S jobs data.
The U.S added 2.5-million jobs in May, something which came in a total surprise vs. the consensus of 7.5-million job losses amid cuts in the labour market given Covid-19 pandemic. It was on Wednesday that the local currency broke through R17/$ for the first time in more than two months, having to trade R16.88/$ by the close of trading. The local currency has gained 2.90% against the greenback in 5 days, and this morning powering ahead at R16.80/$. The Yield on 10-year govt rand bonds rose 20.5 bps to 8.943%.

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While the JSE is likely to follow from stronger Asian markets this morning at the opening, the IG futures are indicating a softer opening as the futures are 115 in the red.

European markets marched ahead to close stronger on Friday as the US economy posted a record number of job losses in one month, only to be followed by a record number of jobs gains in the following month.
By the end of trading: the benchmark Stoxx 600 added 2.48%, the FTSE100 2.25%, alongside a 3.36% advance for the German Dax, while Paris’ CAC-40 gained 3.71%. Today is Trinity Day (othordox) in the UK, no settlement.

The U.S markets skyrocketed on Friday with the Dow soaring more than 800 points as U.S. stocks close in on pre-pandemic levels. Labour Department said that the nation’s jobless rate fell to 13.3 percent – a far cry from the 19.5 percent analysts had predicted – a significant improvement from the 14.7 percent recorded in April. Much of the employment gains were among sectors the pandemic hurt the most, including leisure and hospitality, education, construction and retail.

Dow futures rise 45 points, or 0.20%, this morning as markets are headed into a Fed week. This coming Wednesday, the Federal Reserve Bank is set to release updated policy statement on and first set of economic projections since December. Although investors aren’t expecting the central bank to cut back rates, they may be eager to garner clues from policy makers after Friday’s jobs report produced a stunning 2.5 million increase in payrolls in May. The S&p 500 futures advancing 86 points, 2.68%, this morning.

Asian markets rose in early trading Monday, following better-than-expected U.S. jobs numbers Friday and an extension of oil-production cuts by OPEC and its allies on Saturday.

Crude-oil futures are rising after OPEC+ agreed to extend a production cut of nearly 10 million barrels of oil a day through the end of July. Brent Crude 1.68% firmer at $43.01, with WTI light sweet at $40.02, 1.29% up.

Japan’s Nikkei was up 1.2% while Hong Kong’s Hang Seng Index advanced 0.3%. The Shanghai Composite rose 0.3%, while markets in Australia were closed for a holiday – Queen’s Birthday.