Market Talk – May 11, 2021

Posted May 11, 2021 by Martin Armstrong |

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ASIA:

Moody’s Investors Service on Tuesday slashed India’s growth forecast for the current financial year to 9.3 per cent saying that the second wave of coronavirus infections hampers economic recovery and increases risk of longer-term scarring. With this, Moody’s has joined several analysts who revised their GDP forecasts for India in the face of a second wave of COVID-19 infections in the country. Revising its projections for India’s GDP growth, Moody’s said that the second wave of COVID-19 is expected to be less disruptive than the first wave. The rating agency also ruled out any chances of a rating upgrade in the near future. Instead, it warned against self-reinforcing economic and financial risks as they may put more pressure on the rating.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 909.75 points or -3.08% to 28,608.59

Shanghai increased 13.85 points or 0.40% to 3,441.85

Hang Seng decreased 581.85 points or -2.03% to 28,013.81

ASX 200 decreased 75.80 points or -1.06% to 7,097.00

Kospi decreased 39.87 points or -1.23% to 3,209.43

SENSEX decreased 340.60 points or -0.69% to 49,161.81

Nifty50 decreased 91.60 points or -0.61% to 14,850.75

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00016 or 0.02% to 0.78383

NZDUSD increased 0.00019 or 0.03% to 0.72698

USDJPY decreased 0.31 or -0.29% to 108.51

USDCNY increased 0.00851 or 0.13% to 6.43046

Precious Metals:

Gold decreased 0.91 USD/t oz. or -0.05% to 1,834.53

Silver increased 0.17 USD/t. oz or 0.62% to 27.480

Some economic news from last night:

China:

CPI (MoM) (Apr) increased from -0.5% to -0.3%

CPI (YoY) (Apr) increased from 0.4% to 0.9%

PPI (YoY) (Apr) increased from 4.4% to 6.8%

Japan:

Household Spending (YoY) (Mar) increased from -6.6% to 6.2%

Household Spending (MoM) (Mar) increased from 2.4% to 7.2%

New Zealand:

Electronic Card Retail Sales (YoY) (Apr) increased from 5.1% to 108.7%

Electronic Card Retail Sales (MoM) (Apr) increased from 0.8% to 4.0%

Indonesia:

Retail Sales (YoY) (Mar) increased from -18.1% to -14.6%

Some economic news from today:

Indonesia:

Car Sales (YoY) (Apr) increased from 10.54% to 902.90%

EUROPE/EMEA:

Official figures are set to show a smaller hit than first feared in the first quarter for UK economy. Experts predict that a resilient performance in March will have helped limit the overall impact in the first quarter as the economy becomes more adept at weathering Covid lockdowns. The latest data from the Office for National Statistics (ONS) is expected to reveal that gross domestic product (GDP) – a measure of the size of the economy – grew by 1.4% month-on-month in March despite restrictions remaining firmly in place. The Bank of England last week forecast that first-quarter GDP would fall by 1.5% – far less than the 4% plunge it had warned over at the start of the lockdown. It also hiked its growth outlook for the full year to 7.25% – which would be the best year of growth since the Second World War – as the UK stages a vaccine-fuelled recovery

The major Europe stock markets had a negative day:

CAC 40 decreased 118.60 points or -1.86% to 6,267.39

FTSE 100 decreased 175.69 points or -2.47% to 6,947.99

DAX 30 decreased 280.66 points or -1.82% to 15,119.75

The major Europe currency markets had a green day today:

EURUSD increased 0.00238 or 0.20% to 1.21641

GBPUSD increased 0.00319 or 0.23% to 1.41593

USDCHF increased 0.00231 or 0.26% to 0.90280

Some economic news from Europe today:

UK:

BRC Retail Sales Monitor (YoY) (Apr) increased from 20.3% to 39.6%

Germany:

German WPI (YoY) (Apr) increased from 4.4% to 7.2%

German WPI (MoM) (Apr) decreased from 1.7% to 1.1%

German ZEW Current Conditions (May) increased from -48.8 to -40.1

German ZEW Economic Sentiment (May) increased from 70.7 to 84.4

Italy:

Italian Industrial Production (MoM) (Mar) decreased from 0.1% to -0.1%

Italian Industrial Production (YoY) (Mar) increased from -0.8% to 37.7%

Euro Zone:

ZEW Economic Sentiment (May) increased from 66.3 to 84.0

US/AMERICAS:

Pfizer authorized its coronavirus vaccine for adolescents between 12 and 15. Canada is the only country to date to approve the vaccination for younger individuals, lowering the age to 12 on May 5. “Today’s action allows for a younger population to be protected from COVID-19, bringing us closer to returning to a sense of normalcy and to ending the pandemic,” Dr. Janet Woodcock, the acting commissioner of the FDA stated. Pfizer is now testing the vaccination on children as young as 2-years-old and hopes to approve the vaccination for the 2-to-11-year-old population by September. Going even further, the company would like to begin testing the vaccine on 6-month-old babies at the end of the year.

While numerous analysts have blamed the added unemployment stimulus pay for April’s lackluster jobs report, others are concerned that low wages are to blame for people’s reluctance to return to work, especially those who are making more on unemployment. President Joe Biden is encouraging employers to pay higher wages, however, he also noted that the added unemployment pay will expire. Work “We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said. “People will come back to work if they’re paid a decent wage,” he continued.

CEOs in the US have seen drastic pay increase averaging 29% in 2020, according to the Guardian. The average pay for a CEO was $15.3 million last year, according to the Institute for Policy Studies. Contrarily, the median pay for employees was $28,187 in 2020, marking a -2% decrease YoY.

US Market Closings:

Dow declined 473.66 points or -1.36% to 24,269.16
S&P 500 declined 36.33 points or -0.87% to 4,152.1
Nasdaq declined 12.43 points or -0.09% to 13,389.43
Russell 2000 declined 5.71 points or -0.26% to 2,206.99

Canada Market Closings:

TSX Composite declined 87.84 points or -0.45% to 19,274.04
TSX 60 declined 4.9 points or -0.42% to 1,151.07

Brazil Market Closing:

Bovespa advanced 1,054.98 points or 0.87% to 122,964.01

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 0.09 USD/BBL or 0.14% to 65.0100

Brent increased 0.01 USD/BBL or 0.01% to 68.3300

Natural gas increased 0.013 USD/MMBtu or 0.44% to 2.9450

Gasoline decreased 0.0014 USD/GAL or -0.07% to 2.1320

Heating oil increased 0.0128 USD/GAL or 0.63% to 2.0294

Top commodity gainers: Wheat (2.06%), Coal (1.91%), Sugar (3.54%) and Corn (2.24%)

Top commodity losers: Cocoa (-1.94%), Bitumen (-2.21%), Lumber (-2.28%), and Oat (-3.16%)

The above data was collected around 13:05 EST on Tuesday.

BONDS:

Japan 0.0780%(-0bp), US 2’s 0.16%(+0.008%), US 10’s 1.6271%(+2.51bps); US 30’s 2.3498%(+0.03%), Bunds -0.2040% (+1bp), France 0.227% (+5.9bp), Italy 0.945% (+5.5bp), Turkey 17.37% (+4bp), Greece 1.0180% (+2bp), Portugal 0.549% (+5.6bp); Spain 0.525% (+5.14bp) and UK Gilts 0.836% (+4.7bp).