Market Talk – February 24, 2020

ASIA:

President Trump has arrived today in India for a two-day visit.  He met Prime Minister Narendra Modi today in his home state of Gujrat and inaugurated the world’s largest cricket Stadium in Ahmedabad. Addressing a huge crowd at a “Namaste Trump” event at Motera Stadium, President Trump has outlined the success story of India in the last two decades of this century. He said, “Since the turn of the century, the size of the Indian economy has grown over six times in size.” He also said that United States “loves” India and is “loyal” to India.

India has confirmed the news of a gold discovery in the northern state of India Uttar Pradesh after a government official said on Saturday that fields with reserves of more than 3,000 tonnes of gold ore had been found. A government official told Reuters that about 3,000 tonnes of gold ore had been found in two areas in the region, adding that concentration level of gold in the area was about 3 grams per tonne of ore.

China’s Premier Xi Jinping has told that China’s economy cannot stand being on hold for much longer. Xi said in a televised address this weekend that it is unavoidable that the novel coronavirus epidemic will have a considerable impact on the economy and society, but the economy cannot be paused for long. Shanghai stocks fell by 0.3% on Monday.

Some countries outside China experienced a massive spike in infections and others reported their first case. The virus has reached more than 30 other countries and territories, and is spreading in Europe and the Middle East. South Korea now has the most cases of the virus outside China, with more than 800. Fears are rising in the Middle East too. Iran has confirmed 43 coronavirus cases, including eight deaths. Lebanon, Israel, Kuwait and Afghanistan have also reported cases. The global death toll now stands at more than 2,600, while more than 79,000 people have been sickened.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 closed
  • Shanghai decreased 8.44 points or -0.28% to 3,031.23
  • Hang Seng decreased 487.93 points or -1.79% to 26,820.88
  • ASX 200 decreased 160.70 points or -2.25% to 6,978.30
  • Kospi decreased 83.80 points or -3.87% to 2,079.04
  • SENSEX decreased 806.89 points or -1.96% to 40,363.23

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00111 or -0.17% to 0.66139
  • NZDUSD increased 0.0008 or 0.12% to 0.6347
  • USDJPY decreased 0.3010 or 0.27% to 111.2950
  • USDCNY increased 0.0065 or 0.09% to 7.0358

Precious Metals:

  • Gold increased 34.94 USD/t oz. or 2.13% to 1,680.11
  • Silver increased 0.3055 USD/t. oz or 1.66% to 18.7289

Some economic news from last night:

New Zealand:

Retail Sales (QoQ) (Q4) decreased from 1.6% to 0.7%

Retail Sales Quarterly Vs. Year Ago (Q4) decreased from 4.5% to 3.3%

Credit Card Spending (YoY) increased from 3.5% to 3.7%

Some economic news from today:

Singapore:

CPI (YoY) (Jan) remain the same at 0.8%

EUROPE/EMEA:

Today the seventh death due to the coronavirus occurred in Italy where towns are beginning to go on lockdown. At the time of this writing, 229 cases have appeared in Italy, specifically in the northern regions. Twelve towns hosting over 50,000 citizens are now under a complete lockdown to prevent the virus from spreading. Residents have been asked to stay home from work and school, businesses are closed to the public, and the government is recommending that social contact be kept to a minimum.

WikiLeaks whistleblower Julian Assange appeared in a London courtroom this Monday for day one of his extradition hearing. Using his journalistic platform, Assange published classified government information that included potential war crimes carried out by the US in Iraq and Afghanistan. Assange is now accused of 18 counts of criminal charges including espionage, conspiring to hack government computers, and putting US national security at risk. If convicted, Assange could face up to 175 years in prison.

The family of British teenager killed in a collision with Anne Sacoolas, the wife of a US diplomat, is urging the UK not to extradite Julian Assange unless Sacoolas is extradited to the UK. Despite clear wrongdoing, Sacoolas was given diplomatic immunity and faced no charges for the murder. US Secretary of State Mike Pompeo denied Britain’s plea to extradite the diplomat’s wife. Now, the lawyer for the family is accusing the US of “not behaving like an ally.”

