Asian Daily Market Review
Asian markets are trading broadly higher once again on
Thursday morning, with mainland China continuing to lead the way higher for the
region. The continued strength comes after China reported inflation data, with the
producer price index slipping 3% on a year-over-year basis, while the consumer
price index gained 2.5%.
Mainland China’s Shanghai Composite is trading 0.6% higher,
and the smaller cap Shenzhen Composite is leading the region as it’s advancing
1.5%. Over in Hong Kong the Hang Seng has a 0.5% gain and is trading off its
best levels of the session.
In Australia the S&P/ASX 200 is gaining momentum and
trades 0.9% heading into the afternoon in Sydney. The big four banks are
helping with the gains as they trade higher in the range of 0.4% to 1.1%.
Miners are also doing particularly well today, with BHP trading 2.2% higher and
Rio Tinto adding 3.1%. In the gold mining space Evolution Mining is 4% higher,
while Newcrest Mining adds 2.4%.
In Japan the Nikkei is trading 0.2% higher, while the Yen
remains tightly range-bound. Shares of Softbank Group have rebounded strongly
from previous session losses and are trading 4.8% higher today. Sony is also up
by 1.1%, but Toyota shares are falling 0.5%.
In South Korea the Kospi is trading up by 0.5%, and in
Taiwan the Taiex has a 0.5% gain as well.
Southeast Asian markets are mixed however as Singapore’s
Straits Times Index is bucking the rising trend across the region and has a
0.3% loss, while Indonesia’s Jakarta Composite trades 0.2% higher, and the KLCI
in Malaysia is holding to a 0.1% gain.
U.S. Banks Set To Kick Off Earnings Season Next Week
Next week earnings season will kick off, with the first
major reports coming from the banking sector. Results aren’t expected to be
pretty, but analysts are hoping for some bright spots that will help maintain a
sense of cautious optimism for the sector, which has been a poor performer over
the past months of economic stress due to the coronavirus.
Some of the optimism over the sector is that the current
struggles are not the banks fault, unlike during the financial crisis of 2008.
That means this event will primarily cause an earnings issue, not a balance
sheet issue. And that will make a recovery for the banks easier and faster.
The banks least exposed to low interest rates are the ones
most favored by analysts right now. That includes Morgan Stanley, Bank of
America, JPMorgan Chase, and Citigroup. Goldman Sachs is considered a weaker
player after it stumbled during last month’s bank stress tests, and Wells Fargo
has already cut its dividend, making it one of the weaker players in the
banking sector as well.
Trading activity and capital markets exposure should help
some of these banks maintain some of their profits this quarter, since the
capital markets have been extremely busy. That should lead to a good deal of
Even with the rising capital markets related revenues
profits are expected to fall sharply. But investors can remain optimistic and
look for the names that should benefit if the U.S. economy remains on a steady
road to recovery in the second half of 2020. Analysts continue to advise buying
strong names on dips.
U.S. Daily Market Review
U.S. stocks are still without a strong direction today, while mainland Chinese shares extended a gaining path streak for a seventh consecutive day.The United States announced little more than 60,000 new Covid-19 cases. As a matter of fact, this is registering a new record for new cases reported in a single day.The S&P-500 advanced in early trading before paring those. The Nasdaq Composite inclined 0.4%. The Dow Jones Industrial Average is partly static.New York City public schools are not planning to fully reopen this fall as the city tries to keep the coronavirus epidemic under control, according to Mayor Bill de Blasio.The city has a whole 1.1 million students.United Airlines Holdings Inc. is expected to lay off around 36,000 workers. Additionally, the company is likely to extend the worker cuts in August. This was reported by the Wall Street Journal.
European Daily Market Review
European markets retreated this morning after rallying coronavirus cases in parts of the world continue to cast doubt over the possibility of global recovery.The pan-European Stoxx 600 slipped 0.6% by late morning.International Monetary Fund (IMF) Chief Economist Gita Gopinath reported that many countries may need to restructure their debt in the aftermath of the pandemic which resulted in economic crisis.Deutsche Bank has been affected $150 million fine by the New York financial regulator over its relationship with notorious sex offender Jeffrey Epstein.The German economy has been affected by coronavirus crisis, with economic output contracting by 2.2% in the first quarter.German exports are expected to drop around 15% this year and will only recover slightly in 2021. Exports could advance by a single-digit percentage next year, by 7% if the situation improves significantly.
