Market Talk – August 24, 2020

ASIA:

China’s e-commerce and food delivery giants are reaping the benefits of an increasing number of consumers shopping online and businesses trying to digitize, trends accelerated by the coronavirus outbreak. Chinese players have recently reported strong earnings for the second quarter as lockdown rules in the world’s second-largest economy relaxed.

India is likely to see a surge in populist politics as it battles the world’s third-highest number of coronavirus cases, posing a key risk for companies whose fortunes are closely tied to the economy, according to JPMorgan Chase & Co published online report. The S&P BSE Sensex’s 12-month price-to-earnings ratio hit a record earlier this month after the gauge rebounded 45% from its March lows. That leaves little room for economic missteps and entails greater risk for cyclical stocks, particularly those whose fortunes track the wider economy.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 65.21 points or 0.28% to 22,985.51
  • Shanghai increased 4.96 points or 0.15% to 3,385.64
  • Hang Seng increased 437.74 points or 1.74% to 25,551.58
  • ASX 200 increased 18.40 points or 0.30% to 6,129.60
  • Kospi increased 25.24 points or 1.10% to 2,329.83
  • SENSEX increased 364.36 points or 0.95% to 38,799.08
  • Nifty50 increased 94.85 points or 0.83% to 11,466.45

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00013 or 0.02% to 0.71617
  • NZDUSD decreased 0.00121 or -0.19% to 0.65268
  • USDJPY increased 0.1770 or 0.17% to 105.99
  • USDCNY decreased 0.0073 or -0.11% to 6.91303

Precious Metals:

  • Gold decreased 13.75 USD/t oz. or -0.71% to 1,925.65
  • Silver decreased 0.16 USD/t. oz or -0.61% to 26.525

Some economic news from last night:

New Zealand:

Core Retail Sales (QoQ) decreased from 0.6% to -13.7%

Retail Sales (QoQ) (Q2) decreased from -1.2% to -14.6%

Retail Sales Quarterly Vs. Year Ago (Q2) decreased from 2.3% to -14.2%

Some economic news from today:

Indonesia:

Motorbike Sales (YoY) (May) increased from -79.30% to -56.40%

Singapore:

CPI (YoY) (Jul) increased from -0.5% to -0.4%

EUROPE/EMEA:

Britain’s economic recovery from the shock of the COVID-19 pandemic has gathered pace, data showed on Friday, but government borrowing rose past the 2 trillion-pound ($2.6 trillion) mark and fears of future job losses are mounting. Retail sales in July were 1.4% above year-ago levels and 3.0% above their level before the pandemic, the Office for National Statistics said. August’s preliminary composite PMI, which covers most businesses outside retail, hit its highest level since October 2013.

Germany’s health minister has suggested mandatory quarantine for travelers returning from high-risk areas, rather than testing for COVID-19 upon arrival. Authorities say the testing has pushed capacity to the limit. People returning to Germany could soon face a minimum five-day quarantine if arriving from areas abroad which the government deems high-risk, Health Minister Jens Spahn said on Monday

Saudi Aramco has reaffirmed its commitment to expansion in China after an erroneous report that it had pulled out of a $10 billion refining and petrochemicals project in the country. Last week, Bloomberg reported that the Saudi oil giant had decided to stop investing in the project in the northeastern province of Liaoning, which was announced last year during a royal visit to China, in partnership with local energy companies.

The major Europe stock markets had a green day:

  • CAC 40 increased 111.56 points or 2.28% to 5,007.89
  • FTSE 100 increased 102.84 points or 1.71% to 6,104.73
  • DAX 30 increased 301.74 points or 2.36% to 13,066.54

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00095 or -0.08% to 1.17864
  • GBPUSD decreased 0.00266 or -0.20% to 1.30634
  • USDCHF increased 0.00038 or 0.04% to 0.91189

Some economic news from Europe today:

UK:

Steel Production (Metric Ton) (Jul) increased from 499.40K to 515.00K

US/AMERICAS:

TikTok, under parent company ByteDance, took legal action against the US government to prevent efforts to ban the video-sharing app. A representative for TikTok said that the company does “not take suing the government lightly,” but they feel that have no choice but to take action.” President Trump signed an executive order earlier this August to ban the app under the pretense of national security. However, TikTok claims it was not granted the right to prove it’s innocence, as it maintains it is not sharing user data with the Chinese government.

Convalescent plasma has been approved as an innovative, albeit experimental, treatment for COVID-19. President Trump called the treatment a “breakthrough” in solving the coronavirus crisis. The treatment consists of transferring plasma from recovered patients to sick patients with the belief that the antibodies will help fight off the virus. The FDA also approved of the treatment but insists that additional trials are necessary to determine effectiveness.

Canada’s Conservative Party has chosen Erin O’Tooler, former cabinet minister, as the frontrunner to lead their party and challenge the Liberal Party under current Prime Minister Justin Trudeau. O’Toole surpassed Peter MacKay to become the party favorite. According to the Canadian Broadcasting Corp (CBC), Liberals would win 36.4% of the vote if elections were held today, while Conservatives would account for 29.9%. Liberals are concerned that O’Toole would fail to push the current climate change agenda adopted under the Trudeau administration and curb public services. Trudeau’s administration has been shrouded in controversy this year, and many believe his policies are

Brazil’s economy contracted by an estimated -9.4% on a quarter-on-quarter basis, according to analysts at Reuters. Analysts had anticipated a boost in trade due to currency depreciation, while most polled believe the emergency aid measures worked to avoid an even deeper contraction.

US Market Closings:

  • Dow advanced 378.13 points or 1.35% to 28,308.46
  • S&P 500 advanced 34.12 points or 1% to 3,431.28
  • Nasdaq advanced 67.92 points or 0.6% to 11,379.72
  • Russell 2000 advanced 15.99 points or 1.03% to 1,568.47

Canada Market Closings

  • TSX Composite advanced 108.79 points or 0.66% to 16,626.64
  • TSX 60 advanced 6.8 points or 0.69% to 997.79

Brazil Market Closing:

  • Bovespa advanced 776.66 points or 0.77% to 102,297.95

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.05 USD/BBL or 0.12% to 42.3900
  • Brent increased 0.64 USD/BBL or 1.44% to 44.9900
  • Natural gas increased 0.079 USD/MMBtu or 3.24% to 2.5140
  • Gasoline increased 0.0949 USD/GAL or 7.44% to 1.3696
  • Heating oil increased 0.0413 USD/GAL or 3.43% to 1.2471

The above data was collected around 16:50 EST on Monday.

  • Top commodity gainers: Natural Gas (3.24%), Gasoline (7.44%), Heating Oil (3.43%), and Cotton (1.98%)
  • Top commodity losers: Lumber (-2.88%), Bitumen (-1.47%), Coal (-1.75%), and Palm Oil (-1.56%)

The above data was collected around 17:00 EST on Monday.

BONDS:

Japan 0.03%(+0bp), US 2’s 0.15% (+0bps), US 10’s 0.64%(+0bps); US 30’s 1.35%(-1bps), Bunds -0.50% (+5bp), France -0.19% (+1bp), Italy 1.01% (+0bp), Turkey 13.92% (+34bp), Greece 1.09% (-0bp), Portugal 0.37% (+3bp); Spain 0.33% (+2bp) and UK Gilts 0.21% (+0bp).

 

  • US 3-Month Bill Auction decreased from 0.105% to 0.100%
  • US 6-Month Bill Auction remain the same at 0.120%