Tuesday, April 14, 2020

Asia Times: Asia equities gains amid signals that the US plans to reopen its economy with the number of new coronavirus infections plateauing

Tags
  • Dollar
  • Gold
  • Yen
  • Stocks
  • Oil
  • US earnings' season
  • Brent

04142020a

Market Recap: Asia equities gains amid signals that the US plans to reopen its economy with the number of new coronavirus infections plateauing

Major indices in the US were mostly lower on Monday as news of a historical production cut on oil output from oil producing countries failed to drive optimism in the market higher. Larger-cap technology stocks were the exception, pushing the Nasdaq higher on the day. It looks likely that stocks in the US were less volatile on Monday as investors wait on JP Morgan to kick start the earnings season to put a number on the impact the coronavirus outbreak has on companies.

In sector news, the consumer discretionary sector was the best performing among S&P500 sectors, rising 1.10% follower by the tech sector that inched higher by 0.20%. Among companies, Netflix, Amazon and AMD's shares were the best performing, surging 7.01%, 6.17% and 5.29% respectively on the day.

Indexes Daily Change (%) Net Change Closing Price
Dow Jones -1.39% -328.60 23,390.77
S&P500 -1.01% -28.19 2,761.63
Nasdaq +0.48% +38.85 8,192.43
*Source: Bloomberg

Meanwhile, the yen gained the most against the dollar among major currencies. Oil-related currencies were mixed against the greenback, with the Canadian dollar rising while the Norwegian krone fell as the market dismissed the 9.7mn barrel per day cut that was announced by OPEC+ and G20 oil producing countries on Sunday evening. The Australian dollar was the second-best performer, rising 0.52% against the dollar to 0.6382's level. The Aussie has gained 4.34% since the end of March, although is still down 8.85% YTD.

04142020b

Safe haven assets were mixed ahead of the earnings season as investors likely hedged some risk using traditional safe haven assets such as the Japanese yen and gold. Gold and the yen gained as a result while US Treasuries fell along with equities, signalling a fall in demand for bonds likely helped push gold past 1,700 to close at 1,705.34 as well.

Safe Haven Assets Daily Change (%) Net Change Closing Price
Gold +1.10% +18.69 1,715.34
Silver -0.97% -0.15 15.14
JPY +0.65% +0.70 107.77
*Source: Bloomberg
US Treasury yields Daily Change (bps) Yield (%)
2-Year +2.0 0.25%
10-Year +5.2 0.77%
30-Year +6.4 1.41%
*Source: Bloomberg

Oil was mixed, with Brent inching higher while WTI crude oil futures retreated 1.54% on Monday. The likely reason was that a production limit was already priced into the market, with Brent and WTI already up 30.23% and 12.51% since the end of March respectively. Oil traders are probably also wary that the 9.7mn barrel per day cut may not be enough to help curb the fading demand for oil, amid a spike in travel restrictions across the globe. Both Brent and WTI were more than 1% higher on Tuesday morning as of 8.03am (GMT +8) however.

Oil Futures Daily Change (%) Net Change Closing Price
Brent Crude +0.83% +0.26 31.74
WTI Crude -1.54% -0.35 22.41
*Source: Bloomberg

Asian stocks gained on Tuesday morning as multiple states in the US that are on lockdown were reportedly planning for reopening as the US starts to see the number of new infections peak. US President Donald Trump's statement that the US' social distancing efforts had succeeded and that the government was near completion in detailing a plan to reopen the US economy also likely helped boost equities in Asia. The Nikkei, KOSPI and ASX200 were all trading in the green in the first hour of Tuesday's trading session.

Asia Daily Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index +0.58% +109.78 19,153.18 8:31:05 AM
KOSPI Index +0.95% +17.37 1,843.13 8:51:00 AM
ASX200 Index +0.69% +37.29 5,424.60 8:51:05 AM
*Source: Bloomberg
US Futures Daily Change (%) Net Change Last Price As of (GMT +8)
Dow Futures +0.12% +29.00 23,345.00 8:03:32 AM
S&P500 Futures +0.15% +4.25 2,764.00 8:03:33 AM
Nasdaq Futures +0.34% +28.25 8,354.75 8:03:36 AM
*Source: Bloomberg

Earning reports to take note of for the day ahead includes (all timings in GMT +8):

  • JP Morgan Q1 2020 (7pm)
  • Wells Fargo Q1 2020 (8pm)
  • Johnson & Johnson Q1 2020 (Aft US market close)

Economic releases for the day ahead include (all timings in GMT +8):

  • China Mar Imports/Exports
  • IMF's World Economic Outlook (8.30pm)