EUR/GBP Into A Static Mode
The Pound Sterling Euro (GBP/EUR) is into a static mode today.This resulted in a rate of Euro versus the GBP of 0.9006 GBP, which is a very minor shift of a gain of 0.00188 or 0.21% from the previous close of 0.89872.The daily trading range is from 0.8974 GBP to 0.9009, while the trading volume is 78.983K. Moreover, the GBP was left largely flat. Now the focus is on the British Chancellor Rishi Sunak who is likely to indicate in the plan of the government next initiatives.The Chancellor could report changes fighting against job losses in the UK.In addition, Mr. Sunak could dedicate borrowing to levels not seen since World War Two.As a matter of fact, the British economy has lost little over 25% in March and April.Furthermore, the single currency is around the same levels versus the GBP the Pound despite upbeat estiamtes from one of the bloc’s largest economies.
Gold Prices Slipped
Gold retreated some ground this morning during the Asian hours but is still above the $1,800. This is happening as the new cases of COVID-19 cases are still rising on a global scale. Presently, the precious metal trades at $1798.02, which is small incline of $3.67 or 0.20% from the previous close of $ 1794.35.The daily trading range is from $1791.29 to $1800.39, while the trading volume is 54.181K.Moreover, COVID-19 infections are still advancing on a global scale with almost 11.8 million cases as of July 8, according to Johns Hopkins University data. The U.S. infections jumped above the 3 million mark. Meanwhile, Congress’ $2 trillion economic rescue plan to fight against COVID-19 is expected to end on July 31.Several limitation measures were re-introduced in Asia. In many countries including Australia and Hong Kong.
Asian Daily Market Review
Asian markets are heading mostly higher on Wednesday
morning, despite the WHO saying that deaths from the coronavirus are likely to
begin rising again as cases continue to escalate around the world. That
forecast is based on the fact that there is a lag of several weeks between an
increase in case numbers and an increase in the death count since it takes time
for patients to become so ill that they die.
Mainland China is leading gains across the region for a
third session, with the Shanghai Composite trading 0.5% higher, while the
smaller cap Shenzhen Composite is up by 0.4%. Meanwhile in Hong Kong the Hang
Seng has a gain of 0.4% as well, with investors seemingly unconcerned over the
rising number of arrests taking place following the passage of national
security laws by mainland China.
In Japan the Nikkei is now 0.1% higher after opening with a
loss. Investors were understandably rattled early in the day by the overnight
losses on Wall Street, but seem to have recovered their confidence. Shares of
Softbank Group are falling for the first time in days, giving up 1.8% on profit
In Australia the S&P/ASX 200 has a loss of 0.1% after
trading briefly into positive territory. Meanwhile the Kospi in South Korea is
slightly higher by less than o.1%, while Taiwan’s Taiex is gaining 0.6%.
In Southeast Asia markets are also broadly higher as
Malaysia’s KLCI has jumped 0.8% in early trade, while the Straits Times in
Singapore is up by 0.4%, and Indonesia’s Jakarta Composite is flat at the open.
Walmart Is Taking On Amazon
It was a down day on Wall Street as fears of another
lockdown in the U.S. weighed on many names, particularly in the travel and
leisure space. And even though the Dow Industrials fell 1.5% there was one
component company that saw its stock soar 6.8% higher. That company was
Walmart, and the gains were part of the shift back to names considered to be
sheltered from the spike in COVID cases in the U.S.
What’s really driving shares higher is a report that Walmart
will be launching a rival to the Amazon Prime offering sometime in July. The
new subscription service will be called Walmart+ and is said to cost $98 a year
– making it slightly less expensive than Amazon Prime.
Benefits being rumored from Walmart+ are same day delivery
of groceries and other products, discounts on gas from Walmart stations, and
early access to product deals.
