Stocks 4 Breakfast

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U.S. stocks dip, commodities mostly higher

U.S. stocks dip, commodities mostly higher
The NASDAQ put on about 100 points within an hour of opening, but it gave up this and more to finish 0.5% or 50 points lower at 9185 points.
May 20, 2020 Tags: Stocks for Breakfast

The S&P/ASX 200 (XJO) surged 99 points or 1.8% to 5560 points on Tuesday, its highest close since mid-March.

Tourism related stocks were back in favour as indications emerged that there may be a clinical breakthrough in the development of a coronavirus vaccine.

Strength in commodities such as iron ore and oil had a marked impact on our blue-chip miners and oil producers, with the energy and materials sectors contributing substantially to yesterday’s rally.

However, it could be a different story today following weakness in overseas markets and a late session sell-off in the US sparked by doubts regarding the development of a coronavirus vaccine.

The ASX SPI200 Futures suggests that most of yesterday’s gains could be erased with the index down 83 points to 5491 points.

Notwithstanding this fairly grim outlook, our miners could demonstrate resilience as the iron ore price continued to make good ground overnight, pushing up towards the US$100 per tonne mark.

There was also strength across all of the key base metals, in particular nickel which is close to reclaiming a two month high, having stacked on more than 10% in less than a month.

24 hours

Similar to Australia, Asian markets were in full flight yesterday with the Nikkei 225 gaining 1.5% or 300 points to close at 20,433 points.

The Hang Seng surged 1.9%, up more than 450 points to 24,388 points.

The Shanghai Composite was up 0.8%, closing at 2898 points.

UK and European markets led the turn in sentiment with the FTSE 100 falling 46 points or 0.8% to close at 6002 points.

The CAC 40 shed 40 points or 0.9%, closing at 4458 points.

The DAX showed some resilience, gaining 16 points to close at 11,075 points.

After Monday’s 900+ point gain, the Dow looked set for a day of consolidation, hovering in the vicinity of the previous day’s close of 24,597 points.

However, in the last hour of trading the index gave up 380 points to finish 1.6% lower at 24,207 points.

The S&P 500 shed more than 1% or 31 points to close at 2923 points.

The NASDAQ put on about 100 points within an hour of opening, but it gave up this and more to finish 0.5% or 50 points lower at 9185 points.

As negative sentiment emerged, the gold price made its move, finishing up 0.8% at US$1748 per ounce.

The renewed uncertainty was also evident in the CBOE Volatility Index which increased from about 28 points to 30.5 points in the last two hours of trading.

After hitting a high of nearly US$36 per barrel, the Brent Crude Oil Continuous Contract trailed off late in the day to close at US$34.50 per barrel.

Looking at the big picture though, it is important to note that it has now gained 80% in the space of a month.

On the macro front, skilled vacancies data will be released today, providing further insight into Australia’s employment situation.

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ASX futures drop 20 points as Wall Street fades

MSCI’s gauge of world stocks lifted overnight despite a late sell-off on Wall Street as investors decided to take risk off the table ahead of a news conference of US President Donald Trump on Friday about China.


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