Market Talk – April 14, 2021

Posted Apr 14, 2021 by Martin Armstrong |

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ASIA:

Investors are putting billions of dollars more into U.S. stock funds than Chinese ones, according to data from fund research firm EPFR Global. U.S. and China stock funds are the two regions that have attracted the most inflows from international investors over the past two quarters, Cameron Brandt, director of research at EPFR said.

Moody’s retained its forecast of double-digit growth in India’s gross domestic product (GDP) for FY22. In February, Moody’s had revised India’s FY22 growth outlook to 13.7% from 10.8% estimated earlier while maintaining sovereign credit rating at Baa3 (negative), the lowest investment grade rating. Japanese brokerage Nomura recently tempered its FY22 growth expectations for the Indian economy to 12.6% from 13.5% on account of the disruptions caused by the second COVID wave.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 130.62 points or -0.44% to 29,620.99
Shanghai increased 20.25 points or 0.60% to 3,416.72
Hang Seng increased 403.58 points or 1.42% to 28,900.83
ASX 200 increased 46.20 points or 0.66% to 7,023.10
Kospi increased 13.30 points or 0.42% to 3,182.38
SENSEX closed
Nifty50 closed

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00864 or 1.13% to 0.77325
NZDUSD increased 0.00831 or 1.18% to 0.71447
USDJPY decreased 0.06 or -0.05% to 108.95
USDCNY decreased 0.01568 or -0.24% to 6.52700

Precious Metals:

Gold decreased 7.53 USD/t oz. or -0.43% to 1,736.30

Silver increased 0.07 USD/t. oz or 0.26% to 25.396

Some economic news from last night:

Japan:

Core Machinery Orders (YoY) (Feb) decreased from 1.5% to -7.1%

Core Machinery Orders (MoM) (Feb) decreased from -4.5% to -8.5%

South Korea:

Unemployment Rate (Mar) decreased from 4.0% to 3.9%

Export Price Index (YoY) (Mar) increased from 0.6% to 5.6%

Import Price Index (YoY) (Mar) decreased from -0.3% to 9.0%

Australia:

Westpac Consumer Sentiment (Apr) increased from 2.6% to 6.2%

New Zealand:

RBNZ Interest Rate Decision remain the same at 0.25%

External Migration & Visitors (Feb) increased from -98.70% to -98.60%

Permanent/Long-Term Migration (Feb) increased from 550 to 674

Singapore:

GDP (QoQ) (Q1) decreased from 15.9% to 2.0%

GDP (YoY) (Q1) increased from -2.4% to 0.2%

Some economic news from today:

Indonesia:

Car Sales (YoY) (Mar) increased from -38.20% to 10.54%

EUROPE/EMEA:

Chief economist Andy Haldane is leaving the Bank of England to become chief executive of the Royal Society for Arts, Manufactures and Commerce (RSA). The central bank announced that Haldane will step down from the monetary policy committee (MPC) after its June meeting. He was with the central bank for three decades, seven of which as chief economist.

The European Central Bank has published the results of a public consultation on a potential digital euro as the institution inches closer to deciding whether to formally study such an initiative. According to a Wednesday announcement, the ECB received more than 8,200 responses to its public digital euro consultation — a personal record for the bank regarding participation in a public consultation. Of the total responses, 47% came from Germany, with a significant amount also coming from Italy and France, accounting for 15% and 11% of total responses, respectively. Launched in October 2020, the ECB’s digital euro public consultation has confirmed the ECB’s initial findings, providing valuable input for euro system’s decision in mid-2021 on starting a formal investigation into a digital euro.

The French economy will expand by 5% in 2021, Economy Minister Bruno Le Maire said in a newspaper interview, as a third lockdown to tackle the coronavirus pandemic has prompted a downward revision in the previous government forecast for 6% growth. French schools and non-essential stores such as clothing chains will now be shut for four weeks, after COVID-19 cases surged in recent weeks, edging up the number of patients in intensive care units. The latest restrictions will force some 150,000 businesses to temporarily close, and aid measures in April will cost 11 billion euros, the finance ministry has said.

