Outlook for the day
The inconsistent performance in the overnight US session has been followed up by a mixed early morning tone in the Asian region. The marginally improved tonality of early morning trading in the US futures market will to a degree initially cushion selling pressure at the commencement of today’s session with the JSE-TOPI and JSE-ALSH exhibiting marginal losses at most. Short term metrics for both indices retain a bullish tone indicating that current trading exposure may be held with appropriate stop loss discipline on such trading positions.
• Vaccine supplies
• a cryptocurrency milestone and
• a semiconductor bellwether.
Here’s what’s moving markets.
Cryptocurrency exchange Coinbase Global soared above a $112 billion valuation in its Nasdaq trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board. The massive valuation dwarfs more traditional financial firms — including Nasdaq itself. Coinbase shares closed at $328.28, down 14% from the opening price after earlier climbing as high as $429.54. For some employees, the start-up has brought a lightning-fast rise to vast wealth. Former Google executive Surojit Chatterjee joined 15 months ago, a move worth more than $700 million.
The Federal Reserve will likely taper off its bond purchases before considering raising interest rates, Chair Jerome Powell said. “We will reach the time at which we will taper asset purchases when we’ve made substantial further progress toward our goals from last December, when we announced that guidance,” Powell said Wednesday. “That would in all likelihood be before — well before — the time we consider raising interest rates.” Policy makers will wait until inflation has reached 2% sustainably and the labour-market recovery is complete before considering lifting rates, and the combination is unlikely to happen before 2022, he said. Their forecasts last month signalled rates being held near zero through 2023.
Europe's vaccination program got a boost with Pfizer and BioNTech's move to increase deliveries to the bloc this quarter. The European Union is, however, still exporting more shots than it is administering, highlighting the risk of a backlash against the faltering inoculation push. Still, the bloc's health chief maintained its target of vaccinating 70% of adults by summer and vaccine passports are moving closer, a boon for the battered travel sector. In the U.S., the delay to Johnson & Johnson's vaccine will hit an already slow roll out to minorities and hesitancy to get a shot, though falling, remains a worry.
The cryptocurrency world had a watershed moment on Wednesday with the public listing of Coinbase, the exchange that will provide investors with a new avenue to access the rise of Bitcoin and its ilk. The company's valuation soared over the $100 billion mark, dwarfing that of the exchange operators providing the venue for its listing, before ultimately slipping back and taking the shine off the rally in Bitcoin itself leading up to the listing. The question of which crypto name will be next to market is now bubbling up, even if the Coinbase listing attracted the ire of some crypto zealots.
Chips and Takeout
There will be plenty more company news to chew over on Thursday. Taiwanese chip industry behemoth TSMC will report results amid the shortages and increasing competition in the semiconductor industry. We'll also have the first update from food delivery firm Deliveroo following a rough first couple of weeks as a public company. That follows U.S. banks JPMorgan Chase and Goldman Sachs kicking off the sector's earnings season on Wednesday with big beats in their investment banks, boosted by the meme stock and blank-check company trends.
U.S. President Joe Biden's administration is said to be poised to take action against Russian individuals and entities, including imposing sanctions, as retaliation for alleged misconduct over the SolarWinds hack and efforts to disrupt the U.S. election. That follows a call between Biden and Russian President Vladimir Putin earlier this week, when Biden said the U.S. would "act firmly" to defend its national interests and proposed a summit between the two. It also comes amid a White House push to shore up the U.S. power grid and as U.S. spy chiefs cited Russia and the rise of China among their top concerns.
Goldman Profit Rises Sharply on Strong Trading, Deal Making
Goldman Sachs Group Inc. reported record profit and revenue in the first quarter, benefiting from a turbocharged market and an economic recovery. Goldman posted a quarterly profit of $6.84 billion, or $18.60 a share, on revenue of $17.7 billion. Both measures were up significantly from a year ago when the bank posted profit of $1.2 billion on revenue of $8.7 billion and exceeded the expectations of analysts polled by FactSet, who forecast profit of $10.22 a share on revenue of $12.56 billion.
Trading revenue rose 47% from a year ago to $7.6 billion, thanks to a 31% increase in fixed-income, currency and commodity trading revenue and a 68% increase in stock-trading revenue.
European and U.S. stock futures were mixed heading into Thursday, following a slight dip in Asia after China’s central bank refrained from adding more liquidity after a late dip for tech stocks in the U.S. Today, Turkey’s new central bank governor holds his first policy meeting, after his predecessor was ousted after a bigger-than-expected increase in rates. On the economic data front, inflation numbers are due from France, Germany and Italy. Oil prices jumped to the highest in a month on Wednesday and are holding steady, as shrinking crude stockpiles in the U.S. fuelled hopes for a recovery in global demand.
Latest Rates Spot Move
USD/ZAR 14.39 V
GBP/ZAR 19.81 V
EUR/ZAR 17.25 V
CHF/ZAR 15.60 V
The content is for general information purposes only
Any information herein is not intended, nor does it constitute financial, tax, legal or nvestment advice. The material is considered marketing communication and does not contain and should not be construed as containing guidance or recommendations, or an offer of solicitation for any transactions in financial instruments. All rates quoted are the interbank rates at the time of publishing and are shown for indicative purposes only. Important to note that rates will vary depending on the amount and product bought and sold.
References: PMK Investment committee, exchange4 free, Momentum Investment Consulting, Momentum securities, RMB Globalmarkets Swissquote, eToro, Currency Partners, Bloomberg, Business Day