Market Talk – November 30, 2020

Posted Nov 30, 2020 by Martin Armstrong |

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ASIA:

Prime Minister Scott Morrison on Monday demanded an apology from the Chinese government for tweeting a “falsified” and “repugnant” image of an Australian soldier killing a child in Afghanistan, amid escalating political tensions between Canberra and Beijing. Morrison said Australia has reached out to the Chinese government and also contacted Twitter to have the post removed.

Independent economists and experts have bumped up their gross domestic product (GDP) estimates for the year ending March following a lower-than-expected contraction in the September quarter. The decline in FY21 GDP is expected to be less than the double-digit shrinkage forecast earlier. According to data released by the National Statistical Office on Friday, India’s GDP shrank 7.5% against a median expectation of 10.2% contraction in an ET poll of economists conducted a week before.

The major Asian stock markets had a negative day today:

NIKKEI 225 decreased 211.09 points or -0.79% to 26,433.62
Shanghai decreased 16.55 points or -0.49% to 3,391.76
Hang Seng decreased 553.19 points or -2.06% to 26,341.49
ASX 200 decreased 83.30 points or -1.26% to 6,517.80
Kospi decreased 42.11 points or -1.60% to 2,591.34
SENSEX closed
Nifty50 closed

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.0036 or -0.49% to 0.73504
NZDUSD decreased 0.0009 or -0.12% to 0.70133
USDJPY increased 0.2760 or 0.27% to 104.36
USDCNY increased 0.0089 or 0.14% to 6.58236

Precious Metals:

Gold decreased 7.83 USD/t oz. or -0.44% to 1,780.30
Silver decreased 0.215 USD/t. oz or -0.95%% to 22.480

Some economic news from last night:

China:

Chinese Composite PMI (Nov) increased from 55.3 to 55.7

Manufacturing PMI (Nov) increased from 51.4 to 52.1

Non-Manufacturing PMI (Nov) increased from 56.2 to 56.4

Japan:

Industrial Production (MoM) (Oct) decreased from 3.9% to 3.8%

Industrial Production forecast 1m ahead (MoM) (Nov) decreased from 4.5% to 2.7%

Industrial Production forecast 2m ahead (MoM) (Dec) decreased from 1.2% to -2.4%

Retail Sales (YoY) (Oct) increased from -8.7% to 6.4%

South Korea:

Industrial Production (MoM) (Oct) decreased from 5.5% to -1.2%

Industrial Production (YoY) (Oct) decreased from 8.0% to -2.2%

Retail Sales (MoM) decreased from 1.7% to -0.9%

Service Sector Output (MoM) (Oct) increased from 0.3% to 1.2%

Australia:

MI Inflation Gauge (MoM) increased from -0.1% to 0.3%

Business inventories (MoM) (Q3) increased from -2.9% to -0.5%

Company Gross Operating Profits (QoQ) (Q3) decreased from 15.8% to 3.2%

Company Profits Pre-Tax (QoQ) (Q3) increased from 6.3% to 25.8%

Housing Credit (Oct) decreased from 0.4% to 0.3%

Private Sector Credit (MoM) (Oct) remain the same at 0.0%

New Zealand:

ANZ Business Confidence (Nov) increased from -15.7 to -6.9

NBNZ Own Activity (Nov) increased from 4.7% to 9.1%

Indonesia:

M2 Money Supply (YoY) (Oct) increased from 12.40% to 12.50%

Singapore:

Bank Lending (Oct) decreased from 677.5B to 675.6B

Some economic news from today:

Japan:

Construction Orders (YoY) (Oct) increased from -10.6% to -0.1%

Housing Starts (YoY) (Oct) increased from -9.9% to -8.3%

Hong Kong:

M3 Money Supply (Oct) increased from 10.7% to 20.5%

EUROPE/EMEA:

Bank of England policymaker Silvana Tenreyro said a cut in the central bank’s interest rate to below zero could help Britain’s economy via a weaker exchange rate and higher asset prices, as well as increased bank lending. “The evidence we have from Europe and other European countries (that have cut rates below zero) is that the lending channel of the transmission of monetary policy has worked,” Tenreyro told the Resolution Foundation think tank.

