Market Talk – November 5, 2020

ASIA:

China has barred non-Chinese travelers from the UK, Belgium, and the Philippines, imposing new border restrictions in response to the worsening Covid-19 pandemic. The Chinese embassy in the UK said on Wednesday that China’s borders were now closed to those arriving from the UK, including those with valid visas and residence permits. The measure, a reversal of recently loosened restrictions, comes as England began a month-long lockdown in an effort to stop a resurgent outbreak. The country has the highest death toll in Europe of almost 48,000 deaths.

WhatsApp, which began testing its payments service in India with 1 million users in early 2018, can finally start to expand the feature to more users in the world’s second largest internet market. National Payments Corporation of India (NPCI), the body that operates the popular UPI payments infrastructure, said on Thursday evening that it has granted approval to WhatsApp to roll out UPI-powered payments in India.

The Covid-19 shock has affected Singapore’s domestic-oriented industries more severely than in past recessions, so economic recovery will likely take longer, the Monetary Authority of Singapore (MAS) said. MAS reiterated the Government’s forecast for the economy to shrink by a record 5 percent to 7 percent this year because of the coronavirus pandemic. It said the economy will post above-trend growth for 2021 due to the effects of the low base in 2020.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 399.75 points or 1.72% to 23,695.23
  • Shanghai increased 6.37 points or 0.19% to 3,277.44
  • Hang Seng decreased 21.59 points or -0.53% to 24,886.14
  • ASX 200 decreased 4.30 points or -0.07% to 6,062.10
  • Kospi increased 14.01 points or 0.60% to 2,357.32
  • SENSEX increased 355.01 points or 0.88% to 40,616.14
  • Nifty50 increased 95.00 points or 0.80% to 11,908.50

The major Asian currency markets had a negative day today:

  • AUDUSD decreased 0.00127 or -0.18% to 0.71830
  • NZDUSD decreased 0.0023 or -0.34% to 0.67037
  • USDJPY decreased 0.09 or -0.09% to 104.52
  • USDCNY decreased 0.02845 or -0.43% to 6.62410

Precious Metals:

  • Gold decreased 5.11 USD/t oz. or -0.27% to 1,903.25
  • Silver decreased 0.26 USD/t. oz or -1.09%% to 23.902

Some economic news from last night:

China:

Caixin Services PMI (Oct) increased from 54.8 to 56.8

Japan:

Monetary Base (YoY) increased from 14.3% to 16.3%

Hong Kong:

Manufacturing PMI (Oct) increased from 47.7 to 49.8

Australia:

AIG Construction Index (Oct) increased from 45.2 to 52.7

Services PMI decreased from 53.8 to 53.7

Retail Sales (MoM) (Sep) increased from -4.0% to -1.1%

Retail Sales (QoQ) (Q3) increased from -3.4% to 6.5%

New Zealand:

Employment Change (QoQ) (Q3) decreased from -0.4% to -0.8%

Labor Cost Index (YoY) (Q3) decreased from 1.8% to 1.6%

Labor Cost Index (QoQ) (Q3) increased from 0.2% to 0.4%

Participation Rate (Q3) increased from 69.70% to 70.10%

Unemployment Rate (Q3) increased from 4.0% to 5.3%

ANZ Commodity Price Index (MoM) increased from -0.2% to 1.9%

Some economic news from today:

India:

Nikkei Services PMI (Oct) increased from 49.8 to 54.1

EUROPE/EMEA:

The Bank of England is pumping another £150 billion ($195 billion) into the UK economy after warning of a double-dip recession because of the coronavirus pandemic and an uncertain outlook because of Brexit, CNN reported. The UK central bank said on Thursday that it would keep interest rates unchanged at a record low of 0.1% but would increase its purchases of UK government bonds to £875 billion ($1.1 trillion). Restrictions introduced to tackle a rapid rise in Covid-19 cases would weigh on consumer spending to a greater extent than the bank projected in August, “leading to a decline in GDP” in the fourth quarter of this year, it added.

The major Europe stock markets had a green day today:

  • CAC 40 increased 117.24 points or 2.44% to 4,922.85
  • FTSE 100 increased 96.49 points, or 1.67% to 5,883.26
  • DAX 30 increased 235.24 points or 1.95% to 12,324.22

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00127 or 0.11% to 1.17237
  • GBPUSD decreased 0.01029 or -0.79% to 1.29821
  • USDCHF increased 0.0014 or 0.15% to 0.91206

Some economic news from Europe today:

France:

French Markit Composite PMI (Oct) decreased from 48.5 to 47.5

French Services PMI (Oct) decreased from 47.5 to 46.5

Germany:

