Market Talk – May 3, 2021

Posted May 3, 2021 by Martin Armstrong |

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ASIA:

A report published by group of analysts says that the “peak” of China’s economic growth has already passed or will soon do so and momentum will only “wane” further for the remainder of the year, after slowing domestic and overseas demand led to lower-than-expected sentiment in the manufacturing and non-manufacturing sectors in April. The official manufacturing PMI – a survey of sentiment among factory owners – fell to 51.1 in April from 51.9 in March, the National Bureau of Statistics (NBS) announced on Friday. The result was below expected. The official non-manufacturing PMI – which measures morale in the services and construction sectors – fell to 54.9 in April from 56.3 in March. The reading was also below expected.

India’s trade deficit in goods was $15.24 billion in April, preliminary data released by the government on Sunday showed. Merchandise exports rose to $30.21 billion for the month from $10.17 billion a year earlier, while imports rose to $45.45 billion from $17.09 billion, the data showed.

Analysts in Japan predict that Japan’s economic growth will fall into negative territory for the January-to-March period, as consumer spending was down due to the declaration of a second state of emergency. Twelve research institutes released their projections ahead of the official GDP announcement scheduled for May 18. They all estimate negative annualized growth, ranging from minus 3.5 percent to 8.8 percent for the three months that ended in March, Japan’s fiscal fourth quarter. Japan’s GDP continued to improve after marking a record drop of minus 29.3 percent in the April-June period last year. The analysts project consumer spending is expected to fall from around minus 1 to 3 percent, due to declines in restaurant and hotel industries.

The major Asian stock markets had a mixed day today:

NIKKEI 225 closed
Shanghai closed
Hang Seng decreased 367.34 points or -1.28% to 28,357.54
ASX 200 increased 3.00 points or 0.04% to 7,028.80
Kospi decreased 20.66 points or -0.66% to 3,127.20
SENSEX decreased 63.84 points or -0.13% to 48,718.52
Nifty50 increased 3.05 points or 0.02% to 14,634.15

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00521 or 0.68% to 0.77629
NZDUSD increased 0.00432 or 0.60% to 0.72027
USDJPY decreased 0.24 or -0.22% to 109.07
USDCNY decreased 0.00168 or -0.03% to 6.47197

Precious Metals:

Gold increased 22.71 USD/t oz. or 1.28% to 1,791.30
Silver increased 0.93 USD/t. oz or 3.59% to 26.830

Some economic news from last night:

South Korea:

Nikkei Manufacturing PMI (Apr) decreased from 55.3 to 54.6

Australia:

AIG Manufacturing Index (Apr) increased from 59.9 to 61.7

Manufacturing PMI increased from 56.8 to 59.7

MI Inflation Gauge (MoM) remain the same at 0.4%

ANZ Job Advertisements (MoM) decreased from 7.8% to 4.7%

Indonesia:

Nikkei Manufacturing PMI (Apr) increased from 53.2 to 54.6

Some economic news from today:

India:

Nikkei Markit Manufacturing PMI (Apr) increased from 55.4 to 55.5

Singapore:

Manufacturing PMI (Apr) increased from 50.8 to 50.9

Indonesia:

Inflation (MoM) (Apr) increased from 0.08% to 0.13%

Inflation (YoY) (Apr) increased from 1.37% to 1.42%

Core Inflation (YoY) (Apr) decreased from 1.21% to 1.18%

Hong Kong:

GDP (QoQ) (Q1) increased from 0.5% to 5.3%

GDP (YoY) (Q1) increased from -2.8% to 7.8%

Australia:

Commodity Prices (YoY) increased from 27.2% to 34.7%

EUROPE/EMEA:

Britain’s economy is building momentum and the Bank of England is expected to sharply upgrade its annual growth forecasts next week, as rapid progress rolling out the Covid vaccine is fuelling a boom in consumer spending, a Guardian analysis report shows. As consumers return to high streets and pub beer gardens and take to alfresco dining, the Bank of England is poised to issue one of its most substantial economic growth upgrades in recent decades after a raft of positive data from the economy. However, with India suffering a devastating third wave and nearly 5 million UK workers still on furlough, there are concerns over rising unemployment in Britain after government wage support is scaled back this summer and closed entirely by the end of September.

After nearly a year of closed borders, the European Union could open in June to fully vaccinated vacationers from countries with low Covid infection rates in time for summer under a plan revealed on Monday. Officials hope the plan could be implemented by the end of June, a year since the EU closed its external borders to most travelers, but borders could open up sooner depending on how quickly European countries sign off on the proposal.

