Market Talk – May 12, 2021

Posted May 12, 2021 by Martin Armstrong |

Spread the love

ASIA:

As with most developed nations, China reported a significant decline in births last year (0.53%). The nation abandoned their one-child policy in 2016 that was put into effect in 1979, however, the population has continued to decline. China’s birth rate was 0.57% between 2000 and 2010, with a total population f 1.41 billion. The National Bureau of Statistics stated that 12 million babies were born in 2020, a 6 million decrease from 2016 when data was last collected. China’s working-age population (16-59) has also declined by 40 million over the last ten years, although authorities maintain that China has a strong and abundant workforce.

Japan’s SoftBank’s Vision Fund made history this Wednesday after reporting a record-high 4.03 trillion yen ($36.99 billion) in earnings. The group netted 4.99 trillion yen ($45.88 billion) in the fiscal year ending in March, surpassing Berkshire Hathaway’s $42.5 billion earnings last year. This marks the largest annual profit recorded by a Japanese company.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 461.08 points or -1.61% to 28,147.51
Shanghai increased 20.91 points or 0.61% to 3,462.75
Hang Seng increased 217.23 points or 0.78% to 28,231.04
ASX 200 decreased 52.10 points or -0.73% to 7,044.90
Kospi decreased 47.77 points or -1.49% to 3,161.66
SENSEX decreased 471.01 points or -0.96% to 48,690.80
Nifty50 decreased 154.25 points or -1.04% to 14,696.50

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.01042 or -1.33% to 0.77354
NZDUSD decreased 0.00991 or -1.36% to 0.71645
USDJPY increased 0.9 or 0.83% to 109.57
USDCNY increased 0.0316 or 0.49% to 6.45873

Precious Metals:

Gold decreased 15.76 USD/t oz. or -0.86% to 1,821.18
Silver decreased 0.51 USD/t. oz or -1.85% to 27.118

Some economic news from last night:

Japan:

Foreign Reserves (USD) (Apr) increased from 1,368.5B to 1,378.5B

South Korea:

Unemployment Rate (Apr) decreased from 3.9% to 3.7%

Australia:

Building Approvals (MoM) decreased from 21.6% to 17.4%

Some economic news from today:

China:

M2 Money Stock (YoY) (Apr) decreased from 9.4% to 8.1%

New Loans (Apr) decreased from 2,730.0B to 1,470.0B

Outstanding Loan Growth (YoY) (Apr) decreased from 12.6% to 12.3%

Chinese Total Social Financing (Apr) decreased from 3,340.0B to 1,850.0B

Japan:

Coincident Indicator (MoM) (Mar) increased from -1.7% to 3.2%

Leading Index (MoM) (Mar) increased from 0.6% to 4.3%

India:

CPI (YoY) (Apr) decreased from 5.52% to 4.29%

Cumulative Industrial Production (Mar) increased from -11.30% to -8.60%

Industrial Production (YoY) (Mar) increased from -3.4% to 22.4%

Manufacturing Output (MoM) (Mar) increased from -3.7% to 25.8%

EUROPE/EMEA:

Amazon won a large case against the EU today after the general court ruled that there was no concrete proof that Luxembourg provided the company illegal tax advantages. The EU originally requested that Amazon repay 250 million euros ($303 million) for unpaid taxes to Luxembourg where Amazon hosts its European subsidiary. “We welcome the Court’s decision, which is in line with our long-standing position that we followed all applicable laws and that Amazon received no special treatment,” a spokesperson for Amazon told reporters.

Lifting lockdown restrictions has helped to aid the UK’s economy, after March posted a 2.1% growth rate. However, the economy is still 8.7% under pre-pandemic levels. Head of economics at the British Chambers of Commerce, Suren Thiru, stated that the first quarter decline “should be followed by a robust rebound in the second quarter” due to pent-up demand and vaccinations. Thiru admitted that the coronavirus has likely caused the UK economy long-term economic damage that will becoming increasingly apparent as government support winds down, and the overall recovery may be slower than current forecasts.

The major Europe stock markets had a green day:

CAC 40 increased 11.96 points or 0.19% to 6,279.35
FTSE 100 increased 56.64 points or 0.82% to 7,004.63
DAX 30 increased 30.47points or 0.20% to 15,150.22

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00646 or -0.53% to 1.20817
GBPUSD decreased 0.00762 or -0.54% to 1.40618
USDCHF increased 0.0046 or 0.51% to 0.90831

Some economic news from Europe today:

UK:

NIESR Monthly GDP Tracker increased from -1.5% to 1.3%

Business Investment (QoQ) (Q1) decreased from 5.9% to -11.9%

Business Investment (YoY) (Q1) decreased from -7.4% to -18.1%

U.K. Construction Output (YoY) (Mar) increased from -3.3% to 6.0%

Construction Output (MoM) (Mar) increased from 2.3% to 5.8%

GDP (MoM) increased from 0.4% to 2.1%

GDP (QoQ) (Q1) decreased from 1.3% to -1.5%

GDP (YoY) (Q1) increased from -7.3% to -6.1%

Index of Services decreased from -1.9% to -2.0%

Industrial Production (MoM) (Mar) increased from 1.0% to 1.8%

Industrial Production (YoY) (Mar) increased from -3.5% to 3.6%

Manufacturing Production (YoY) (Mar) increased from -4.2% to 4.8%

Manufacturing Production (MoM) (Mar) increased from 1.3% to 2.1%

Monthly GDP 3M/3M Change increased from -1.7% to -1.5%

Trade Balance (Mar) decreased from -10.51B to -11.71B

Trade Balance Non-EU (Mar) decreased from -5.14B to -6.55B

Germany:

