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Global Market Report - 14 April

Lex Hall  |  14 Apr 2020Text size  Decrease  Increase  |  
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Australia

The outlook for Australian stocks remains uncertain after a mixed session on Wall Street overnight, where investors turned their attention to a likely bleak first-quarter reporting season.

Signs of a flattening coronavirus curve in Australia could help the benchmark ASX/200 when it resumes after the Easter break on Tuesday, although the Dow and S&P 500 have fallen after last week's strong gains.

Amazon.com gains helped the tech-heavy Nasdaq gain ground as US companies prepare for a quarterly earnings season that is expected to be blighted by the coronavirus pandemic.

The Dow Jones Industrial Average fell 328.6 points, or 1.39 per cent, to 23,390.77, the S&P 500 lost 1.01 per cent and the Nasdaq Composite added 0.48 per cent.

Oil prices were also mixed as existing demand worries linger following a major production-cut deal inked by global producers.

The SPI200 futures contract rose 0.8 per cent to 5442.0 when it last traded on 9 April.

Gold, meanwhile, has soared to its highest in more than seven years as panicked investors scurried towards the safe-haven on fears of a coronavirus blow to the global economy.

The Australian dollar was buying 63.76 US cents at 8am, up from 62.29 US cents at the close of markets on Thursday.

Asia

China stocks dipped on Monday, as the country’s new daily coronavirus cases approached a near six-week high.

The Shanghai Composite Index dropped 0.5 per cent to 2,783.05 at the close, extending a 1 per cent decline a day earlier.

China’s blue-chip CSI300 index was down 0.42 per cent.

Japanese shares fell on Monday as investors worried about the impact of the coronavirus outbreak on corporate earnings, though stocks of key oil exploration firms rose after major producers finally agreed their biggest-ever output cut.

The Nikkei 225 was down 2.33 per cent.

Hong Kong was closed for Easter.

Europe

European markets were closed for Easter.

North America

The Dow and S&P 500 fell on Monday as US companies prepared to kick off a quarterly earnings season expected to be rough due to the coronavirus pandemic, while Amazon.com gains helped the Nasdaq end higher.

Stocks pared losses late in the day, with the Nasdaq registering its first three-day streak of gains since 12 February. Amazon.com gave the index its biggest boost, gaining 6.2 per cent as the retail giant said it would hire 75,000 more people amid a surge in demand for online orders.

The S&P banking subsector fell 4.1 per cent, with JPMorgan Chase & Co and Wells Fargo & Co set to report on Tuesday and analysts expecting a bleak outlook for the year.

Volume was lighter than usual with European and other markets still closed following Easter Sunday, but investors are also bracing for earnings news from companies, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

The Dow Jones Industrial Average fell 328.6 points, or 1.39 per cent, to 23,390.77, the S&P 500 lost 28.19 points, or 1.01 per cent, to 2,761.63 and the Nasdaq Composite added 38.85 points, or 0.48 per cent, to 8,192.43.

Volume on US exchanges was 10.93 billion shares, compared with the 14.80 billion average for the full session over the last 20 trading days.

“What you’re seeing at the end of the day is investors who are sitting with too much cash are buying on the dips,” said Dennis Dick, head of market structure and proprietary trader at Bright Trading in Las Vegas. “I think that trend continues unless the news flow gets predominantly worse.”

Some strategists said comments by New York governor Andrew Cuomo on Monday helped to ease some investor concerns. Cuomo said he believed “the worst is over” as hospitalisations appeared to be reaching a plateau in the worst-hit US state, adding that he would announce a coordinated plan on reopening businesses.

Aggressive US monetary and fiscal stimulus and early signs of a potential peaking in US coronavirus cases have helped stocks recover recently from their dramatic sell-off tied to the pandemic.

Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line Holdings tumbled as the US Centres for Disease Control and Prevention extended its “no sail order” for all cruise ships.

Ford Motor Co shed 3.9 per cent after the carmaker projected a quarterly adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.

The key Nikkei average dropped 0.8 per cent at 19,349.74 by the midday break on subdued activity.

is content editor for Morningstar Australia

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