Market Talk – November 3, 2020

ASIA:

Ant Group’s highly anticipated IPO has been suspended following a meeting between the company’s billionaire co-founder Jack Ma and regulators in China, an abrupt move that threatens what was due to be the largest share sale in history. The Shanghai Stock Exchange said in a statement on Tuesday that it had postponed the company’s listing, less than two days before its shares were due to begin trading, because of “major issues” that might cause it “not to meet the listing conditions or disclosure requirements.” The IPO has also been suspended in Hong Kong, according to a statement from Ant Group. The dual listing was set to raise $37 billion, making it the biggest share sale in history by a wide margin. Saudi state oil company Aramco holds the record for an IPO. It raised $29.4 billion when it issued shares on the Riyadh exchange last December.

India’s factory activity expanded at its fastest pace in over a decade in October as demand and output continued to recover strongly from coronavirus-related disruptions, but firms cut more jobs, a private survey showed. The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 58.9 in October from September’s 56.8. The reading was the highest since May 2010 and above the 50-level separating growth from contraction for the third straight month. Both output and new orders, which tracks overall demand, grew at their sharpest rates in more than 12 years and foreign demand expanded at its quickest pace since December 2014.

Data released by the Centre for Monitoring Indian Economy (CMIE) showed India’s unemployment rate in October rose to 6.98% from 6.67% in September. Economic activity has resumed after the government eased pandemic lockdown restrictions.

The major Asian stock markets had a green day today:

  • NIKKEI 225 closed
  • Shanghai increased 45.95 points or 1.42% to 3,271.07
  • Hang Seng increased 479.72 points or 1.96% to 24,939.73
  • ASX 200 increased 115.10 points or 1.93% to 6,066.40
  • Kospi increased 43.15 points or 1.88% to 2,343.31
  • SENSEX increased 503.55 points or 1.27% to 40,261.13
  • Nifty50 increased 144.35 points or 1.24% to 11,813.50

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.0111 or 1.57% to 0.71649
  • NZDUSD increased 0.00725 or 1.09% to 0.67039
  • USDJPY decreased 0.21 or -0.20% to 104.52
  • USDCNY decreased 0.01328 or -0.20% to 6.67393

Precious Metals:

  • Gold increased 12.36 USD/t oz. or 0.65% to 1,907.46
  • Silver increased 0.149 USD/t. oz or 0.62% to 24.188

Some economic news from last night:

South Korea:

CPI (MoM) (Oct) decreased from 0.7% to -0.6%

CPI (YoY) (Oct) decreased from 1.0% to 0.1%

Australia:

RBA Interest Rate Decision (Nov) decreased from 0.25% to 0.10%

Some economic news from today:

India:

Exports (USD) (Oct) decreased from 27.58B to 24.80B

Imports (USD) (Oct) increased from 30.31B to 33.60B

Trade Balance (Oct) decreased from -2.72B  to -8.78B

Singapore:

Manufacturing PMI (Oct) increased from 50.3 to 50.5

New Zealand:

GlobalDairyTrade Price Index decreased from 0.4% to -2.0%

South Korea:

FX Reserves – USD (Oct) increased from 420.55B to 426.51B

EUROPE/EMEA:

The European Central Bank kept eurozone interest rates unchanged last Thursday, but signaled it might be open to providing additional support for the economy, as a second wave of the coronavirus pandemic has forced lockdowns in the powerhouses of the region, such as Germany and France. The ECB left rates unchanged at 0.0%, as forecast, and said it would keep its existing asset purchase program at €1.35 trillion euros. The bank said it expected headline inflation would likely remain negative until early 2021, because of weak demand, although it expected consumer prices to probably pick up over the medium term, once the impact of COVID-19 fades.

The European Central Bank (ECB) has launched an online survey that enables consumers and industry experts to express their priorities, preferences and concerns about the issuance of a digital euro as a central bank digital currency (CBDC) and means of payment in the euro area. Consumers taking part in the survey are asked to rank the features a digital euro should offer in order of importance, identify challenges that might prevent them from using it and indicate what user features would ensure it “is accessible for people of all ages, including those who do not have a bank account or [who] have disabilities.” The survey also describes two approaches to how a digital euro might work: “one that requires intermediaries to process the payment and one that doesn’t.”