The major Europe stock markets had a mixed day:

CAC 40 increased 24.48 points or 0.40% to 6,208.58
FTSE 100 increased 49.09 points or 0.71% to 6,939.58
DAX 30 decreased 25.21 points or -0.17% to 15,209.15

The major Europe currency markets had a green day today:

EURUSD increased 0.00323 or 0.27% to 1.19825
GBPUSD increased 0.00386 or 0.28% to 1.37925
USDCHF increased 0.00175 or 0.19% to 0.92252

Some economic news from Europe today:

UK:

Labour Productivity (Q4) decreased from 4.0% to -0.7%

Spain:

Spanish CPI (MoM) (Mar) remain the same at 1.0%

Spanish CPI (YoY) (Mar) remain the same at 1.3%

Spanish HICP (MoM) (Mar) increased from -0.6% to 1.9%

Spanish HICP (YoY) (Mar) increased from -0.1% to 1.2%

Euro Zone:

Industrial Production (MoM) (Feb) decreased from 0.8% to -1.0%

Industrial Production (YoY) (Feb) decrease from 0.1% to -1.6%

US/AMERICAS:

Coinbase (COIN) released its long-awaited IPO this Wednesday afternoon and opened at $381 with a valuation of $99.6 billion. The IPO was valued at $250 before its release, which would value the company at $65.3 billion. Numerous cryptocurrencies hit all-time highs ahead of the popular platform’s introduction on the stock exchange. Coinbase CEO Brian Armstrong stated that he wants his company to be viewed fairly, and hopes that the IPO will achieve that goal. “Basically we just ask that, hey, we want to be treated on those level playing field with traditional financial services at the very least and not have any kind of punishment for being in the crypto space,” Brian Armstrong stated.

“When is the housing market going to crash?” has become a top search on Google with the question being asked 2,450% more frequently in the past month. Despite low rates, high prices and low inventory have priced many out of the real estate market. Although mortgage rates are beginning to rise, it has not slowed the buying frenzy. Redfin reported that over 40% of homes sold over their listing price at the beginning of April. Numerous analysts do not believe that this will be a giant bubble that will pop, unlike the Great Recession, mortgage underwriting has strict guidelines and those lucky enough to purchase real estate have been vetted properly.

US Consumer prices advanced for the fourth consecutive month in March, with CPI advancing 0.6%. Inflation rose to a 2.5-year high to 2.6% compared to 1.7% in February. This is in stark contrast to the beginning of the pandemic when inflation went negative in March to April of 2020. Core inflation rose to 1.6% from 1.3% the previous month. Gas prices attributed to this gain significantly after rising 9.1%. Inflation is expected to continue rising in the coming months, but the decision-making branch of the Federal Reserve said it would allow inflation to run over their target for some time before adjusting monetary policy.

US Market Closings:

Dow advanced 53.62 points or 0.16% to 33,230.89
S&P 500 declined 19.93 points or -0.41% to 4,124.66
Nasdaq declined 138.26 points or -0.99% to 13,857.84
Russell 2000 advanced 18.79 points or 0.84% to 2,247.72

Canada Market Closings:

TSX Composite declined 32.04 points or -0.17% to 19,171.66
TSX 60 declined -1.46 points or -0.13% to 1,143.56

Brazil Market Closing:

Bovespa advanced 997.55 points or 0.84% to 120.294.68

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 3.12 USD/BBL or 5.18% to 63.3000
Brent increased 3.09 USD/BBL or 4.85% to 66.7600
Natural gas decreased 0.002 USD/MMBtu or -0.08% to 2.6170
Gasoline increased 0.0629 USD/GAL or 3.18% to 2.0386
Heating oil increased 0.0755 USD/GAL or 4.16% to 1.8900
Top commodity gainers: Crude Oil (5.18%), Brent (4.85%), Heating Oil (4.16%) and Rubber (3.39%)

Top commodity losers: Live Cattle (-0.63%), Palladium (-0.30%), Cocoa (-0.17%), and Gold (-0.43%)

The above data was collected around 13:25 EST on Wednesday.

BONDS:

Japan 0.093%(-1bp), US 2’s 0.1649%(+0%), US 10’s 1.6465%(+2.35bps); US 30’s 2.3318%(+0.02%), Bunds -0.308% (-2bp), France -0.0476% (-2bp), Italy 0.787% (+4bp), Turkey 17.48% (+2bp), Greece 0.949% (+3bp), Portugal 0.332% (+3.5bp); Spain 0.428% (+3.84bp) and UK Gilts 0.819% (+4bp).