German CPI (MoM) (Apr) increased from 0.5% to 0.7%

German CPI (YoY) (Apr) increased from 1.7% to 2.0%

German HICP (MoM) (Apr) remain the same at 0.5%

German HICP (YoY) (Apr) increased from 2.0% to 2.1%

Norway:

GDP (QoQ) (Q1) decreased from 0.8% to -0.6%

GDP Mainland (QoQ) (Q1) decreased from 2.0% to -1.0%

France：

French CPI (MoM) (Apr) decreased from 0.6% to 0.1%

French CPI (YoY) increased from 1.1% to 1.2%

French HICP (MoM) (Apr) decreased from 0.7% to 0.2%

French HICP (YoY) (Apr) increased from 1.4% to 1.6%

Euro Zone:

Industrial Production (MoM) (Mar) increased from -1.2% to 0.1%

Industrial Production (YoY) (Mar) increased from -1.8% to 10.9%

US/AMERICAS:

Consumer prices in the US grew at the fastest pace in 12 years this April, according to data released this Wednesday by the Labor Department. CPI rose 0,8% last month, the largest gain posted since June 2009. Reuters economists had predicted a CPI reading of 0.2% for April. Food prices notable increased by 0.4%, while gas prices declined -1.4%. The Federal Reserve looks to the core personal consumption expenditures (PCE) index to determine inflation, which now stands at 1.8%.

Federal Reserve’s Vice Chairman Richard Clarida believes the US economy still needs the central bank’s support. “Progress is uneven in economic recovery; there is a substantial societal benefit to getting to max employment,” Clarida noted, as coronavirus-sensitive sectors remain contracted. He also noted that it will take “some time” to match workers with companies, and that the latest jobs report “conveys the wisdom of the outcome-based Fed policy.” Clarida insisted that the central bank will keep a close eye on inflation, and “does not have an unlimited tolerance for inflation,” despite policy makers saying they would allow inflation to run over the 2% target temporarily.

Senator Rand Paul publicly accused Dr. Anthony Fauci of lying to Congress by denying that he has funded research at the Wuhan lab. Fauci claimed the National Institute of Health (NIH) “has not ever and does not now fund gain of function research in the Wuhan Institute of Virology.” The National Institute of Allergy and Infectious Disease (NIAID), a subset of the NIH (where Fauci works as a director), is being accused of backing virologist gain-of-function funding at the Wuhan lab. “In a very minor collaboration, as part of a subcontract of a grant, we had a collaboration with some Chinese scientists,” Fauci later admitted, but claimed he did not know what the Chinese scientists did with their findings. “So, Dr. Fauci came to Congress yesterday and lied. We can’t prove the virus came from the lab. I’m not saying it did. I’m saying there is very much suspicious evidence that it might have,” Paul commented.

US Market Closings:

Dow declined 681.5 points or -1.99% to 33,587.66
S&P 500 declined 89.06 points or -2.14% to 4,063.04
Nasdaq declined 357.74 points or -2.67% to 13,031.68
Russell 2000 declined 71.85 points or -3.26% to 2,135.14

Canada Market Closings:

TSX Composite declined 166.27 points or -0.86% to 19,107.77
TSX 60 declined 7.12 points or -0.62% to 1,143.95

Brazil Market Closing:

Bovespa declined 3,253.98 points or -2.65% to 119,710.03

ENERGY:

The oil markets had a green day today:

Crude Oil increased 0.76 USD/BBL or 1.16% to 66.0400
Brent increased 0.72 USD/BBL or 1.05% to 69.2700
Natural gas increased 0.027 USD/MMBtu or 0.91% to 2.9820
Gasoline increased 0.0193 USD/GAL or 0.90% to 2.1592
Heating oil increased 0.0257 USD/GAL or 1.26% to 2.0674

Top commodity gainers: Palm Oil (4.00%), Coal (1.55%), Bitumen (3.19%) and Cocoa (2.10%)
Top commodity losers: Palladium (-2.34%), Orange Juice (-1.86%), Silver (-1.85%), and Lumber (-3.67%)

The above data was collected around 14:45 EST on Wednesday.

BONDS:

Japan 0.0820%(+1bp), US 2’s 0.17%(+0.006%), US 10’s 1.6898%(+6.58bps); US 30’s 2.4177%(+0.07%), Bunds -0.118% (+4.2bp), France 0.268% (+4.8bp), Italy 0.991% (+4bp), Turkey 17.49% (+9bp), Greece 1.034% (+2bp), Portugal 0.589% (+4.5bp); Spain 0.57% (+4.22bp) and UK Gilts 0.892% (+6bp).