The major Europe stock markets had a green day:

CAC 40 increased 38.42 points or 0.61% to 6,307.90
FTSE 100 closed
DAX 30 increased 100.56 points or 0.66% to 15,236.47

The major Europe currency markets had a mixed day today:

EURUSD increased 0.00385 or 0.32% to 1.20586
GBPUSD increased 0.00981 or 0.71% to 1.39106
USDCHF decreased 0.00168 or -0.18% to 0.91144

Some economic news from Europe today:

Germany:

German Retail Sales (MoM) (Mar) increased from 2.7% to 7.7%

German Retail Sales (YoY) (Mar) increased from -6.6% to 11.0%

German Manufacturing PMI (Apr) decreased from 66.4 to 66.2

Spain:

Spanish Manufacturing PMI (Apr) increased from 56.9 to 57.7

Swiss:

procure.ch PMI (Apr) increased from 66.3 to 69.5

Italy:

Italian Manufacturing PMI (Apr) increased from 59.8 to 60.7

France:

French Manufacturing PMI (Apr) decreased from 59.2 to 58.9

French Car Registration (YoY) (Apr) increased from 191.4% to 568.6%

Norway:

Manufacturing PMI (Apr) decreased from 60.5% to 59.1

Euro Zone:

Manufacturing PMI (Apr) decreased from 63.3 to 62.9

US/AMERICAS:

Over the weekend it was announced that Vice Chairman Greg Abel will succeed Warren Buffett as the CEO of Berkshire Hathaway in the event of his retirement. The 90-year-old CEO does not currently have plans to retire, but appointed Abel as the man who will succeed him. Separately, Buffett said his company has seen “substantial inflation” and that price increases are now acceptable in business. Buffett commented on his company’s heavy real estate investments and noted that the pricing of housing, steel, and materials have rapidly increased. Berkshire Hathaway owns Benjamin Moore, Shaw Flooring, and Clayton Homes, which is one of the largest home builders in the US. Last week, Federal Reserve Chairman Jerome Powell stated he anticipated inflation hovering above the 2% target temporarily.

Robinhood, the Millennial favorited stock trading platform, profited $331 million in order flows during Q1, according the the Securities and Exchange Commission (SEC). That’s a gain from Q4’s figure of $221 million, the over three times the amount that the platform pulled in during Q1 of 2020. Despite backlash over the GameStop debacle, where Robinhood temporarily prevented users from trading, the company still plans to go public on the Nasdaq within the first half of this year. Warren Buffett called Robinhood a problematic “casino” style of trading, to which Robinhood replied, “people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing.”

US Market Closings:

Dow advanced 238.38 points or 0.7% to 34,113.23
S&P 500 advanced 11.49 points or 0.27% to 4,192.66
Nasdaq declined 67.56 points or -0.48% to 13,895.12
Russell 2000 advanced 11 points or 0.49% to 2,277.45

Canada Market Closings:

TSX Composite advanced 104.83 points or 0.55% to 19,213.16
TSX 60 advanced 4.41 points or 0.39% to 1,143.26

Brazil Market Closing:

Bovespa Advanced 315.64 points or 0.27% to 119,209.48

ENERGY:

The oil markets had a green day today:

Crude Oil increased 0.84 USD/BBL or 1.32% to 64.4200
Brent increased 0.79 USD/BBL or 1.18% to 67.5500
Natural gas increased 0.014 USD/MMBtu or 0.48% to 2.9450
Gasoline increased 0.0346 USD/GAL or 1.67% to 2.1109
Heating oil increased 0.0353 USD/GAL or 1.84% to 1.9577

Top commodity gainers: Silver (3.59%), Ethanol (4.72%), Palm Oil (4.83%) and Lumber (5.96%)
Top commodity losers: Live Cattle (-1.27%), Coffee (-2.47%), Orange Juice (-1.55%), and Sugar (-3.84%)

The above data was collected around 13:35 EST on Monday.

BONDS:

Japan 0.0890%(-1bp), US 2’s 0.16%(-0.002%), US 10’s 1.6065%(-2.45bps); US 30’s 2.286%(-0.01%), Bunds -0.2050% (-1bp), France 0.144% (-1.8bp), Italy 0.8340% (-3bp), Turkey 17.78% (+6bp), Greece 0.997% (+1bp), Portugal 0.463% (-2.4bp); Spain 0.454% (-2.24bp) and UK Gilts 0.843% (-0bp).