Market Talk – January 5, 2021

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ASIA:

India may achieve a growth of more than 9 percent in FY2023, the fund house predicts. This projection is higher than the 4.9 percent for 2022 (5.9 percent for 2021) projection for global growth by the International Monetary Fund (IMF). Discretionary consumption is picking up post-Covid and should sustain provided young individuals with rising incomes and aspiration levels continue to spend. Similarly, in terms of investment, there is scope in real estate; private sector investment is expected to pick up; and government spending on infrastructure development is expected to remain strong. Higher exports and more consumption, investment and capital expenditure (capex) on technology are expected to be growth drivers. Capex on technology and renewal still doesn’t have much a multiplier impact on the economy, the report states.

 

 

The major Asian stock markets had a mixed day today:

 

  • NIKKEI 225 increased 30.37 points or 0.10% to 29,332.16
  • Shanghai decreased 37.15 points or -1.02% to 3,595.18
  • Hang Seng decreased 382.59 points or -1.64% to 22,907.25
  • ASX 200 decreased 24.00 points or -0.32% to 7,565.80
  • Kospi decreased 35.27 points or -1.18% to 2,953.97
  • SENSEX increased 367.22 points or 0.61% to 60,223.15
  • Nifty50 increased 120.00 points or 0.67% to 17,925.25

 

 

The major Asian currency markets had a mixed day today:

 

  • AUDUSD increased 0.00184 or 0.25% to 0.72600

 

  • NZDUSD increased 0.00102 or 0.15% to 0.68250

 

  • USDJPY decreased 0.26 or -0.22% to 115.92

 

  • USDCNY decreased 0.0059 or -0.09% to 6.36935

 

Precious Metals:

 

  • Gold increased 9.63 USD/t oz. or 0.53% to 1,824.19

 

  • Silver increased 0.071 USD/t. oz or 0.31% to 23.101

 

Some economic news from last night:

 

Australia:

 

ANZ Job Advertisements (MoM) decreased from 9.9% to -5.5%

 

Japan:

 

Monetary Base (YoY) decreased from 9.3% to 8.3%

 

Some economic news from today:

 

India:

 

Nikkei Services PMI (Dec) decreased from 58.1 to 55.5

 

Japan:

 

Household Confidence (Dec) decreased from 39.2 to 39.1

 

Singapore:

 

Retail Sales (MoM) (Nov) increased from 0.7% to 2.5%

 

Retail Sales (YoY) (Nov) decreased from 7.5% to 1.9%

 

EUROPE/EMEA:

 

The European Central Bank stands ready to act if the inflation outlook strengthens, according to Governing Council member Martins Kazaks. While the ECB sees consumer-price growth slipping below its 2% goal as supply-chain snarls are resolved and soaring energy costs ease, it must stay vigilant amid the persistent threat from Covid-19 and the elevated economic uncertainty, the Latvian central bank chief said. The comments follow the ECB’s decision last month to chart a course out of emergency stimulus measures enacted as the pandemic struck in 2020 — despite resurgent cases of Covid-19 since the emergence of the omicron variant. But while bond-buying will be gradually phased out, President Christine Lagarde has reiterated that an increase in interest rates in 2022 is unlikely. Investors aren’t quite so sure, with money markets betting on a 10 basis-point hike by year-end and another by March 2023. The ECB forecasts prices rising 3.2% on average this year, and 1.8% in 2023 and 2024. But Kazaks isn’t alone in warning of possible upside risks to that outlook.

On Wednesday, Italian 10-year yields held two basis points higher at 1.23%, close to a two-month high, while their German counterparts remained one basis point lower at minus 0.09%. Data due Friday is set to show record euro-area inflation slowed a little last month, to 4.8%. Bank of France Governor Francois Villeroy de Galhau said Tuesday that surging prices are close to their peak after French numbers provided the first signs of stabilization. A day later, however, Italian inflation hit its highest level in more than a decade.