As the largest U.S. retailer by sales, with over 11,500
physical stores all across America, Walmart stands to make a huge splash with
its new offering.
Tuesday’s move has put Walmart’s stock solidly into positive
territory for 2020. After a huge rally following the March rout in the markets
shares of Walmart have been sliding steadily lower since mid-April. This news
could be what the stock needs to reverse its slide.
Analysts are bullish on the stock, with 27 of 35 analysts
covering the stock calling it a strong buy or buy, 7 calling it a hold, and
just 1 calling it a sell. The average price target is $135.39, and it closed
Tuesday at $126.95.
U.S. Daily Market Review
Wall Street’s major indexes dropped today after S&P 500’s longest trend of rallies gains this year.This comes as most traders and investors are concerned about the jump of the new coronavirus infections.At 10:00 a.m. ET, the Dow Jones Industrial Average tumbled 208.12 points, or 0.79%, at 26,078.91.The S&P 500 declined 11.52 points, or 0.36%, at 3,168.20, and the Nasdaq Composite retreated 6.22 points, or 0.06%, at 10,427.43.U.S. hiring rallied to a peak in May and layoffs decreased as some businesses reopened. There are some signals of better labor market have been overshadowed by a resurgence in COVID-19 cases.The Labor Department reported that its monthly Job Openings and Labor Turnover Survey, or JOLTS, hiring secured 2.4 million jobs to 6.5 million. This represents the peak mark since the government started tracking the series in 2000. The yield on the benchmark 10-year Treasury note partly dropped 0.663% and the yield on the 30-year Treasury bond was also retreated 1.423
European Daily Market Review
European markets are into a solid retreat today with shares in Germany losing the most. The German DAX fell 1.33% while London's FTSE-100 declined 1.17% and France's CAC-40 dropped 1.10%.European stocks retreated from a one-month high marked yesterday after Germany announced lower-than-estimated industrial data.The Stoxx Europe 600 Index tumbled 1.1% as of 10:18 a.m. in London, with all 19 industry groups lower. Technology and real estate shares led losses, while autos outperformed. Inflation in Austria could drop to 0.8 % this year hurt by a steep drop in the oil price and weaker demand due to the coronavirus pandemic.The euro zone economy could enter into more dramatic loss this year and recover at a lower pace in 2021 than previously thought, according to predictions by the European Commission.
The USD Advances
The USD surged this morning during the European trading hours.The greenback is reversing earlier drops as traders sided with the safe haven as the recovery in German industrial production came weaker than initially estimated in May.Presently, the Euro versus the USD stands little lower. The common currency trades at $1.1287, which is a minor decline of $0.00218 or 0.19% from the previous close of $1.13091.The daily trading range is from $1.1281 to 1.1332, while the trading volume is 80.834K.Furthermore, Germany's industrial production partly recovered in May, adding 7.8% on the month after falling by a revised 17.5% in April. Despite the recovery, production is still well below the levels recorded before the onset of the coronavirus economic issues.
Crude Oil Prices Fall
Oil prices lost some ground today, erasing earlier advances amid worries that the rally in coronavirus cases in the United States could negatively affect demand for oil.Now, oil trades at $40.045, which is an additional drop of $ 0.535 or 1.32% from the previous close of $40.580.The daily trading range is from $39.975 to $40.765, while the trading volume is 19.916K.In fact, 16 U.S. states announced massive advance of new COVID-19 case in the first five days of July, according to a Reuters.The state of Florida is re-introducing some limits on economic reopenings. Moreover, the states of California and Texas two of the biggest also reported solid surges in the cases.The Organization of the Petroleum Exporting Countries (OPEC)+ group limited its production by 9.7 million barrels per day (bpd) for a third month in July.
Asian Daily Market Review
Asian markets were set to follow U.S. markets higher on
Tuesday, but instead are looking mixed as the trading session moves into the
lunch hour and afternoon in several areas of the region.