The major Europe stock markets had a negative day today:

  • CAC 40 decreased 237.84 points or -3.94% to 5,791.87
  • FTSE 100 decreased 247.09 points, or -3.34% to 7,156.83
  • DAX 30 decreased 544.09 points or -4.01% to 13,035.24

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00147 or 0.14% to 1.08567
  • GBPUSD decreased 0.00229 or -0.18% to 1.29281
  • USDCHF decreased 0.0005 or -0.05% to 0.9770

Some economic news from Europe today:

Germany:

German Business Expectations (Feb) increased from 92.9 to 93.4

German Current Assessment (Feb) decreased from 99.2 to 98.9

German Ifo Business Climate Index (Feb) increased from 96.0 to 96.1

US/AMERICAS:

Today marked the third steepest drop in the Dow Jones throughout the index’s 124-year history. The index dropped 1,031.61 points or -3.56% to 27,960.8 amid fears that the coronavirus is becoming a global pandemic. US indexes in general closed beneath 3.5% on Monday, collectively performing at their worst level in nearly two years. On the Dow, UnitedHealth experienced the steepest decline of -7.84%, followed by American Express (-4.97%), and Cisco (-4.96%). Unsurprisingly, cruise lines experienced a sell off this Monday after Carnival (-9.43%), Norwegian (-9.35%), and Royal Caribbean (-8.95%) all saw notable losses.

President Donald Trump was warmly greeted in India by Prime Minister Narendra Modi and 125,000 Indian citizens at an event declared “Namaste Trump.” Both world leaders had words of praise for one another. “India-US relations are no longer just another partnership, it’s a far greater and closer relationship,” Modi announced to the large crowd. Trump called Modi an “exceptional leader” as well as a “true friend.” Although negotiations are in the early stages, the US and India are currently planning a large trade deal. India has already agreed to purchase $3 billion worth of US military helicopters.

This Monday, the two-week standoff between environmental and Indigenous activists came to an end after Canadian police removed railway blockages and arrested protesters. The barricades brought rail traffic in Canada to a near standstill and resulted in the temporary layoff of 1,400 railway workers. The $4.98 billion oil pipeline expansion is expected to continue.

US Market Closings:

  • Dow declined 1,031.61 points or -3.56% to 27,960.80
  • S&P 500 declined 111.86 points or -3.35% to 3,225.89
  • Nasdaq declined 355.31 points or -3.71% to 9,221.28
  • Russell 2000 declined 50.51 points or -3.01% to 1,628.10

Canada Market Closings:

  • TSX Composite declined 280.79 points or -1.57% to 17,562.74
  • TSX 60 declined 16.82 points or -1.58% to 1,046.04

Brazil Market Closing:

  • Bovespa declined 904.82 points or -0.79% to 113,681.42

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 2.5853 USD/BBL or -4.84% to 50.7582
  • Brent decreased 2.6734 USD/BBL or -4.59% to 55.6238
  • Natural gas decreased 0.0727 USD/MMBtu or -3.81% to 1.8340
  • Gasoline decreased 0.0602 1USD/GAL or -3.66% to 1.5855
  • Heating oil decreased 0.0903 USD/GAL or -5.36% to 1.5975
  • Top commodity gainers: Gold (2.13%), Silver (1.66%), Bitumen (3.85%), and Steel (0.93%)
  • Top commodity losers: Crude Oil (-4.84%), Heating Oil (-5.36%), Natural Gas (-3.81%), and Brent (-4.59%)

The above data was collected around 11:36 EST on Monday.

BONDS:

Japan -0.06%(-2bp), US 2’s 1.27% (-8bps), US 10’s 1.37%(-10bps); US 30’s 1.84%(-8bps), Bunds -0.49% (-0bp), France -0.24% (-4bp), Italy 0.97% (+3bp), Turkey 12.08 % (+27bp), Greece 1.01% (+5bp), Portugal 0.18% (-3bp); Spain 0.21% (-3bp) and UK Gilts 0.55% (-2bp).

 

  • US 3-Month Bill Auction decreased from 1.545% to 1.505%
  • US 6-Month Bill Auction decreased from 1.510% to 1.440%
  • French 3-Month BTF Auction increased from -0.596% to -0.587%
  • French 6-Month BTF Auction decreased from -0.587% to -0.589%
  • French 12-Month BTF Auction decreased from -0.582% to -0.591%