German Composite PMI (Oct) increased from 54.7 to 55.0

German Services PMI (Oct) decreased from 50.6 to 49.5

German Car Registration (MoM) (Oct) decreased from 5.6% to 3.4%

German Car Registration (YoY) (Oct) decreased from 8.4% to -3.6%

Spain:

Spanish Unemployment Change increased from -26.3K to 49.6K

Spanish Services PMI (Oct) decreased from 42.4 to 41.4

Italy:

Italian Composite PMI (Oct) decreased from 50.4 to 49.2

Italian Services PMI (Oct) decreased from 48.8 to 46.7

Norway:

House Price Index (YoY) (Oct) increased from 5.8% to 7.1%

UK:

Composite PMI (Oct) decreased from 56.5 to 52.1

Labour Productivity (Q2) decreased from 0.2% to -1.8%

Services PMI (Oct) decreased from 56.1 to 51.4

Euro Zone:

Markit Composite PMI (Oct) decreased from 50.4 to 50.0

Services PMI (Oct) decreased from 48.0 to 46.9

PPI (MoM) (Sep) increased from 0.1% to 0.3%

PPI (YoY) (Sep) increased from -2.6% to -2.4%

 

US/AMERICAS:

Democratic candidate Joe Biden is six Electoral votes away from becoming the next president of the United States. There has been vast confusion concerning mail-in ballots. The Trump campaign is suing Pennsylvania, Michigan, and Georgia for alleged voter fraud. His campaign claims that mail-in ballots from deceased and unregistered voters were submitted. “Stop the count,” chants can be heard outside the White House as Republican voters are urging states to stop counting mail-in ballots that may or may not be legal.

The Federal Reserve opted to maintain near zero (0%-0.25%) interest rates this Thursday. The economy is beginning to stabilize, although it is “well below” pre-coronavirus levels. Of the 22 millions jobs lost at the beginning of the pandemic, 11.4 have been recovered, however, they anticipate growth will slow in October. The US experienced its largest GDP rally during Q3 after rising at a pace of 33.1%. Still, volatility remains in the marketplace amid political and pandemic pressures.

Puerto Rico voted 52-48 for US statehood. Statehood status varies from being an official US state, as Puerto Rican voters will not have the ability to participate in elections. However, statehood status will grant Puerto Rico the opportunity to have non-voting members sit and speak on various committees. The US Congress and Senate would need to approve of the territory becoming the 51st state. However, there is opposition from both ends as a number of Puerto Rican citizens would like to maintain independence from the US.

Toronto will reopen gyms and indoor dining establishments on November 14. Ontario will move into the “Restrict” zone on November 7, which will permit limited access to indoor dining, gyms, movie theaters, and casinos. Prime Minister Justin Trudeau is warning of a potential second wave of the virus, and Dr. Theresa Tam, Canada’s version of the US’ Dr. Fauci, is urging people to wear three-layer non-medical masks.

US Market Closings:

  • Dow advanced 542.52 points or 1.95% to 28,390.18
  • S&P 500 advanced 67.01 points or 1.95% to 3,510.45
  • Nasdaq advanced 300.15 points or 2.59% to 11,890.93
  • Russell 2000 advanced 44.96 points or 2.78% to 1,660.05

Canada Market Closings:

  • TSX Composite advanced 299.43 points or 1.87% to 16,298.17
  • TSX 60 advanced 16.22 points or 1.7% to 928.52

Brazil Market Closing:

  • Bovespa advanced 2,884.59 points or 2.95% to 100,751.4

ENERGY:

The oil markets had a green day today:

  • Crude Oil increased 1.37 USD/BBL or 3.64% to 39.0300
  • Brent increased 1.42 USD/BBL or 3.58% to 41.1300
  • Natural gas increased 0.001 USD/MMBtu or 0.03% to 3.0600
  • Gasoline increased 0.0279 USD/GAL or 2.59% to 1.1048
  • Heating oil increased 0.04 USD/GAL or 3.32% to 1.1645
  • Top commodity gainers: Brent (3.58%), Cheese (9.11%), Crude Oil (3.64%), and Milk (9.81%)
  • Top commodity losers: Baltic Dry (-3.09%), Silver (-1.09%), Cocoa (-0.61%), and Sugar (-0.48%)

The above data was collected around 16:38 EST on Wednesday.

BONDS:

Japan 0.04%(-0bp), US 2’s 0.15% (-2bps), US 10’s 0.77%(-11bps);US 30’s 1.55%(-11bps), Bunds -0.66% (-4bp), France -0.38% (-4bp), Italy 0.65% (-5bp), Turkey 14.00% (-35bp), Greece 0.94% (+3bp), Portugal 0.08% (-1bp), Spain 0.09% (-2bp) and UK Gilts 0.21% (-6bp).