The major European stock markets had a green day:

  • CAC 40 increased 114.47 points or 2.44% to 4,805.61
  • FTSE 100 increased 131.80 points or 2.33% to 5,786.77
  • DAX 30 increased 300.70 points or 2.55% to 12,088.98

The major European currency markets had a mixed day today:

  • EURUSD increased 0.00792 or 0.68% to 1.17191
  • GBPUSD increased 0.01333 or 1.03% to 1.30537
  • USDCHF decreased 0.00692 or -0.75% to 0.91190

Some economic news from Europe today:

Swiss:

CPI (MoM) (Oct) remain the same at 0.0%

CPI (YoY) (Oct) increased from -0.8% to -0.6%

France:

French Government Budget Balance (Sep) increased from -165.7B to -161.6B

US/AMERICAS:

The Dow jumped over 500 points today as the official 2020 US presidential election is underway. The markets seem optimistic about the results and certainty in the election. The US markets sank during the last election night in 2016 when Donald Trump won over Hillary Clinton.

The Federal Bureau of Investigations (FBI) is investigating a series of robocalls urging Americans to stay home on election day. A female voice stating, “Hello. This is just a test call. Time to stay home. Stay safe and stay home,” dialed tens of millions of voters prior to election day. A number of robocalls, specifically targeting African American voters, urged them to go out and vote on election day. “Obviously this is false and an effort to suppress the vote,” Michigan Attorney General Dana Nessel stated. The Department of Homeland Security warned that more tactics might be used this Tuesday to weaken voter confidence and turnout.

The National Guard has placed hundreds of troops across the country in anticipation of civil unrest after the election. Numerous businesses in major cities and news agencies have boarded up their buildings in preparation for the aftermath. President Trump warned of “violence in the streets” if there is a prolonged waiting period to receive the election results.

Walmart has ended its contract with Bossa Nova Robotics in favor of hiring human employees. Walmart previously had 500 robots placed throughout thousands of stores to stock shelves and track inventory. After trial and error, the company decided that humans are more effective than robots. Walmart US Chief Executive John Furner expressed concerns regarding shoppers reactions to seeing robotic workers.

US Market Closings:

  • Dow advanced 554.98 points or 2.06% to 27,480.03
  • S&P 500 advanced 58.92 points or 1.78% to 3,369.16
  • Nasdaq advanced 202.96 points or 1.85% to 11,160.57
  • Russell 2000 advanced 45.7 points or 2.91% to 1,614.3

Canada Market Closings:

  • TSX Composite advanced 242.28 points or 1.54% to 15,939.15
  • TSX 60 advanced 14.54 points or 1.56% to 948.2

Brazil Market Closing:

  • Bovespa advanced 2,027.31 points or 2.16% to 95,979.71

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 1.15 USD/BBL or 3.12% to 37.9600
  • Brent increased 1.01 USD/BBL or 2.59% to 39.9800
  • Natural gas decreased 0.191 USD/MMBtu or -5.89% to 3.0530
  • Gasoline increased 0.0268 USD/GAL or 2.55% to 1.0788
  • Heating oil increased 0.0189 USD/GAL or 1.70% to 1.1312

The above data was collected around 16:35 EST on Tuesday

  • Top commodity gainers: Lumber (6.31%), Crude Oil (3.12%), Bitumen (2.80%), and Palladium (3.24%)
  • Top commodity losers: Sugar (-1.67%), Orange Juice (-3.30%), Rubber (-1.61%), and Natural Gas (-5.89%)

The above data was collected around 16:43 EST on Tuesday.

BONDS:

Japan 0.05%(+0bp), US 2’s 0.17%(+1bps), US 10’s 0.90%(+5bps); US 30’s 1.67%(+5bps), Bunds -0.64% (+0bp), France -0.35% (+0bp), Italy 0.70% (-2bp), Turkey 14.35% (+17bp), Greece 1.01% (+7bp), Portugal 0.10% (-1bp); Spain 0.12% (-0bp) and UK Gilts 0.27% (+5bp).

  • US 52-Week Bill Auction decreased from 0.140% to 0.135%