Market Talk – August 5, 2021

Posted Aug 5, 2021 by Martin Armstrong |

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ASIA:

according to a new ranking, which predicts the Chinese economy will grow faster than India’s over the next decade. The data shows that China was able to increase its ranking despite US tariffs by exporting to other regions.

India’s benchmark stock index—the NSE Nifty 50—crossed 16,000 for the first time Tuesday as investors bet that the country’s central bank later this week will leave interest rates at historic lows to facilitate growth after a deadly wave of coronavirus and months of economically devastating lockdowns. Over the past month, domestic interest has underpinned recent market gains. According to Bloomberg, local mutual funds and insurance firms purchased about $2.5 billion of Indian stocks in July, helping offset $1.7 billion of foreign outflows. Moreover, the Securities and Exchange Board of India (SEBI) reported a 35% increase of new retail accounts opened in the financial year ended March.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 144.04 points or 0.52% to 27,728.12
Shanghai decreased 10.67 points or -0.31% to 3,466.55
Hang Seng decreased 221.86 or -0.84% to 26,204.69
ASX 200 increased 7.90 points or 0.11% to 7,511.10
Kospi decreased 4.25 points or -0.13% to 3,276.13
SENSEX increased 123.07 points or 0.23% to 54,492.84
Nifty50 increased 35.80 points or 0.22% to 16,294.60

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00260 or 0.36% to 0.74071
NZDUSD increased 0.00190 or 0.27% to 0.70600
USDJPY increased 0.22000 or 0.20% to 109.71
USDCNY decreased 0.00460 or -0.07% to 6.45850

Precious Metals:

Gold decreased 5.04 USD/t oz. or -0.28% to 1,806.37
Silver decreased 0.09 USD/t. oz or -0.34% to 25.271

Some economic news from last night:

Japan:

Foreign Bonds Buying increased from -1,083.0B to 225.6B

Foreign Investments in Japanese Stocks increased from -58.5B to 3.2B

Australia:

Exports (MoM) (Jun) decreased from 6% to 4%

Imports (MoM) (Jun) decreased from 3% to 1%

Trade Balance (Jun) increased from 9.681B to 10.496B

Some economic news from today:

Indonesia:

GDP (YoY) (Q2) increased from -0.74% to 7.07%

GDP (QoQ) (Q2) increased from -0.96% to 3.31%

Singapore:

Retail Sales (YoY) (Jun) decreased from 79.9% to 25.8%

Retail Sales (MoM) (Jun) increased from -6.5% to 1.8%

EUROPE/EMEA:

On Thursday, the Bank of England said it could see a modest reduction ahead in the huge support it has provided to Britain’s economy during the COVID-19 pandemic and set out how it could gradually tighten monetary policy. For now, the central bank decided to keep its stimulus at full speed, even though it expects inflation to jump to 4.0% around the end of the year. Only one of the BoE’s eight monetary policy-makers, Michael Saunders, voted to reduce the size of its bond-buying program, which remains unchanged at 895 billion pounds ($1.25 trillion). The vote to hold its benchmark interest rate at a historic low of 0.1% was unanimous, as expected. BoE said it would start reducing its stock of bonds when its policy rate reaches 0.5% by not reinvesting the proceeds of maturing debt, as long as that made sense for the economy.

The major Europe stock markets had a mixed day:

CAC 40 increased 34.96 points or 0.52% to 6,781.19
FTSE 100 decreased 3.43 points or -0.05% to 7,120.43
DAX 30 increased 52.54 points or 0.33% to 15,744.67

The major Europe currency markets had a green day today:

EURUSD increased 0.00000 or 0.00% to 1.18379
GBPUSD increased 0.00420 or 0.30% to 1.39297
USDCHF increased 0.00010 or 0.01% to 0.90652

Some economic news from Europe today:

Germany:

German Factory Orders (MoM) (Jun) increased from -3.2% to 4.1%

IHS Markit Construction PMI (Jul) increased from 47.0 to 47.1

German Car Registration (YoY) decreased from 24.5% to -24.9%

Norway:

Unemployment Rate increased from 5.0% to 5.1%

France:

French Industrial Production (MoM) (Jun) increased from -0.4% to 0.5%

UK:

Construction PMI (Jul) decreased from 66.3 to 58.7

BoE MPC vote cut (Aug) remain the same at 0

BoE MPC vote hike (Aug) remain the same at 0

BoE MPC vote unchanged (Aug) decreased from 9 to 8

BoE QE Total (Aug) remain the same at 875B

BoE Interest Rate Decision (Aug) remain the same at 0.10%

US/AMERICAS:

The S&P 500 reached an all-time high this Thursday after rising by 26.44 points to 4,429.1. Penn National Gaming Inc. led the index’s rise after advancing 9.088%. Wynn Resorts Ltd (8.33%), American Airlines (7.5%), and Royal Caribbean (7.5%) also fueled the historic day of trading as travel and hospitality stocks begin to recover from pandemic lows.

The Labor Department recorded a total of 385,000 initial jobless claims for the week ending on July 31. This marks a 14,000 decline from the week prior and is in line with the Fed’s forecast that employment will begin increasing toward the fall. Continuing claims reached a pandemic low of 2.93 million. This is the first time continuing claims dropped beneath 3 million since March 2020. Tomorrow the highly anticipated jobs report for July will be released.

The US trade deficit reached an all-time high after jumping 6.7% to $75.7 billion. The Commerce Department reported a $1.2 billion increase in exports, outweighed by a $6 billion rise in imports. The current year-to-date trade deficit is now $135.8 billion, representing a 46.4% YoY increase.

Canada experienced a 13-year high surplus in trade this past June. According to Statistics Canada, the nation’s trade surplus reached C$3.23 billion in June, although analysts had anticipated a deficit of C$0.68 billion, Exports grew 8.7% to C$53.76 billion.

US Market Closings:

Dow advanced 271.58 points or 0.78% to 35,064.25
S&P 500 advanced 26.44 points or 0.6% to 4,429.1
Nasdaq advanced 114.58 points or 0.78% to 14,895.12
Russell 2000 advanced 39.69 points or 1.81% to 2,236.01

Canada Market Closings:

TSX Composite advanced 45.75 points or 0.23% to 20,375.48
TSX 60 advanced 2.38 points or 0.19% to 1,223.68

Brazil Market Closing:

Bovespa declined 168.29 points or -0.14% to 121,632.92

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 0.75 USD/BBL or 1.10% to 68.9000
Brent increased 0.72 USD/BBL or 1.02% to 71.1000
Natural gas decreased 0.01 USD/MMBtu or -0.31% to 4.1450
Gasoline increased 0.02 USD/GAL or 1.03% to 2.2732
Heating oil increased 0.02 USD/GAL or 1.20% to 2.0989

The above data was collected around 12:55 EST on Thursday

Top commodity gainers: Oat (4.50%), Sugar (3.57%), Corn (1.69%) and Coal (2.13%)
Top commodity losers: Rubber (-1.57%), Methanol (-3.46%), Palm Oil (-1.82%), and Lumber (-4.87%)

The above data was collected around 13:03 EST on Thursday.

BONDS:

Japan 0.009%(+1bp), US 2’s 0.20%(+0.02%), US 10’s 1.2118%(+3bps); US 30’s 1.86%(+0.023%), Bunds -0.5040% (-1bp), France -0.1640% (-2bp), Italy 0.5389% (-2bp), Turkey 16.87% (+11bp), Greece 0.5330% (-2bp), Portugal 0.105% (-4bp); Spain 0.207% (+4bp) and UK Gilts 0.519% (+1bp).