Market Talk – June 14, 2021

Posted Jun 14, 2021 by Martin Armstrong |

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ASIA:

China has accused the G7 of “political manipulation” after it criticized Beijing over a range of issues. In a joint statement at the end of a three-day summit, leaders of the G7 countries urged China to “respect human rights and fundamental freedoms.” Experts generally agree that China has detained as many as a million Uyghurs and other Muslims and imprisoned hundreds of thousands more in its crackdown in Xinjiang, which began in 2017. There have been widespread reports of physical and psychological torture inside prisons and detention camps in the region. China denies the allegations.

India’s industrial output growth was estimated at 134.4% in April from a year earlier, government data showed on Friday, a sharp recovery reflecting a base effect due to the pandemic lockdown that hit economic activity last year. According to government data, the industrial output index rose to 126.6 in April from 54.0 in April last year, when the lockdown hit the production. The production index measures factory output in manufacturing, mining and electricity generation.

The major Asian stock markets had a green day today:

NIKKEI 225 increased 213.07 points or 0.74% to 29,161.80
Shanghai closed
Hang Seng closed
ASX 200 closed
Kospi increased 2.81 points or 0.09% to 3,252.13
SENSEX increased 76.77 points or 0.15% to 52,551.53
Nifty50 increased 12.50 points or 0.08% to 15,811.85

The major Asian currency markets had a green day today:

AUDUSD increased 0.00151 or 0.20% to 0.77175
NZDUSD increased 0.00151 or 0.21% to 0.71466
USDJPY increased 0.32 or 0.29% to 109.99
USDCNY increased 0.01158 or 0.18% to 6.40685

Precious Metals:

Gold decreased 12.35 USD/t oz. or -0.66% to 1,864.29
Silver increased 0.057 USD/t. oz or 0.20% to 27.947

Some economic news from last night:

New Zealand:

External Migration & Visitors (Apr) increased from -97.40% to 1,755.40%

Permanent/Long-Term Migration (Apr) increased from 619 to 1,037

Visitor Arrivals (MoM) increased from -12.4% to 588.3%

Some economic news from today:

Japan :

Capacity Utilization (MoM) (Apr) decreased from 5.6% to 1.1%

Industrial Production (MoM) (Apr) increased from 1.7% to 2.9%

India:

WPI Food (YoY) (May) decreased from 4.92% to 4.31%

WPI Fuel (YoY) (May) increased from 20.94% to 37.61%

WPI Inflation (YoY) (May) increased from 10.49% to 12.94%

WPI Manufacturing Inflation (YoY) (May) increased from 9.01% to 10.83%

CPI (YoY) (May) increased from 4.23% to 6.30%

EUROPE/EMEA:

The UK economy grew by 2.3% in April as the easing of Covid-19 lockdown measures fuelled a rebound in consumer spending, according to official figures. The Office for National Statistics (ONS) said GDP rose for the third consecutive month as pandemic restrictions were scaled back across all four nations of the UK, with the economy growing at the fastest pace since the July reopening from lockdown last year. Rishi Sunak, the chancellor, said the latest figures were “a promising sign that our economy is beginning to recover.” The ONS said the annual rate of growth in April was 27.6%, demonstrating the difference from the worst month of the pandemic a year earlier, as the economy recovers from the biggest collapse in output for more than 300 years.

The major Europe stock markets had a mixed day:

CAC 40 increased 15.69 points or 0.24% to 6,616.35
FTSE 100 increased 12.62 points or 0.18% to 7,146.68
DAX 30 decreased 19.63 points or -0.13% to 15,673.64

The major Europe currency markets had a green day today:

EURUSD increased 0.00172 or 0.14% to 1.21250
GBPUSD increased 0.00227 or 0.16% to 1.41180
USDCHF increased 0.00048 or 0.05% to 0.89899

Some economic news from Europe today:

Swiss:

PPI (YoY) (May) increased from 1.8% to 3.2%

PPI (MoM) (May) increased from 0.7% to 0.8%

Euro Zone:

Industrial Production (MoM) (Apr) increased from 0.4% to 0.8%

Industrial Production (YoY) (Apr) increased from 11.5% to 39.3%

US/AMERICAS:

Russian President Vladimir Putin said that he is willing to extradite cyber hackers to the US if the US is willing to do the same. Cyber security has been a major concern for the US, previously accusing Russia of hacking major databases, disrupting supply chains, and even influencing elections. The two world leaders are expected to meet at a summit on Jun 16 in Geneva. “If we agree to extradite criminals, then of course Russia will do that, we will do that, but only if the other side, in this case the United States, agrees to the same and will extradite the criminals in question to the Russian Federation,” Putin said.

In other cyber security news, Bank of America admitted that the company has been spending over $1 billion annually to prevent cyber attacks. CEO Brian Moynihan said that the company’s budget was around $3 to $400 million about a decade ago, showing the increasing threat companies face over hacking concerns.

JPMorgan CEO Jamie Dimon has directed his company to begin “effectively stockpiling” cash as he believes inflation is here to stay. With a balance sheet of over $500 million, Dimon stated that they are awaiting higher rates before dumping cash back into the market. “I think you have a very good chance inflation will be more than transitory,” he stated. Dimon also commented on how online payment platforms are jeopardizing the future of banks, noting that services such as PayPal, which currently host a larger market capitalization than any US bank.

US Market Closings:

Dow declined 85.85 points or -0.25% to 34,393.75
S&P 500 advanced 7.71 points or 0.18% to 4,255.15
Nasdaq advanced 104.72 points or 0.74% to 14,174.14
Russell 2000 declined 9.66 points or -0.41% to 2,326.15

Canada Market Closings:

TSX Composite advanced 19.3 points or 0.1% to 20,157.65
TSX 60 advanced 2.62 points or 0.22% to 1,205.45

Brazil Market Closing:

Bovespa advanced 725.27 points or 0.56% to 130,166.3

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 0.53 USD/BBL or 0.75% to 71.4400
Brent increased 0.57 USD/BBL or 0.78% to 73.2600
Natural gas increased 0.003 USD/MMBtu or 0.09% to 3.2990
Gasoline decreased 0.0039 USD/GAL or -0.18% to 2.1822
Heating oil increased 0.0065 USD/GAL or 0.31% to 2.1272

The above data was collected around 12:24 EST on Monday

Top commodity gainers: Platinum (1.14%), Cocoa (1.53%), Feeder Cattle (1.67%) and Aluminum (0.96%)
Top commodity losers: Corn (-3.21%), Palm Oil (-5.16%), Soybeans (-2.25%), and Lumber (-4.16%)

The above data was collected around 12:30 EST on Monday.

BONDS:

Japan 0.0400%(+1bp), US 2’s 0.16%(+0.008%), US 10’s 1.4956%(+3.36bps); US 30’s 2.1864%(+0.04%), Bunds -0.2490% (+2bp), France 0.128% (+2.5bp), Italy 0.7831% (+3.52bp), Turkey 17.26% (-10bp), Greece 0.7540% (+1.4bp), Portugal 0.405% (+4.6bp); Spain 0.4000% (+3.47bp) and UK Gilts 0.742% (+4.2bp).