Market Talk – November 12, 2020

ASIA:

China’s two biggest vaccine companies have already begun inoculating hundreds of thousands of mostly state workers in a bid to get a head start. But deploying unproven vaccines carries huge risks – both for those receiving the vaccination and epidemic control efforts. The major worry is that vaccinations will give people who’ve had them a sense of invincibility that is not warranted – and that could help spread the virus. China has four experimental vaccines developed by three companies now going through phase III human trials and safety testing before they can be approved for commercial use. Sinopharm and Sinovac, the two front-runners, have both stressed they are not ready to deploy their vaccines commercially.

India is planning to announce a fresh round of stimulus totaling about $20 billion this week to help pull the economy out of its historic contraction, government said on Wednesday. The package would follow Wednesday’s earlier announcement of production-linked incentives worth about $27 billion over five years for manufacturers in 10 sectors. Indian government’s last stimulus package in May largely failed to soften blow of the strict coronavirus lockdown as it focused on providing liquidity and collateral-free credit for small businesses but with little actual spending.

India’s Ministry of Information and Broadcasting, which oversees programs beamed on television and screened in theatres in the country, will now also regulate policies for streaming platforms and digital news outlets in a move that is widely believed to kickstart an era of more frequent and stricter censorship on what online services air. The move by the world’s second-largest internet market is bound to make players like Netflix, Amazon Prime Video, Disney’s Hotstar, Times Internet’s MX Player and dozens of other streaming services and web-based news outlets more cautious about what all they choose to stream and publish on their platforms, an executive with one of the top streaming services told TechCrunch.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 171.28 points or 0.68% to 25,520.88
  • Shanghai decreased 3.52 points or -0.11% to 3,338.68
  • Hang Seng decreased 57.60 points or -0.22% to 26,169.38
  • ASX 200 decreased 31.50 points or -0.49% to 6,418.20
  • Kospi decreased 10.25 points or -0.41% to 2,475.62
  • SENSEX decreased 236.48 points or -0.54% to 43,357.19
  • Nifty50 decreased 58.35 points or -0.46% to 12,690.80

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0048 or -0.66% to 0.72305
  • NZDUSD decreased 0.00457 or -0.66% to 0.68389
  • USDJPY decreased 0.32 or -0.30% to 105.10
  • USDCNY increased 0.00021 or 0.00% to 6.61893

 

Precious Metals:

  • Gold increased 11.54 USD/t oz. or 0.62% to 1,876.25
  • Silver increased 0.014 USD/t. oz or 0.06%% to 24.263

 

Some economic news from last night:

Japan:

Tertiary Industry Activity Index (MoM) increased from 0.8% to 1.8%

Core Machinery Orders (MoM) (Sep) decreased from 0.2% to -4.4%

Core Machinery Orders (YoY) (Sep) increased from -15.2% to -11.5%

Foreign Bonds Buying increased from 72.1B to 1,365.8B

Foreign Investments in Japanese Stocks increased from -212.7B to 485.5B

PPI (YoY) (Oct) decreased from -0.8% to -2.1%

PPI (MoM) (Oct) remain the same at -0.2%

South Korea:

Export Price Index (YoY) (Oct) decreased from -5.9% to -6.4%

Import Price Index (YoY) (Oct) decreased from -11.3% to -11.6%

Australia:

MI Inflation Expectations increased from 3.4% to 3.5%

New Zealand:

External Migration & Visitors (Sep) increased from -96.90% to -96.70%

Permanent/Long-Term Migration (Sep) decreased from 1,144 to 808

Visitor Arrivals (MoM) decreased from 104.7% to 9.0%

 

Some economic news from today:

India:

CPI (YoY) (Oct) increased from 7.27% to 7.61%

Cumulative Industrial Production (Sep) increased from -25.00% to -21.10%

Industrial Production (YoY) (Sep) increased from -8.0% to 0.2%

Manufacturing Output (MoM) (Sep) increased from -8.6% to -0.6%

EUROPE/EMEA:

UK foreign secretary, Dominic Raab has said China’s imposition of new rules disqualifying opposition legislators in Hong Kong constitutes a breach of legally binding international commitments. A measure passed by China’s highest legislative body on Wednesday allowed the disqualification of “unpatriotic” opposition members in Hong Kong’s parliament and prompted the entire pro-democracy caucus to announce their resignation. Raab said the move represented a “clear breach” of the Sino-British joint declaration, which was supposed to guarantee Hong Kong a high degree of autonomy under Chinese rule. Raab also said the UK would work with allies to hold the Chinese government to its obligations under international law.

Tesla has poached the chief of Mercedes-Benz’s Berlin engine plant, angering members of Germany’s largest trade union, according to local media reports. The electric-vehicle manufacturer hired René Reif, who abruptly left his post as the head of Daimler’s Marienfeld factory, German outlet BZ reported Wednesday. The move caused a stir within IG Metall,

Germany’s metalworkers’ union that represents the country’s autoworkers, according to the report. Already outraged that Mercedes’ Berlin plant is preparing for layoffs while Tesla is building a massive plant nearby, union leaders see Reif’s departure as adding insult to injury.