Mainland China is building on gains from the prior session,
with the Shanghai Composite up by 1.3%, while the smaller cap Shenzhen
Composite has a 2.5% surge higher. Meanwhile the Hang Seng in Hong Kong is
struggling to hold onto opening gains and has a slight lead of less than 0.1%.
In Japan the Nikkei is leading losses for the region as it
trades 0.6% lower. Softbank Group is bucking the falling trend and extending
its rally with a solid gain of 3.5%, but both Sony and Toyota are trading 1.2%
lower. At the same time shares of Nintendo are 2.4% higher, but Family Mart is
down by 2.2% and Fast Retailing has a 1.4% loss.
In Australia the S&P/ASX 200 is hanging onto a 0.1% gain
heading into the afternoon in Sydney. Despite global banks rallying overnight,
Australia’s big four banks are lower today. Shares of ANZ are down 0.6%, NAB
has a loss of 0.8%, Westpac has fallen 0.6%, but Commonwealth Bank has a slight
gain of less than 0.1%.
In South Korea the Kospi is trading 0.4% lower, largely due
to a 1.6% drop in shares of index heavyweight Samsung Electronics, while Taiwan’s
Taiex has a loss of 0.3%.
Southeast Asian markets are broadly higher however, with
Malaysia’s KLCI up by 0.3%, the Jakarta Composite in Indonesia adding 0.2%, and
Singapore’s Straits Times Index adding less than 0.1%.
Cryptocurrency Daily Market Review
After a flat weekend cryptocurrencies have taken a decidedly
bullish turn Monday. Leading cryptocurrency Bitcoin (BTC) added 2.6%, but that
was the worst performance in the top ten cryptocurrencies as altcoins
outperformed for the day.
The best performance in the top ten group came from Bitcoin
SV (BSV) , which made an astounding 22.6% breakout move to eye up the $200
level for the first time in a month. There was no news out giving any reason
for the massive rally.
Otherwise coins all across the top ten were up by 5% or more
on the day as the week begins on a bullish note for the crypto markets. The
worst performance in the top ten altcoins was Cardano (ADA), which still gained
2.3% for the day.
The best gain in the top 100 altcoins was a 24.1% advance
from Aave (LEND), an ERC-20 token that calls itself the Money Market protocol.
It’s part of the popular decentralized finance (DeFi) niche, and allows for the
creation of money market platforms, and the lending and borrowing of decentralized
assets. The jump has nothing to do with Aave specifically and everything to do
with FOMO over DeFi protocols.
The worst drop of the day was an 8% loss for the 27th
ranked coin – Compound (COMP). This is another ERC-20 token and another DeFi
project. It’s very similar project to Aave in that it allows for lending tokens
and generating interest, but it also includes an element of user governance on
Overall 88 of the top 100 altcoins made gains on a very
Amazon Records A New Record High
Amazon hit a new record high of $3,057.04 Monday as the
e-retailer continues to outperform the broader market. The gain put Amazon’s
market cap over $1.5 trillion, and the move also put founder Jeff Bezos own net
worth over $60 billion.
Since the start of 2020 Amazon shares have gained 64.8% as
they’ve managed to surge out of the canyon created by the rout that took hold
of markets in March. Even with that outstanding gain some analysts believe
Amazon could add another 20% by the end of July.
The forecasts come as analysts claim that Amazon shares,
while not particularly cheap at these levels, are also not expensive. They
point out that the stock’s momentum is a strong tailwind in and of itself, and
that portfolio managers are likely to continue buying the stock to take
advantage of that momentum and to prop up their results.
There is also some feeling that given the strength and
momentum seen recently in the stock, analysts will need to begin hiking their
price targets ahead of the July 23 earnings release. These price target hikes
will feed more bullishness into Amazon shares and could easily see the stock
reaching $3,500 by the earnings release.
Speaking of earnings, investors will be interested to see
where those are headed, with Amazon saying it’s been spending roughly $4
billion on coronavirus related expenses such as protective measures in its
warehouses and wage increases for its associates. With its workforce ballooning
in the first half of 2020 by almost 25% to nearly 1 million associates, wage
expenses could cause some profit issues.