Market Talk – April 17, 2020

ASIA:

The total number of coronavirus cases in India has gone up to 13,387, while the death toll has risen to 437, according to the latest figures from the Health Ministry. In the past 24 hours, 1,007 fresh COVID-19 infections and 23 deaths were reported.

India’s gold consumption in 2020 could fall as much as 50% from a year ago to the lowest level in nearly three decades as a nationwide lockdown has closed jewelry stores during key festivals and the wedding season. The drop in consumption by the world’s second-biggest gold buyer could limit a rally in global prices, which hit a more than seven-year high earlier this month. The fall in demand could also narrow India’s trade deficit and support the faltering rupee.

China’s economy contracted 6.8% according to official data released on Friday. The GDP contraction in January-March quarter may lead to permanent income losses, reflected in bankruptcies across small companies and job losses.

European governments struggling with the fallout from the COVID-19 pandemic are hardening their positions toward China as suspicions grow over the level of transparency in the coronavirus’s country of origin. French President Emmanuel Macron accused Beijing of not being upfront over its handling of the epidemic. In the UK, Prime Minister Boris Johnson’s plans to involve Chinese tech giant Huawei Technologies Co. in the nation’s next-generation mobile network may fall prey to mounting opposition.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 607.06 points or 3.15% to 19,897.26
  • Shanghai increased 18.56 points or 0.66% to 2,838.49
  • Hang Seng increased 373.55 points or 1.56% to 24,380.00
  • ASX 200 increased 71.20 points or 1.31% to 5,487.50
  • Kospi increased 57.46 points or 3.09% to 1,914.53
  • SENSEX increased 986.11 points or 3.22% to 31,588.72

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00114 or -0.18% to 0.63594
  • NZDUSD increased 0.00243 or 0.40% to 0.60335
  • USDJPY decreased 0.53 or -0.49% to 107.47
  • USDCNY increased 0.00481 or 0.07% to 7.08118

Precious Metals:

  • Gold decreased 26.3 USD/t oz. or -1.53% to 1,687.90
  • Silver decreased 0.279 USD/t. oz or -1.81% to 15.1470

Some economic news from last night:

China:

Fixed Asset Investment (YoY) (Mar) increased from -24.5% to -16.1%

GDP (QoQ) (Q1) decreased from 1.5% to -9.8%

GDP (YoY) (Q1) decreased from 6.0% to -6.8%

Chinese GDP YTD (YoY) (Q1) decreased from 6.1% to -6.8%

Industrial Production (YoY) (Mar) increased from -13.5% to -1.1%

Chinese Industrial Production YTD (YoY) (Mar) increased from -13.5% to -8.4%

Retail Sales (YoY) (Mar) increased from -20.5% to -15.8%

Chinese Retail Sales YTD (YoY) (Mar) increased from -21.09% to -19.64%

Chinese Unemployment Rate decreased from 6.2% to 5.9%

South Korea:

Unemployment Rate (Mar) increased from 3.3% to 3.8%

Singapore:

Non-Oil Exports (YoY) (Mar) increased from 3.10% to 17.60%

Non-Oil Exports (MoM) (Mar) increased from -4.70% to 12.80%

Trade Balance increased from 1.090B to 3.180B

Some economic news from today:

Japan:

Capacity Utilization (MoM) (Feb) decreased from 2.6% to -1.8%

Industrial Production (MoM) (Feb) decreased from 1.0% to -0.3%

Tertiary Industry Activity Index (MoM) decreased from 0.3% to -0.5%

India:

Reverse REPO Rate decreased from 4.00% to 3.75%

FX Reserves, USD increased from 474.66B to 476.48B

EUROPE/EMEA:

European markets pushed to higher levels today from the open and remained so throughout the day.

The Mayor of London Sadiq Khan spoke out against the UK government’s timeline, suggesting that they must ask the EU for an extension given the world has essentially stopped over the coronavirus.

Belgium MEP Guy Verhofstaft lashed out in the European parliament, taking aim as European commission head Ursula von der Leyen for doing nothing to ease the pain. He questioned her openly, asking what she was waiting on. However, he had already left the parliament before she could answer.

The EU has set out guidelines for member states who wish to develop a coronavirus tracking app. As the tracking app is in the advancement of public health, EU data privacy laws can be bypassed.

As per a report by the United Nations Economic Commission for Africa, Africa could see 3,00,000 deaths from the coronavirus under the best-case scenario. Under this worst-case scenario, Africa could see 3.3 million deaths and 1.2 billion infections. Under the best-case scenario with intense social distancing, the continent could see more than 122 million infections.

