Maseru Securities Market

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Global Market Review

 

WEEKLY MARKET COMMENTARY: EQUITIES

19/06/2020

 

United States

  • US markets were down on Thursday open.
  • Equities in the US edged lower on Thursday open as a rise in corona virus infections in more than a dozen US states prompted concerns that restrictions on business and social activity may need to be re-imposed.
  • The number of Americans filing for unemployment benefits edged down last week, the Labor Department said, though applications remained historically high at 1.5 million. New jobless claims have eased as states allowed businesses to reopen and employers recalled workers, adding some glimpse of hope that the US economy may be rebounding.
  • US retail sales rebounded by a record 17.7 per cent in May as American consumers began spending and states gradually reopened their economies following the pandemic lockdowns. The 17.7 percent increase is more double the 8 percent forecast, thereby giving stocks a boost despite the caution coming from possibility of an earlier second wave of Covid-19.
  • Housing starts, a measure of new-home construction, climbed 4.3% in May, though they fell short of the jump that economists expected to see.
  • CBOE VIX, a gauge of traders’ expectations for turbulence in US stocks remained high at 33.79 on Thursday market open.
  • NASDAQ Composite, S&P 500 and Dow Jones Industrial Average were down at 9928.92, 3113.49 and 26041.35 respectively on Thursday open.

Europe

  • European stock markets are heading south after erasing earlier gains in the past two days.
  • The decision by Bank of England to expand its QE by £100 billion and keep the rates steady did little to help markets to erase losses due to fears of a second wave of Covid-19 pandemic.
  • On Politics, investors kept a close eye on rising tensions in the Himalayas between China and India after 20 Indian soldiers were killed in the worst clash in decades sending fears to the already shaky market. Furthermore, Germany warned other EU members to prepare for a no-deal Brexit, due to differing positions and too short time for an agreement before December.
  • UK’s FTSE 100, German DAX, French CAC 40 and Stoxx 600 were at 6219.73, 12262.33, 4940.6 and 362.98 respectively on Thursday close.

South Africa

  • ­The JSE tracked global markets down this week.
  • SA’s main stock index retreated on Thursday ignoring the recently announced lockdown easing.
  • On Wednesday, President Ramaphosa announced the easing of level 3 lockdown to reopen hotels, casinos, personal care and sit-down restaurants under strict conditions. This saw travel and leisure index advancing more than 20 percent to its highest in three months.
  • Stocks of pharmaceuticals giant – Aspen jumps on the JSE to their highest since November 2018, getting boost from promising drug that has been shown to reduce fatalities in critically ill corona virus patients.
  • Both South African and Emerging markets CDS spread ticked up slowly – indicating increasing market fear.
  • All major JSE indices edged lower on Thursday. JSE All share index, Resources index and Financials index ended at about 53864.81, 27909.21 and 27157.62 respectively.

 Data source: Bloomberg

 

 

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