The major Europe stock markets had a negative day today:

CAC 40 decreased 79.63 points or -1.42% to 5,518.55
FTSE 100 decreased 101.39 points, or -1.59% to 6,266.19
DAX 30 decreased 44.52 points or -0.33% to 13,291.16

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.0016 or -0.14% to 1.19463
GBPUSD increased 0.0029 or 0.22% to 1.33407
USDCHF increased 0.0017 or 0.19% to 0.90623

Some economic news from Europe today:

Norway:

Credit Indicator (YoY) (Oct) decreased from 4.6% to 4.5%

Central Bank Currency Purchase (Dec) increased from -1,600.0M to -500.0M

Swiss:

Retail Sales (YoY) (Oct) increased from 0.4% to 3.1%

KOF Leading Indicators (Nov) decreased from 106.3 to 103.5

Spain:

Spanish CPI (YoY) remain the same at -0.8%

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

Spanish HICP (YoY) (Nov) remain the same at -0.9%

Spanish HICP (MoM) decreased from 0.3% to 0.1%

Spanish Current account (Sep) decreased from 1.35B to 0.30B

UK:

BoE Consumer Credit increased from -0.630B to -0.590B

M4 Money Supply (MoM) (Oct) decreased from 0.8% to 0.6%

Mortgage Approvals (Oct) increased from 92.09K to 97.53K

Mortgage Lending (Oct) decreased from 4.86B to 4.29B

Net Lending to Individuals decreased from 4.2B to 3.7B

Italy:

Italian CPI (YoY) (Nov) increased from -0.3% to -0.2%

Italian CPI (MoM) (Nov) decreased from 0.2% to -0.1%

Italian HICP (YoY) (Nov) increased from -0.6% to -0.3%

Italian HICP (MoM) (Nov) decreased from 0.6% to 0.0%

Germany:

German CPI (YoY) (Nov) decreased from -0.2% to -0.3%

German CPI (MoM) (Nov) decreased from 0.1% to -0.8%

German HICP (YoY) (Nov) decreased from -0.5% to -0.7%

German HICP (MoM) (Nov) decreased from 0.0% to -1.0%

US/AMERICAS:

Today Moderna became the latest contender to apply for an emergency authorization of a coronavirus vaccine. The company claims their vaccine is 94.1% effective at warding off the virus and 100% effective at diminishing the severity of the virus for those who fall ill. The Food and Drug Administration (FDA) plans to review both Pfizer’s and Moderna’s vaccinations on December 10 to determine if it is safe for emergency use authorization. Dr. Fauci has claimed that vaccinations in the US could take place as quickly as late December.

Despite promising coronavirus vaccination studies, the Centers for Disease Control (CDC) announced this Monday that the vaccine “is not going to be a walk in the park.” Volunteers who took the trial vaccination from both Moderna and Pfizer reported significant side effects including fever, chills, headaches, and extreme fatigue. According to CNBC, a woman who participated in Moderna’s study warned that those receiving the vaccine should expect to take a day off from school, work, or other obligations a day after receiving the vaccine due to the impairing side effects.

Pending home sales in America were up 20.2% YoY in October, according to new data by the National Association of Realtors, but fell -1.1% from the month prior. Chief Economist for the National Association of Realtors Lawrence Yun cited rising home prices as the culprit for the monthly decline. Inventory is another factor as the number of available homes for sale in October declined by around -20% annually. Although prices vary widely across the nation, the median home price in the US currently sits at $313,000, which is the highest level on record. “The combination of these factors – scarce housing and low rates – plus very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers, who don’t have the luxury of using housing equity from a sale to use as a down payment,” Yun told reporters.

US Market Closings:

Dow declined 271.73 points or -0.91% to 29,638.64
S&P 500 declined 16.72 points or -0.46% to 3,621.63
Nasdaq declined 7.11 points or -0.06% to 12,198.74
Russell 2000 declined 35.45 points or -1.91% to 1,819.82

Canada Market Closings:

TSX Composite declined 206.31 points or -1.19% to 17,190.25
TSX 60 declined 14.55 points or -1.4% to 1,023.52

Brazil Market Closing:

Bovespa declined 1,694.44 points or -1.53% to 108,881.03

ENERGY:

The oil markets had a mixed day today:

Crude Oil decreased 0.63 USD/BBL or -1.38% to 44.9000
Brent decreased 0.66 USD/BBL or -1.37% to 47.5200
Natural gas increased 0.088 USD/MMBtu or 3.10% to 2.9310
Gasoline decreased 0.0298 USD/GAL or -2.32% to 1.2522
Heating oil decreased 0.0237 USD/GAL or -1.72% to 1.3568

Top commodity gainers: Natural Gas (3.10%), Lumber (2.06%), Rubber (3.30%), and Lean Hogs (1.63%)

Top commodity losers: Sugar (-2.50%), Palladium (-2.21%), Gasoline (-2.32%), and Wheat (-2.26%)

The above data was collected around 11:50 EST on Monday.

BONDS:

Japan 0.03%(+0bp), US 2’s 0.15% (-0.004%), US 10’s 0.85%(+1bps);US 30’s 1.58%(+0.003%), Bunds -0.58% (+1bp), France -0.33% (+1bp), Italy 0.58% (+2bp), Turkey 11.95% (-1bp), Greece 0.64% (-2bp), Portugal 0.04% (+2bp), Spain 0.07% (+1bp) and UK Gilts 0.31% (+2bp).