The major Europe stock markets had a green day today:

  • CAC 40 increased 148.85 points or 3.42% to 4,499.01
  • FTSE 100 increased 158.53 points, or 2.82% to 5,786.96
  • DAX 30 increased 324.24 points or 3.15% to 10,625.78

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00053 or 0.05% to 1.08703
  • GBPUSD increased 0.0008 or 0.06% to 1.24963
  • USDCHF decreased 0.00152 or -0.16% to 0.96736

Some economic news from Europe today:

UK:

Car Registration (YoY) (Mar) decreased from -2.9% to -44.4%

Car Registration (MoM) (Mar) increased from -46.7% to 220.0%

Italy:

Italian Car Registration (YoY) (Mar) decreased from -8.8% to -85.4%

Italian Car Registration (MoM) (Mar) decreased from 4.7% to -82.6%

Italian Trade Balance (Feb) increased from 0.545B to 6.085B

Italian Trade Balance EU (Feb) increased from -0.39B to 1.02B

Germany:

German Car Registration (MoM) (Mar) decreased from -2.6% to -10.3%

German Car Registration (YoY) (Mar) decreased from -10.8% to -37.7%

France:

French Car Registration (YoY) (Mar) decreased from -2.7% to -72.2%

French Car Registration (MoM) (Mar) decreased from 25.0% to -62.6%

Euro Zone:

Construction Output (MoM) (Feb) decreased from 3.97% to -1.51%

Core CPI (MoM) (Mar) increased from 0.4% to 1.1%

Core CPI (YoY) (Mar) decreased from 1.2% to 1.0%

CPI (YoY) (Mar) decreased from 1.2% to 0.7%

CPI (MoM) (Mar) increased from 0.2% to 0.5%

CPI ex Tobacco (MoM) (Mar) increased from 0.2% to 0.5%

CPI ex Tobacco (YoY) (Mar) decreased from 1.1% to 0.7%

HICP ex Energy & Food (YoY) (Mar) remain the same at 1.2%

HICP ex Energy and Food (MoM) (Mar) increased from 0.4% to 1.0%

US/AMERICAS:

“We are not opening all at once, but one careful step at a time,” President Donald Trump stated in an address to the nation on Thursday. After April 30, individual states will have the ability to reopen their economies based on a specific set of criteria set by the federal government. The rollout will come in three phases. First, states must show a decrease in cases over a sustained period of time. Telecommuting will be encouraged, schools will remain closed, and groups of no more than ten will be permitted to assemble. Gyms and restaurants may begin to reopen if they can maintain the social distancing protocol. During the second phase, schools will reopen and non-essential travel will be permitted. During the final phase, vulnerable individuals may begin to resume public life but are encouraged to avoid large gatherings. Hospital and nursing home visitations will be permitted as well.

Corporate Amazon employees are planning an “online walk out” for next Friday to protest recent layoffs. The group Amazon Employees for Climate Justice organized the virtual protest after two of the group’s leading members were laid off after speaking out against the company. The protest is also aimed at shedding light over the possible mistreatment of Amazon warehouse employees. In addition to maintaining the extended breaks and $2 per hour pay increase granted to warehouse employees during the pandemic, the group is demanding that Amazon publish a list of confirmed COVID-19 cases at warehouses across the US.

The Small Business Administration (SBA) announced on Thursday that it is no longer accepting loan applications as they have run out of funding. Under the Paycheck Protection Program (PPP), the US government allocated  $349 billion in loans to small businesses struggling from the lockdown. The US defined any small business as a company with under 500 employees, which has caused a backlash from other business owners who say the government is only helping the most profitable businesses survive.

US Market Closings:

  • Dow advanced 704.81 points or 2.99% to 24,242.49
  • S&P 500 advanced 75.01 points or 2.68% to 2,874.56
  • Nasdaq advanced 117.78 points or 1.38% to 8,650.14
  • Russell 2000 advanced 51.01 points or 4.33% to 1,229.10

Canada Market Closings:

  • TSX Composite advanced 460.56 points or 3.31% to 14,359.88
  • TSX 60 advanced 29.09 points or 3.45% to 871.85

Brazil Market Closing:

  • Bovespa advanced 1,178.44 points or 1.51% to 79,990.29

ENERGY:

A joint statement by Russia and Saudi Arabia suggests that further cuts to the supply of oil are possible. WTI had a challenging day, declining more than 7%, whereas Brent lifted the price by 3%.

The oil markets had a mixed day today:

  • Crude Oil decreased 1.59 USD/BBL or -8.00% to 18.2800
  • Brent increased 0.75 USD/BBL or 2.70 % to 28.5700
  • Natural gas increased 0.044 USD/MMBtu or 2.59% to 1.7460
  • Gasoline increased 0.0032 USD/GAL or 0.42% to 0.7721
  • Heating oil decreased 0.0134 USD/GAL or -1.34% to 0.9855
  • Top commodity gainers: Ethanol (11.20%), Brent (2.70%), Natural Gas (2.59%), and Cocoa (3.40%)
  • Top commodity losers: Crude Oil (-8.00%), Platinum (-1.91%), Orange juice (-2.89%), and Coffee (-2.40%)

The above data was collected around 12.30 EST on Friday.

BONDS:

Japan 0.02%(+1bp), US 2’s 0.20% (-0bps), US 10’s 0.61%(-0bps); US 30’s 1.21%(+0bps), Bunds -0.48% (-0bp), France 0.03% (-2bp), Italy 1.84% (-2bp), Turkey 14.10% (-46bp), Greece 2.11% (+0bp), Portugal 0.99% (+0bp); Spain 0.82% (-1bp) and UK Gilts 0.30% (+0bp).