Market Talk – November 11, 2019

ASIA:

Tensions are showing no signs of relief in Hong Kong after two protesters were shot by police over the weekend. Recent sparks of tensions came about due to a student dying due to falling off a building after a police raid due to the protests.

Chinese commerce company Alibaba set a new sales record on Singles Day in China. The total amount of sales overtook last year’s 213.5 billion yuan record – over 31 billion USD.  Some impressive facts such as the speed at which the Chinese Single Day sales reached 10 billion yuan in only 96 seconds.

A least one successful trade deal occurred today involving China, not with the US but Greece. Chinese President Xi Jinping met with the Greek Prime Minister in Athens, Greece today. The two countries agreed on trade deals worth billions of US dollars as well as a bilateral extradition bill. Greece will be an active participator in the Belt and Road Initiative. PM Mitsotakis said, “We welcome more Chinese companies to invest in Greece, which will greatly promote our economic development and employment.”

The US-China trade deal, as reported by the Guardian, seems to have a sticking point due to the opioids being smuggled in the US from China. The US is demanding China cracks down on the exports. Recently, three Chinese citizens were arrested attempting to smuggle the drugs into the US.

The major Asian stock markets had a mixed day today:

  • Shanghai decreased 54.21 points or -1.83% to 2,909.97
  • Kospi decreased 13.14 points or -0.61% to 2,124.09
  • ASX 200 increased 48.40 points or 0.72% to 6,772.50
  • NIKKEI 225 decreased 60.03 points or -0.26% to 23,331.84
  • Hang Seng decreased 724.59 points or -2.62% to 26,926.55
  • SENSEX increased 21.47 points or 0.05% to 40,345.08

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0006 or 0.09% to 0.6853
  • NZDUSD increased 0.0036 or 0.57% to 0.6364
  • USDJPY decreased 0.2460 or 0.23% to 109.0240
  • USDCNY increased 0.0216 or 0.31% to 7.0073

Precious Metals:

  • Gold decreased 2.11 USD/t oz. or -0.14% to 1,453.34
  • Silver increased 0.0548 USD/t. oz or 0.33%% to 16.8512

Some economic news from last night:

New Zealand:

Electronic Card Retail Sales (YoY) (Oct) increased from 0.6% to 1.6%

Electronic Card Retail Sales (MoM) (Oct) decreased from 0.2% to -0.6%

Japan:

Bank Lending (YoY) (Oct) remain the same at 2.0%

Core Machinery Orders (YoY) (Sep) increased from -14.5% to 5.1%

Core Machinery Orders (MoM) (Sep) decreased from -2.4% to -2.9%

Current Account n.s.a. (Sep) decreased from 2.158T to 1.613T

Some economic news from today:

Japan:

Economy Watchers Current Index (Oct) decreased from 46.7 to 36.7

India:

Cumulative Industrial Production (Sep) decreased from 2.40% to 1.30%

Industrial Production (YoY) (Sep) decreased from -1.4% to -4.3%

Manufacturing Output (MoM) (Sep) decreased from -1.6% to -3.9%

EUROPE/EMEA:

U.S. President Donald Trump will decide by the 13th of November as to whether the US will apply for new duties on European car manufacturers. President Trump has often criticized the deal, and wants to enforce more protectionism on US car manufactures. The US currently imports around 400 billion USD worth of Cars and parts. 1European policy makers do not think that a tariff will happen, however if it does, it would affect around 60 billion USD worth of exports. The EU is preparing a list of around 40 billion of retaliatory tariffs on US exports to Europe.

The UK economy has avoided going into a recession, as shown in the third-quarter GDP at 0.3%. Meanwhile, UK Brexit party leader Nigel Farage announced the Brexit Party will not contest seats the Tories won in 2017, as he targets Labour seats to give PM Boris Johnson the best possible chance of winning at the upcoming elections.

The UAE has announced the formation of a new defense giant in the Middle East called Edge. It is a unity of 25 states and private firms and will look to tackle cyber and drone threats.

Turkey is expelling IS fighters which belong to many European countries, it is said that 20 or so IS fighters belong to Germany, France, Ireland and Denmark. Turkish President Erdogan has indicated that 2,500 foreign IS fighters are in prison in Turkey.

The major Europe stock markets had a mixed day today:

  • CAC 40 increased 4.12 points or 0.07% to 5,893.82
  • FTSE 100 decreased 30.84 points, or -0.42% to 7,328.54
  • DAX 30 decreased 30.19 points or -0.23% to 13,198.37

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.0018 or 0.16% to 1.1034
  • GBPUSD increased 0.00838 or 0.66% to 1.28538
  • USDCHF decreased 0.0041 or 0.41% to 0.9931

Some economic news from Europe today:

Germany:

German WPI (MoM) (Oct) increased from -0.4% to -0.1%

German WPI (YoY) (Oct) decreased from -1.9% to -2.3%

Norway:

Core CPI YTD (Oct) remain the same at 2.2%

Core Inflation (MoM) (Oct) decreased from 0.6% to 0.0%

CPI (MoM) (Oct) decreased from 0.5% to 0.2%

CPI (YoY) (Oct) increased from 1.5% to 1.8%

PPI (YoY) (Oct) decreased from -10.7% to -13.8%

Italy:

Italian Industrial Production (YoY) (Sep) decreased from -1.7% to -2.1%

Italian Industrial Production (MoM) (Sep) decreased from 0.4% to -0.4%

UK:

Business Investment (QoQ) (Q3) increased from -0.4% to 0.0%

Business Investment (YoY) (Q3) increased from -1.4% to -0.6%

Construction Output (MoM) (Sep) decreased from 0.1% to -0.2%

U.K. Construction Output (YoY) (Sep) increased from 1.1% to 1.2%

GDP (MoM) remain the same at -0.1%

GDP (YoY) (Q3) decreased from 1.3% to 1.0%

GDP (QoQ) (Q3) increased from -0.2% to 0.3%

Index of Services remain the same at 0.4%

Industrial Production (YoY) (Sep) increased from -1.8% to -1.4%

Industrial Production (MoM) (Sep) increased from -0.7% to -0.3%

Manufacturing Production (MoM) (Sep) increased from -0.7% to -0.4%

Manufacturing Production (YoY) (Sep) decreased from -1.6% to -1.8%

Monthly GDP 3M/3M Change remain the same at 0.3%

Trade Balance (Sep) decreased from -10.83B to -12.54B

Trade Balance Non-EU (Sep) decreased from -3.23B to -4.03B

NIESR GDP Estimate decreased from 0.3% to 0.1%

NIESR Monthly GDP Tracker decreased from 0.5% to 0.1%

US/AMERICAS:

President Trump took a personal loss in court today after a federal judged ruled he will be unable to sue the state of New York for attempting to release his tax returns. U.S. Judge Carl Nichols ruled that the president “”has not met his burden of establishing personal jurisdiction over either of the New York Defendants.” The ruling stems from the TRUST Act, implemented in July 2019, which enables state officials to request the release of government officials’ tax records.

Boeing announced this Monday that it will resume deliveries of the grounded 737 Max jet planes. The planes, which have been grounded since March, may resume limited operations as soon as December. The Federal Aviation Administration released a separate statement saying that the plane is still undergoing safety evaluations before passenger services can resume. On Friday, Southwest and American Airlines pulled the aircraft from their flight schedules until March. Once the FAA approves the aircraft, airlines will need to retrain pilots to operate the 737 and that could take months. Some airlines have expressed concerns over whether passengers would feel safe flying on the aircraft. Still, investors seem hopeful and Boeing stock rebounded 4.68%.

The Canadian job market sunk beneath analysts’ expectations in October after declining by 1,800 positions. The unemployment rate remained stable at 5.5%. On a year-over-year basis, employment has advanced 2.4% or 443,000 positions. Interestingly, employment for people over the age of 55 rose in October by 31,000 positions almost equally between men (17,000) and women (15,000). Manufacturing was hit the most this October after declining by 23,000 positions, with most of the losses taking place in Ontario.

US Market Closings:

  • Dow advanced 10.25 points or 0.04% to 27,691.49
  • S&P 500 declined 6.07 points or -0.20% to 3,087.01
  • Nasdaq declined 11.03 points or -0.13% to 8,464.28
  • Russell 2000 declined 4.09 points or -0.26% to 1,594.77

Canada Market Closings:

  • TSX Composite advanced 5.41 points or 0.03% to 16,882.83
  • TSX 60 advanced 0.50 of a points or 0.05% to 1,011.04

Brazil Market Closing:

  • Bovespa advanced 738.46 points or 0.69% to 108,367.77

ENERGY:

Iran’s president announced that Iran has discovered an oil field with an estimated 53 billion barrels of Crude. Iran currently has around 150 billion barrels of proven reserves so this will add a significant boost to their reserves.

The oil markets had a negative day today:

  • Crude Oil decreased 0.41 USD/BBL or -0.72% to 56.7922
  • Brent decreased 0.38 USD/BBL or -0.61% to 62.1112
  • Natural gas decreased 0.15 USD/MMBtu or -5.38% to 2.6408
  • Gasoline decreased 0.0234 USD/GAL or -1.43% to 1.6080
  • Heating oil decreased 0.0038 USD/GAL or -0.20% to 1.915
  • Top commodity gainers: Oat (2.63%),Rubber (2.58%),Ethanol(1.27%), and Cocoa (1.20%)
  • Top commodity losers: Bitumen(-10.80 %), Natural Gas(-5.38%), Coffee (-3.15%), and Palladium (-3.11%)

The above data was collected around 15:50 EST on Monday.

BONDS:

Japan -0.06%(-1bp), US 2’s 1.68% (+1bps), US 10’s 1.95%(+1bps), US 30’s 2.42%(+2bps), Bunds -0.25% (+2bp), France 0.05% (+3bp), Italy 1.36% (+8bp), Turkey 12.29% (-10bp), Greece 1.37% (+0bp), Portugal 0.36% (+4bp), Spain 0.45% (+5bp) and UK Gilts 0.81% (+2bp).