Market Talk – October 22, 2020

ASIA:

The United States government has labeled six more Chinese media companies operating in the US as foreign missions in the latest round of tit-for-tat between Beijing and Washington over restrictions on journalists. US Secretary of State Mike Pompeo announced the decision at a press briefing on Wednesday, saying that the six media companies were “substantially or effectively controlled by a foreign government.” The US operations of Yicai Global, Jiefang Daily, Xinmin Evening News, Social Sciences in China Press, Beijing Review and Economic Daily will all be affected by the decision, according to a release from State Department spokesperson Morgan Ortagus.

India’s government is working on the next stimulus package to support the economy amid positive signs of a fall in COVID-19 cases, a senior finance ministry official said on Wednesday. The government has received suggestions from various ministries and sectors on needed measures to identify areas where it wants the next stimulus package to effectively utilize and help economic recovery.

Reuters economists poll predicted that the Indian economy will suffer its deepest contraction on record this fiscal year and recent government stimulus does not go far enough to significantly boost activity depressed by the coronavirus pandemic. After shrinking a record 23.9% in the April-June quarter, the Indian economy was forecast to contract 10.4% and 5.0% in the third and fourth quarter, respectively, and merely stabilize in the first three months of 2021. For the current fiscal year ending March 31, Asia’s third-largest economy was predicted to shrink 9.8%, more than the RBI’s latest 9.5% projection, and 26 of 55 economists saw a contraction of 10% or more for the year.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 165.19 points or -0.70% to 23,474.27
  • Shanghai decreased 12.52 points or -0.38% to 3,312.50
  • Hang Seng increased 31.71 points or 0.13% to 24,786.13
  • ASX 200 decreased 18.00 points or -0.29% to 6,173.80
  • Kospi decreased 15.81 points or -0.67% to 2,355.05
  • SENSEX decreased 148.92 points or -0.37% to 40,558.49
  • Nifty50 decreased 41.2 points or -0.35% to 11,896.45

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.0015 or 0.21% to 0.71163
  • NZDUSD increased 0.0035 or 0.53% to 0.66800
  • USDJPY increased 0.25 or 0.24% to 104.90
  • USDCNY increased 0.02577 or 0.39% to 6.67036

Precious Metals:

  • Gold decreased 20.08 USD/t oz. or -1.04% to 1,904.41
  • Silver decreased 0.37 USD/t. oz or -1.48% to 24.700

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from 1,936.8B to 419.8B

Foreign Investments in Japanese Stocks decreased from 1,421.2B to -94.0B

 

Some economic news from today:

Hong Kong:

CPI (YoY) (Sep) decreased from -0.40% to -2.20%

 

EUROPE/EMEA:

The UK’s inflation rate, which tracks the prices of goods and services, climbed to 0.5% in September, from 0.2% in August. The end of cheaper restaurant meals pushed UK prices up last month after the Eat Out to Help Out scheme expired, an online news agency reported. The Consumer Prices Index (CPI) began rising quickly in September after the discount meals scheme ended, pushing up restaurant and café prices. Transport costs rose for the first time since March, partly because the price of second-hand cars was boosted by increased demand as people, reportedly, looked to reduce their reliance on public transport, said the Office for National Statistics (ONS).

The major Europe stock markets had a mixed day:

  • CAC 40 decreased -2.57 points or -0.05% to 4,851.38
  • FTSE 100 increased 9.15 points or 0.16% to 5,785.65
  • DAX 30 decreased 14.58 points or -0.12% to 12,543.06

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00338 or -0.29% to 1.18194
  • GBPUSD decreased 0.00495 or -0.38% to 1.30806
  • USDCHF increased 0.00145 or 0.16% to 0.90729

Some economic news from Europe today:

UK:

CBI Industrial Trends Orders (Oct) increased from -48 to -34

Germany:

GfK German Consumer Climate (Nov) decreased from -1.7 to -3.1

Norway:

Industrial Confidence (Q3) increased from -9.6 to 1.7

Unemployment Rate (Aug) increased from 5.2% to 5.3%

France:

French Business Survey (Oct) decreased from 94 to 93

Euro Zone:

Consumer Confidence (Oct) decreased from -13.9 to -15.5

US/AMERICAS:

Amy Coney Barrett was officially appointed to the US Supreme Court. Senate Republicans unanimously voted in Barrett 12-0. However, Senate Democrats opted to boycott the meeting calling it a “sham process.” A Supreme Court nomination entails a lifetime appointment without term limits. At 48-year-old, the new Justice is poised to make major legal decisions for the US for decades to come.

US jobless claims declined last week but remain well above pre-pandemic levels, according to the Labor Department. Initial claims totaled 787,000, a 55,000 declined from the week prior, and remained lower than analysts’ expectations of 860,000. Unadjusted claims totaled 756,617, or a 73,125 decline from the previous week. However, unemployment remains higher than it was during recent recessions. According to Reuters, weekly unemployment figures during the Great Recession (2007-2009) peaked at 665,000 showing the current data presents a dire situation for the US labor market.

Washington has approved the sale of $1.8 billion in arms to Taiwan. The move is likely to fuel tensions with China as the country views Taiwan as a province rather than an independent country. Back in August, China warned the US “not to send any wrong signals to ‘Taiwan independence’ elements to avoid severe damage to China-US relations.”

Tonight marks the final 2020 US presidential debate between Donald Trump and Joe Biden. The debate will air at 9 PM ET and is expected to have some influence over undecided voters. According to the mainstream media, Biden is leading in the early polls nationwide. The official US election will take place on November 3, but the results likely will not be available immediately due to mail-in voting and other discrepancies.

US Market Closings:

  • Dow advanced 152.84 points or 0.54% to 28,363.66
  • S&P 500 advanced 17.93 points or 0.52% to 3,453.49
  • Nasdaq advanced 21.31 points or 0.19% to 11,506.01
  • Russell 2000 advanced 26.48 points or 1.65% to 1,630.25

Canada Market Closings:

  • TSX Composite advanced 49.13 points or 0.3% to 16,279.36
  • TSX 60 advanced 3.89 points or 0.4% to 970.52

Brazil Market Closing:

  • Bovespa advanced 1,365.29 points or 1.36% to 101,917.73

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.61 USD/BBL or 1.52% to 40.6400
  • Brent increased 0.73 USD/BBL or 1.75% to 42.4600
  • Natural gas decreased 0.083 USD/MMBtu or -1.09% to 2.9900
  • Gasoline increased 0.0175 USD/GAL or 1.53% to 1.1578
  • Heating oil increased 0.0187 USD/GAL or 1.64% to 1.1586

The above data was collected around 16:45 EST on Thursday

 

  • Top commodity gainers: Sugar (1.93%), Cocoa (1.85%), Lumber (2.05%), and Coffee (2.45%)
  • Top commodity losers: Lean Hogs (-4.34%), Silver (-1.48%), Ethanol (-2.96%), and Wheat (-1.31%)

The above data was collected around 16:50 EST on Thursday.

BONDS:

Japan 0.04%(+1bp), US 2’s 0.16% (+1bps), US 10’s 0.86%(+5bps); US 30’s 1.68%(+5bps), Bunds -0.58% (+1bp), France -0.28% (+3bp), Italy 0.80% (+3bp), Turkey 13.43% (+48bp), Greece 1.03% (+12bp), Portugal 0.21% (+2bp); Spain 0.24% (+9bp) and UK Gilts 0.29% (+5bp).