The major Europe stock markets had a negative day today:

  • CAC 40 decreased 82.64 points or -1.52% to 5,362.57
  • FTSE 100 decreased 43.16 points, or -0.68% to 6,338.94
  • DAX 30 decreased 163.23 points or -1.24% to 13,052.95

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00267 or 0.23% to 1.18069
  • GBPUSD decreased 0.00984 or -0.74% to 1.31170
  • USDCHF decreased 0.00154 or -0.17% to 0.91533

 

Some economic news from Europe today:

UK:

NIESR GDP Estimate decreased from 10.5% to 10.2%

Thomson Reuters IPSOS PCSI (Nov) increased from 42.4 to 42.8

Business Investment (QoQ) (Q3)  increased from -26.5% to 8.8%

Business Investment (YoY) (Q3) increased from -26.1% to -20.7%

Construction Output (MoM) (Sep) decreased from 3.8% to 2.9%

U.K. Construction Output (YoY) (Sep) increased from -12.2% to -10.0%

GDP (QoQ) (Q3) increased from -19.8% to 15.5%

GDP (MoM) decreased from 2.1% to 1.1%

GDP (YoY) (Q3) increased from -21.5% to -9.6%

Index of Services increased from 7.1% to 14.2%

Industrial Production (YoY) (Sep) increased from -6.4% to -6.3%

Industrial Production (MoM) (Sep) increased from 0.3% to 0.5%

Labour Productivity increased from -1.8% to 3.0%

Manufacturing Production (MoM) (Sep) decreased from 0.9% to 0.2%

Manufacturing Production (YoY) (Sep) increased from -8.3% to -7.9%

Monthly GDP 3M/3M Change increased from 8.0% to 15.5%

Trade Balance (Sep) decreased from -9.01B to -9.35B

Trade Balance Non-EU (Sep) increased from -2.31B to -1.65B

Italy:

Italy Thomson Reuters IPSOS PCSI (Nov) decreased from 37.13 to 32.83

Germany:

Germany Thomson Reuters IPSOS PCSI (Nov) decreased from 52.57 to 47.09

German CPI (MoM) (Oct) remain the same at 0.1%

German CPI (YoY) (Oct) remain the same at -0.2%

German HICP (MoM) (Oct) increased from -0.4% to 0.0%

German HICP (YoY) (Oct) remain the same at -0.5%

France:

France Thomson Reuters IPSOS PCSI (Nov) decreased from 39.26 to 36.24

Euro Zone:

Industrial Production (YoY) (Sep) decreased from -6.7% to -6.8%

Industrial Production (MoM) (Sep) decreased from 0.6% to -0.4%

US/AMERICAS:

Max Baucus, former trade adviser under President Obama, believes that the person to replace Robert Lighthizer must have a better understanding of Chinese business and culture. “It was very clear to me that some of the people – the top cabinet secretaries, for example – did not have sufficient Chinese experience and did not sufficiently understand China,” Baucus told reporters in reference to Lighthizer. This year was a tumultuous year for US-China relations beginning with a tariff war and ending in finger pointing for responsibility of the worldwide pandemic that caused the global economy to significantly decline.

Coronavirus restrictions are sweeping the US as many worry that a second lockdown may be forthcoming. Today, New York City Mayor Bill de Blasio states that he may close schools if the seven-day case average exceeds 3%. Additionally, major airlines issued a warning to travelers that holiday travel may not be possible this year due to the coronavirus. “With the U.S. hitting a grim milestone of 10 million positive cases and outbreaks in Europe and other parts of the world, all signs point to a challenging winter ahead,” Delta Chief Executive Ed Bastian stated this Thursday. Southwest issued a similar warning, noting that “the company remains cautious in this uncertain revenue environment.”

In Canada, a group of 430 doctors have come forth and urged for a “circuit-breaker” lockdown to prevent the spread of the  virus. “We have reached a juncture where only strong and decisive mandatory measures can prevent our hospitals from becoming overwhelmed,” the letter stated. The letter urges the following: “(1) Directives to work from home for those who are able. (2) The limiting of contacts to those within the household or a support bubble. (3) Restrictions on group recreation and sports activities. (4) The suspension of group indoor activities, including indoor dining, bars, casinos, religious services and theatres.” However, they believe that schools should remain open due to their “vital” importance.

US Market Closings:

  • Dow declined 317.46 points or -1.08% to 29,080.17
  • S&P 500 declined 35.65 points or -1% to 3,537.01
  • Nasdaq declined 76.84 points or -0.65% to 11,709.59
  • Russell 2000 declined 28.47 points or -1.64% to 1,708.47

Canada Market Closings:

  • TSX Compsite declined 191.96 points or -1.26% to 990.52
  • TSX 60 declined 12.61 points or -1.26% to 990.52

Brazil Market Closing:

  • Bovespa declined 2,301.82 points or -2.2% to 102,507.01

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 0.45 USD/BBL or -1.09% to 41.0000
  • Brent decreased 0.4 USD/BBL or -0.91% to 43.4000
  • Natural gas decreased 0.081 USD/MMBtu or -2.67% to 2.9500
  • Gasoline decreased 0.0252 USD/GAL or -2.14% to 1.1507
  • Heating oil decreased 0.0185 USD/GAL or -1.48% to 1.2273

Top commodity gainers: Ethanol (2.11%), Rubber (2.81%), Sugar (2.42%), and Lean Hogs (1.77%)

Top commodity losers: Lumber (-1.84%), Natural Gas (-2.67%), Gasoline (-2.14%), and Corn (-2.34%)

The above data was collected around 16:40 EST on Thursday.

BONDS:

Japan 0.03%(-1bp), US 2’s 0.18% (-1bps), US 10’s 0.88%(-9bps);US 30’s 1.64%(-12bps), Bunds -0.52% (-1bp), France -0.27% (-0bp), Italy 0.65% (-5bp), Turkey 12.18% (-32bp), Greece 0.90% (+7bp), Portugal 0.12% (-2bp), Spain 0.13% (-3bp) and UK Gilts 0.35% (-7bp).