 

The major European stock markets had a green day:

 

  • CAC 40 increased 58.96 points or 0.81% to 7,376.37
  • FTSE 100 increased 11.72 points or 0.16% to 7,516.87
  • DAX 30 increased 119.14 points or 0.74% to 16,271.75

 

The major European currency markets had a mixed day today:

 

  • EURUSD increased 0.00522 or 0.46% to 1.13362
  • GBPUSD increased 0.0044 or 0.33% to 1.35734
  • USDCHF decreased 0.0004 or -0.04% to 0.91596

 

Some economic news from Europe today:

 

France:

 

French Consumer Confidence (Dec) increased from 98 to 100

 

French Markit Composite PMI (Dec) decreased from 56.1 to 55.8

 

French Services PMI (Dec) decreased from 57.4 to 57.0

 

Spain:

 

Spanish Services PMI (Dec) decreased from 59.8 to 55.8

 

Spanish Consumer Confidence decreased from 84.6 to 81.3

 

Italy:

 

Italian Composite PMI (Dec) decreased from 57.6 to 54.7

 

Italian Services PMI (Dec) decreased from 55.9 to 53.0

 

Italian CPI (YoY) (Dec) increased from 3.7% to 3.9%

 

Italian CPI (MoM) (Dec) decreased from 0.6% to 0.4%

 

Italian HICP (YoY) (Dec) increased from 3.9% to 4.2%

 

Italian HICP (MoM) (Dec) decreased from 0.7% to 0.5%

 

Germany:

 

German Composite PMI (Dec) decreased from 52.2 to 49.9

 

German Services PMI (Dec) decreased from 52.7 to 48.7

 

Norway:

 

House Price Index (YoY) (Dec) decreased from 6.60% to 5.20%

 

Euro Zone:

 

Markit Composite PMI (Dec) decreased from 55.4 to 53.3

 

Services PMI (Dec) decreased from 55.9 to 53.1

 

 US/AMERICAS:

The Labor Department announced that a record 4.5 million Americans quit their jobs in November amid the “mass resignation” movement. The number of resignations marks a 9% uptick from October and passed September’s previous record of 4.36 million. As of November, 10.56 million jobs remained unfilled across the nation. The job opening rate is now 6.6%, which is still an improvement from 4.5% the year prior.

The Centers for Disease Control (CDC) has shortened the waiting period for Pfizer booster shots to five months. The CDC is now recommending booster shots to children ages 5 to 11 as well, but only under the Pfizer brand. The new measures will be another lucrative venture for Pfizer who has seen profits multiply over the pandemic.

Job growth in the US doubled analysts’ expectations in December after rising to 807,000. The number surprised analysts who expected a reading of only 375,000. November’s growth was revised down from 534,000 to 505,000. According to the ADP, this is the largest gain since May 2021. The leisure and hospitality sector saw the most significant increase after adding 246,000 jobs. Trade, transportation, and utilities added an additional 138,000, professional business services gained 130,000, and education and health services rose by 85,000.

US Market Closings:

  • Dow declined 392.54 points or -1.07% to 36,407.11
  • S&P 500 declined 92.96 points or -1.94% to 4,700.58
  • Nasdaq declined 522.54 points or -3.34% to 15,100.17
  • Russell 2000 declined 74.87 points or -3.3% to 2,194.00

 

Canada Market Closings:

  • TSX Composite declined 196.86 points or -0.93% to 21,039.66
  • TSX 60 declined 9.68 points or -0.75% to 1,277.75

 

Brazil Market Closing:

  • Bovespa declined 2,508 points or -2.42% to 101,005.64

 

ENERGY:

The oil markets had a green day today:

 

  • Crude Oil increased 1.43 USD/BBL or 1.86% to 78.4200
  • Brent increased 1.3 USD/BBL or 1.62% to 81.3000
  • Natural gas increased 0.124 USD/MMBtu or 3.34% to 3.8400
  • Gasoline increased 0.0279 USD/GAL or 1.23% to 2.3042
  • Heating oil increased 0.0436 USD/GAL or 1.81% to 2.4531

 

The above data was collected around 12:08 EST on Wednesday

 

  • Top commodity gainers: Coal (3.45%) and Cheese (11.38%), Milk (11.67%), Rhodium (3.51%)
  • Top commodity losers: Wheat (-1.53%), Sugar (-2.03%), Oat (-1.70%), and Corn (-1.23%)

 

 

The above data was collected around 12:15 EST on Wednesday.

 

 

BONDS:

Japan 0.098%(+1.4bp), US 2’s 0.80% (+0.044%), US 10’s 1.6806% (+3.16bps); US 30’s 2.0896% (+0.03%), Bunds -0.122% (+0.6bp), France 0.232% (-0.2bp), Italy 1.251% (+3bp), Turkey 22.97% (-14bp), Greece 1.381% (+7.7bp), Portugal 0.513% (+1.6bp); Spain 0.621% (+2.19bp) and UK Gilts 1.094% (+0.9bp).