Japanese stocks may be plagued by virus fears, with the Topix also seen down 0.8% today, but Asian stocks elsewhere are faring better on the session.
Chinese equities are trading higher, with the Hang Seng up a little over 1% and the Shanghai Composite also marginally higher by 0.4%, mirroring the more positive mood reflected in US futures ahead of European morning trade.
S&P 500 futures are up 0.5%, Nasdaq futures up 0.9%, and Dow futures up 0.3%.
That is setting up a more positive open for Europe as well, with futures trading higher.
There is a general enthusiasm for German stocks despite the recent set back in terms of COVID-19 across the eurozone. Taking a look at the seasonals we have the following data from April 06 – April 30 over the last 10 years.
The DAX has been helped higher by the run up last month in Volkswagen stocks as it makes a move for the electric car market. In fact the rising DAX futures the day after further lockdowns were announced in France was an important affirmation that investors are happy to keep buying German stocks even with an impending third wave of infections.
The average gain has been +2.63% and the maximum profit was +7.81% last year. The only year of loss was in 2015 with a drop of -5.52%. The win ratio is 90% and you can see further breakdown here of the max drop during those periods. Aside from the year of loss in 2015 the largest draw down was -3.54% in 2014. So, the pattern is skewed to the upside for the DAX.
These stats come courtesy of the team at Seasonax.
The only area of concern is further lockdowns across the eurozone. However, it hasn’t held the DAX back so far, so perhaps investors are just content to keep looking to the time when the virus is finally under control. Any return back down to 1460 would offer good value to buyers and provide a key area to define and limit risk. The upside surprise would be if there was a sudden increase in the speed of vaccinations across the eurozone. So, two way risks here along with the strong seasonals.
After the more upbeat mood in US equities yesterday, European indices have some catching up to do following the Easter break since last Friday.
The early gains belie the more measured risk mood so far today though, with US futures pulling back slightly after yesterday’s stellar advance. S&P 500 futures and Dow futures are down 0.2% while Nasdaq futures are keeping flatter with Treasury yields a touch lower.
That is keeping the dollar steadier and major currencies little changed so far on the day.
The Nikkei clipped the 30,000 mark for the first time in just over two weeks yesterday but failed to hang on above that as a stronger yen from overnight trading, among other factors, weighed on the index. The Topix also closed 1.5% lower on the day.
Elsewhere, Chinese equities are still struggling somewhat with the Shanghai Composite down 0.2% despite more upbeat PMI data from earlier. That said, better economic prospects may prove to be a double-edged sword as it reaffirms fears of policy tightening
German Dax closes at a new record. France’s CAC just off all time highs
The European major indices are ending the session higher with the German Dax closing at a record level. France’s CAC is stalled just ahead of its all time high today.
A snapshot of the levels shows:
German Dax, +0.7%
France’s CAC, +0.59%
UK FTSE 100, +0.35%
Spain’s Ibex, unchanged
Italy’s footsie MIB, +0.25%
France’s CACs all time high is up at 6111. The high price reached 6106.12 today. The German Dax reached a new all-time high of 15110.92.
In other markets as London/European traders look to exit:
Gold is up $20.60 or 1.21% at $1728.20.
Silver is up $0.35 or 1.45% at $24.77
WTI crude oil futures are up $0.56 or 0.91% at $59.70. The remains between the high price of $60.83 and the low price of $58.91 as OPEC+ meet
Bitcoin relatively unchanged at $59,027 (up about $70)
a snapshot of the US stock market is showing:
S&P index up 34.85 points or 0.88% at 4007.73. The index is above the 4000 level for the first time ever
NASDAQ is up 197 points or 1.48% at 13443
Dow is up 132 points or 0.40% at 33114
In the US debt market, yields continue to move lower:
2 year 0.154%, -0.6 basis points
5 year 0.8945%, -4.4 basis points
10 year 1.675%, -6.6 basis points
30 year 2.34%, -7.0 basis points
The USD open the day mixed but mostly higher at the start of the NY session. As London/European traders look to exit, the USD continues to weaken and stands just behind the CAD as the weakest of the majors. Lower yields are pushing the green back lower. Gold is also a negative for the dollar.
The jobless claims for worse than expected, but the four week moving average trend more to the downside. The market PMI data came in as expected (marginally higher than the preliminary). The ISM manufacturing data is much better than expectations.
The euro’s 3% drop in the month sapped some of those gains for foreign investors but it was still a great month.
On the quarter:
UK FTSE 100 +4.3%
German DAX +9.4%
French CAC +9.4%
Italy MIB +11.0%
Spain IBEX +6.5%
The story of the year so far is the botched eurozone rollout of vaccines and resurgent cases plus lockdowns. Yet the numbers in the equity market tell a different story. The euro is down about 4% ytd versus the dollar.
For the fiscal year of 2020/21, the Nikkei gained by 54.2% – the biggest climb in the index since the fiscal year of 1972/73
The Topix is also seen shedding 1% so there’s not much window dressing going on in Japanese stocks despite being the end of the fiscal year. On the month itself, the Nikkei is seen trading higher by 0.7% though.
Elsewhere, the Hang Seng is seen down 0.4% while the Shanghai Composite is also marked lower by 0.6% so far on the day.
US futures are keeping more tepid with little change observed, trading near flat levels to start European trading. That despite higher Treasury yields once again, with 10-year yields up nearly 3 bps to 1.73% as we get things going.