Aug 19 2020 0
Today we'll focus on the latest events happenning around the world that can impact the market heavily.
A new record
US stocks completed the fastest-ever record turnaround after falling at least 20%, surpassing February's highs for the first time since the pandemic hit the financial markets. The dollar fell to its lowest level in more than two years, while Treasury Bonds rose in value. S&P 500 index futures were unchanged at the opening in Asia. The S&P 500 has risen 52% from its lowest level in March. Technology stocks have pushed the index above its record close on February 19 after failed attempts over the past three or four sessions. Shares of home builders also rose with a report showing that housing prices started to rise the most since 2016.
Asian futures markets are showing a quiet start when the Trump administration has warned that it will divest from Chinese stocks. Gold has returned over $2,000 / ounce. Contrary to the stock's positive moves, currency traders are worried about the unknowns in the coming months and their impact on the dollar. The correlation between currency volatility and stock volatility has fallen below zero this month, its lowest level since 2009.
Out of China
The US State Department is asking colleges and universities to divest Chinese stakes in their properties, and warned them in a letter Tuesday to anticipate more complex measures. about holding stocks. Keith Krach, Deputy Secretary for Economic Growth, Energy and Environment, wrote in the letter: “The US university board will be cautious to divest its stakes from the PRC companies. The United States as a potential result of improved listing standards could lead to delisting Chinese companies from US exchanges by the end of next year. US-China tensions are rising as US presidential elections are imminent: On Tuesday, President Donald Trump said he suspended trade talks last weekend with China and Beijing's Treatment for coronavirus is "unimaginable".
Big buy
Asia's richest man spent the first few months of the pandemic raising more than $20 billion by selling a stake in his tech venture. Right now, Mukesh Ambani is doing daring shopping. The Indian billionaire is looking to acquire several local online retailers to help expand product offerings as he races to build his e-commerce platform and compete with Amazon.com. Reliance Industries, Ambani's oil, gas, retail and telecommunications conglomerate, is in various stages of negotiation to either buy off or buy a stake in Urban Ladder - an online furniture vendor, Zivame, a manufacturer. lingerie maker and Netmeds - a drug supplier. However, there is no guarantee that the consideration will likely lead to an agreement.
Final payment
Goldman Sachs and Malaysia signed an agreement to finalize a $3.9 billion payment for the 1MDB scandal. The Bank of America formalized the deal on Tuesday and had to pay Malaysia $2.5 billion in cash within 10 days. The agreement reached in July is a key step towards resolving the scandal surrounding 1MDB, a Malaysian state fund at the center of global investigations of corruption and money laundering. The deal involves Goldman Sachs agreeing to pay $2.5 billion in cash and a guarantee to return $1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia. will reduce charges against the bank.
Libor’s replacement
Singapore is making its mark in a global effort to replace Libor, becoming one of the first countries to auction debt related to an alternative standard. On Tuesday, the Monetary Authority of Singapore sold 500 million SGD (366 million USD) of six-month bonds, outlining Singapore's average overnight rate (SORA). This country is applying SORA when it leaves the SGD Swap offer rate, using the London interbank rate to calculate. The move is part of a broader global effort to develop new benchmarks to replace Libor in late 2021, after European and US banks were found to have manipulated it in order to profit on their own.
