Market Talk – April 28, 2021

Posted Apr 28, 2021 by Martin Armstrong |

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ASIA:

Japanese retail sales rose at the fastest pace in five months in March as consumer demand recovered from the huge hit it took from the coronavirus pandemic last year. The world’s third-largest economy has emerged from last year’s slump on an export recovery, though a glacial vaccine rollout and a resurgence in infections are threatening household demand. Retail sales jumped 5.2% in March from a year earlier, government data showed on Wednesday, a larger gain than the median market forecast for a 4.7% rise. That marked the fastest rise since a 6.4% advance in October and the first positive growth in four months.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 62.08 points or 0.21% to 29,053.97
Shanghai increased 14.46 points or 0.42% to 3,457.07
Hang Seng increased 129.80 points or 0.45% to 29,071.34
ASX 200 increased 30.90 points or 0.44% to 7,064.70
Kospi decreased 33.95 points or -1.06% to 3,181.47
SENSEX increased 789.70 points or 1.61% to 49,733.84
Nifty50 increased 211.50 points or 1.44% to 14,864.55

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.0001 or 0.02% to 0.77697
NZDUSD increased 0.0037 or 0.51% to 0.72413
USDJPY increased 0.0590 or 0.05% to 108.82
USDCNY decreased 0.0068 or -0.10% to 6.47560

Precious Metals:

Gold decreased 3.05 USD/t oz. or -0.17% to 1,773.64
Silver decreased 0.26 USD/t. oz or -0.99% to 25.980

Some economic news from last night:

Japan:

Retail Sales (YoY) (Mar) increased from -1.5% to 5.2%

South Korea:

Consumer Confidence (Apr) increased from 100.5 to 102.2

Australia:

CPI (YoY) (Q1) increased from 0.9% to 1.1%

CPI (QoQ) (Q1) decreased from 0.9% to 0.6%

CPI Index Number (Q1) increased from 117.20 to 117.90

Trimmed Mean CPI (YoY) (Q1) decreased from 1.2% to 1.1%

Trimmed Mean CPI (QoQ) (Q1) decreased from 0.4% to 0.3%

Weighted mean CPI (YoY) (Q1) decreased from 1.4% to 1.3%

Weighted mean CPI (QoQ) (Q1) decreased from 0.5% to 0.4%

Singapore

Unemployment Rate (Q1) decreased from 3.3% to 2.9%

EUROPE/EMEA:

The European Central Bank decided to keep its policy unchanged while market players look for clues on when its massive monetary stimulus might start to be wound down. The central bank said last month it was going to increase government bond purchases — though still within the planned envelope of 1.85 trillion euros ($2.2 trillion) until March 2022 — to address rising bond yields in the euro zone. At the time, the ECB expressed concerns with borrowing costs rising sharply for euro area governments before the economy has fully recovered from the coronavirus shock. As a result, data from Deutsche Bank showed the ECB purchased 74 billion euros in bonds in March, up from 53 billion and 60 billion euros in February and January.

The major Europe stock markets had a green day:

CAC 40 increased 33.22 points or 0.53% to 6,306.98
FTSE 100 increased 18.70 points or 0.27% to 6,963.67
DAX 30 increased 42.91 points or 0.28% to 15,292.18

The major Europe currency markets had a mixed day today:

EURUSD increased 0.0007 or 0.05% to 1.20957
GBPUSD increased 0.0011 or 0.08% to 1.39137
USDCHF decreased 0.0012 or -0.13% to 0.91280

Some economic news from Europe today:

Germany:

GfK German Consumer Climate (May) decreased from -6.1 to -8.8

Norway:

Core Retail Sales (MoM) (Mar) increased from -0.3% to 0.0%

France:

French Consumer Confidence (Apr) remain the same at 94

Swiss:

ZEW Expectations (Apr) increased from 66.7 to 68.3

UK:

BRC Shop Price Index (YoY) increased from -2.4% to -1.3%

US/AMERICAS:

Joe Biden released his next $1.8 trillion new spending and tax credit plan this Wednesday. This comes one month after the Biden administration released a $2 trillion coronavirus stimulus package, however, this time the richest of Americans will foot the bill with new taxes. The program will allocate $225 billion toward child care, allowing families to pay on a sliding scale and only for a fraction of their take home pay. Another $225 billion will create a national comprehensive family and medical leave program, as America is one of the only developed nations without such a plan. Preschools willl receive $200 billion and enrollment will be free for all 3 and 4 year-olds. Community college will be free for all students as well, using $109 billion in funds to achieve that goal.

The Federal Open Market Committee (FOMC) voted, as expected to leave interest rates on hold as the economy continues to recover. “The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” the FOMC released in an official statement. “In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the committee stated.

Federal Reserve Chairman Jerome Powell stated that economic activity, employment, household spending, business manufacturing and production has all began to recovery from the pandemic as noted by ongoing economic data. Powell stated that economic recover is “uneven” and “far from complete.” The sectors most affected by the pandemic remain weak, such as food and hospitality. Unemployment in March stood at 6%, still above the pre-pandemic low of 3.5%, but Powell believed this figure is “understated” as workforce participation remains low. The chairman stated that the path of the virus and measures taken to control the spread will determine the course of the recovery.

US Market Closings:

Dow declined 164.55 points or -0.48% to 33,820.38
S&P 500 declined 3.54 points or -0.08% to 4,183.18
Nasdaq declined 39.19 points or -0.28% to 14,051.03
Russell 2000 advanced 2.89 points or 0.13% to 2,304.16

Canada Market Closings:

TSX Composite declined 181.86 points or 0.95% to 19,356.95
TSX 60 advanced 12.25 points or 1.07% to 1,153.39

Brazil Market Closing:

Bovespa advanced 1,664.15 points or 1.39% to 121,052.52

ENERGY:

The oil markets had a green day today:

Crude Oil increased 1.20 USD/BBL or 1.91% to 64.1400
Brent increased 1.09 USD/BBL or 1.64% to 67.5100
Natural gas increased 0.03 USD/MMBtu or 1.11% to 2.9020
Gasoline increased 0.04 USD/GAL or 1.90% to 2.0587
Heating oil increased 0.04 USD/GAL or 1.86% to 1.9412

Top commodity gainers: Crude Oil (1.91%), Gasoline (1.90%), Tin (2.66%) and Corn (2.59%)
Top commodity losers: Platinum (-1.87%), Palm Oil (-3.12%), Oat (-1.73%), and Sugar (-3.18%)

The above data was collected around 11:26 EST on Wednesday.

BONDS:

Japan 0.0980%(+2bp), US 2’s 0.17%(-0.008%), US 10’s 1.6378%(+2bps); US 30’s 2.3035%(+0.01%), Bunds -0.2500% (+0bp), France 0.0212% (+2bp), Italy 0.8340% (+1bp), Turkey 17.84% (+3bp), Greece 0.952% (+4bp), Portugal 0.446% (+3bp); Spain 0.438% (+2bp) and UK Gilts 0.799% (+2bp).