Market Talk – October 4, 2021


ASIA:

The US in cracking down on China to commit to phase one of the trade agreement made under the Trump Administration. China agreed to buy at least $200 billion in goods from the US between 2020 ad 2021. As of August, China had only reached 62% of their agreement. US Trade Representative Katherine Tai noted that the two economic superpowers have a “complex and competitive” relationship. “For too long, China’s lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world,” Tai stated. “It is increasingly clear that China’s plans do not include meaningful reforms to address the concerns that have been shared by the United States and many other countries.”

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 326.18 or -1.13% to 28,444.89
  • Shanghai closed
  • Hang Seng decreased 539.27 or -2.19% to 24,036.37
  • ASX 200 increased 93.00 points or 1.29% to 7,278.50
  • Kospi closed
  • SENSEX increased 533.74 points or 0.91% to 59,299.32
  • Nifty50 increased 159.20 points or 0.91% to 17,691.25

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00390 or 0.54% to 0.72870
  • NZDUSD increased 0.00210 or 0.31% to 0.69621
  • USDJPY decreased -0.03 or -0.02% to 110.93
  • USDCNY increased 0.01570 or 0.24% to 6.44906

 

Precious Metals:

  • Gold increased 7.69 USD/t oz. or 0.44% to 1,768.05
  • Silver increased 0.134 USD/t. oz or 0.59% to 22.654

 

Some economic news from last night:

Japan:

Monetary Base (YoY) decreased from 14.9% to 11.7%

Australia:

MI Inflation Gauge (MoM) increased from 0.0% to 0.3%

 

 

Some economic news from today:

Singapore:

Manufacturing PMI (Sep) decreased from 50.9 to 50.8

 

US/AMERICAS:

The average car price in the US spiked 10% YoY in August to $43,355, according to Kelley Blue Book (KBB). Despite the large price tag, demand for vehicles remains high amid a labor and supply shortage. The First Trust Nasdaq Global Auto Index Fund that tracks the sector is up nearly 47% this year after spiking by 53% in 2020. Many carmakers are now looking to transition to electric vehicles. Ford announced plans to invest $7 billion in two new manufacturing plants dedicated to electric vehicles. Tesla, the leader in electric cars, delivered 241,300 cars in Q3, marking a 70% increase.

In other transportation news, the International Air Transport Association (IATA) is anticipating a $12 billion loss next year. The association cut their losses for 2021 by 78% as travel is slowly resuming. The agency that represents 80% of global air traffic stated that losses in 2021 will total $51.8 billion, which is steeper than April’s forecast of $47.7 billion. Last year, world air travel declined by $137.7 billion, but the organization is optimistic that the worst part of the crisis is over. The IATA believes air travel will become profitable in 2021, and expects passenger numbers to reach 3.4 billion next year. The Biden Administration plans to ease restrictions for vaccinated international travelers next month, but clear guidelines have not been presented.

“Just get out of the way,” was President Joe Biden’s message to the GOP this Monday regarding the debt limit. GOP leader Mitch McConnell has stated that the Republicans will not support raising the debt ceiling and criticized the Biden Administration’s plan to spend an additional $3.5 trillion. The Biden Administration claims that the GOP is failing to pay for the trillions spent under the Trump Administration, primarily during the pandemic. As the October 18 deadline looms, every expert has warned of the detrimental effect a default would have on the global economy. “Bipartisanship is not a light switch that Speaker Pelosi and Leader Schumer may flip on to borrow money and flip off to spent it,” McConnell previously stated.

US Market Closings:

  • Dow declined 323.54 points or -0.94% to 34,002.92
  • S&P 500 declined 56.58 points or -1.3% to 4,300.46
  • Nasdaq declined 311.21 points or -2.14% to 14,255.49
  • Russell 2000 declined 24.16 points or -1.08% to 2,217.47

 

Canada Market Closings:

  • TSX Composite declined 98.62 points or -0.49% to 20,052.25
  • TSX 60 declined 4.6 points or -0.38% to 1,203.84

 

Brazil Market Closing:

  • Bovespa declined 2,506.55 points or -2.22% to 110,393.09

 

EUROPE/EMEA:

The European Medicines Agency (EMA), the European Union’s drug regulator, approved of the Pfizer-BioNTech vaccine booster for adults over 18. The agency claims that the booster potentially provides a rise in antibodies in people between 18 and 55 years of age if taken six months after their second dose. However, the agency admitted “there is no direct evidence that the [vaccine] has the ability to produce antibodies.” Instead, the EMA said it is “expected” that the booster shot “would increase protection at least in some patients.” Despite the lack of “direct evidence,” the vaccination will soon be made available.

An average of 100,000 UK residents traveled to the US every week prior to the coronavirus. An anonymous source has recently told The Independent that the Biden Administration’s vague reopen has left “airline executives tearing their hair out.” The source claims the White House has failed to explain their policy as to when travel will resume. Despite the uncertainty, airlines such as Virgin Atlantic have begun booking reservations from the UK to the US, with Virgin claiming a 600% YoY increase in bookings.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 40.03 points or -0.61% to 6,477.66
  • FTSE 100 decreased 16.06 points or -0.23% to 7,011.01
  • DAX 30 decreased 119.89 points or -0.79% to 15,036.55

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00280 or 0.24% to 1.16201
  • GBPUSD increased 0.00670 or 0.50% to 1.36105
  • USDCHF decreased 0.00600 or -0.64% to 0.92444

 

Some economic news from Europe today:

Spain:

Spanish Unemployment Change increased from -82.6K to -76.1K

Swiss:

Retail Sales (YoY) (Aug) increased from -2.3% to 0.5%

CPI (YoY) (Sep) remain the same at 0.9%

CPI (MoM) (Sep) decreased from 0.2% to 0.0%

Euro Zone:

Sentix Investor Confidence (Oct) decreased from 19.6 to 16.9

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 1.71 USD/BBL or 2.25% to 77.5900
  • Brent increased 1.96 USD/BBL or 2.47% to 81.2400
  • Natural gas increased 0.237 USD/MMBtu or 4.22% to 5.8560
  • Gasoline increased 0.0600 USD/GAL or 2.67% to 2.3100
  • Heating oil increased 0.0521 USD/GAL or 2.19% to 2.4348

 

The above data was collected around 16:28 EST on Monday

 

  • Top commodity gainers: Natural Gas (4.22%) and Gasoline (2.67%), Brent (2.47%) and Crude Oil (2.25%)
  • Top commodity losers: Sugar (-1.84%), Rhodium (-4.29%), Rubber (-2.53%), and lean Hogs (-1.63%)

 

 

The above data was collected around 16:34 EST on Monday.

 

 

BONDS:

 

Japan 0.054%(+0.4bp), US 2’s 0.28%(+0.014%), US 10’s 1.4841%(+1.91bps); US 30’s 2.0463%(+0.01%),Bunds -0.2160% (+0.3bp), France 0.1310% (+0.2bp), Italy 0.8214% (+0.16bp), Turkey 17.77% (+5bp), Greece 0.8670% (+3.1bp), Portugal 0.338% (+0.70bp); Spain 0.452% (+2.01bp) and UK Gilts 1.006% (+0.2bp).

 

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