Market Talk – April 5, 2022

ASIA:

Chinese Vice Premier Hu Chunhua called on Saturday for greater efforts to stabilize foreign trade amid a complex external environment, the official Xinhua news agency reported. Commerce Minister Wang Wentao said in March that China’s economy faced multiple challenges at home and abroad this year, including “huge” pressure from uncertainty over global trade and still-lackluster domestic consumption.

Five of China’s largest banks have said the country’s lenders face multiple headwinds this year that include the pandemic, global politics, and domestic turmoil in the real estate industry. Industrial and Commercial Bank of China warned that China faces “shrinking demand, disrupted supply and weakening expectations” in its annual earnings report. Agricultural Bank of China Ltd signaled the same in its full-year report. The non-performing loan ratios at four of the five lenders fell, though it increased at BoC.

India’s largest private lender HDFC Bank is buying its biggest shareholder in a $40 billion deal, the country’s biggest ever, creating a financial services titan to better tap the rising demand for credit. HDFC Bank’s deal with housing finance firm HDFC Ltd which owns about 21% of the lender, will build on its 68 million customers and expand its home loan portfolio significantly while also opening the scope for larger loans. HDFC Bank shares closed 10% higher on Monday, giving the firm a market value of 9.18 trillion rupees ($121.66 billion), while HDFC Ltd surged 9.3% to a valuation of 4.85 trillion rupees. J.P. Morgan, Goldman Sachs, and Citi were among financial advisers to HDFC Bank for the deal, while Credit Suisse, Kotak Securities and Jefferies were among advisers to HDFC Ltd.

Carmakers in India reported a sharp rise in annual sales for the fiscal year 2022 on Friday but warned of future risks from global supply chain disruptions. Automakers globally have been forced to make sharp production cuts over the past year as supply chain disruptions and booming demand for consumer electronics has led to an acute shortage of semiconductors. This has resulted in long wait times for car buyers.

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The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 70.49 points or 0.25% to 27,736.47 • Shanghai closed • Hang Seng increased 462.76 points or 2.10% to 22.502.31 • ASX 200 increased 19.90 points or 0.27% to 7,513.70 • Kospi increased 18.05 points or 0.66% to 2,757.90 • SENSEX increased 1,335.05 points or 2.25% to 60,611.74 • Nifty50 increased 382.95 points or 2.17% to 18,053.40

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.00443 or 0.59% to 0.75418
  • NZDUSD increased 0.00362 or 0.52% to 0.69581
  • USDJPY increased 0.243 or 0.20% to 122.790
  • USDCNY increased 0.0087 or 0.14% to 6.37563

Precious Metals:

  • Gold increased 6.84 USD/t oz. or 0.36% to 1,931.14 • Silver decreased 0.119 USD/t. oz or -0.48% to 24.492

Some economic news from last night:

Japan:

Monetary Base (YoY) increased from 7.6% to 7.9%

Australia:

MI Inflation Gauge (MoM) increased from 0.5% to 0.8% ANZ Job Advertisements (MoM) decreased from 10.9% to 0.4% Retail Sales (MoM) increased from 1.6% to 1.8%

Some economic news from today

India:

Nikkei Markit Manufacturing PMI (Mar) decreased from 54.9 to 54.0

Singapore:

Manufacturing PMI (Mar) decreased from 50.2 to 50.1

EUROPE/EMEA:

Investor morale in the Eurozone fell to its lowest level in nearly two years in April, a survey showed on Monday, pointing to the beginning of a recession in the second quarter of 2022. Sentix’s index for the Eurozone fell to -18.0 in April from -7.0 the previous month, hitting its lowest level since July 2020. A Reuters poll had pointed to a reading of -9.2. A current conditions index fell to -5.5 from 7.8, its lowest level since April last year, while an expectations index fell to -29.8 from -20.8, its lowest level since December 2011. Sentix said morale was dropping globally, although nowhere as sharply as in the Eurozone.

More companies expect international orders to be driving future growth than they do domestic demand, in the latest sign of weakening business confidence in Britain’s economy. A quarterly survey of more than a thousand companies with at least £1 million in turnover that trade overseas found that 37 percent named overseas markets as sources of growth, compared with only 34 percent citing the UK market. It is the first time since the Santander UK trade barometer research began in 2017 that overseas markets have trumped the domestic market as the main driver for company growth.

Related:  Market Talk - June 3, 2022

The major Europe stock markets had a green day:

  • CAC 40 increased 47.06 points or 0.70% to 6,731.37
  • FTSE 100 increased 21.02 points or 0.28% to 7,558.92
  • DAX 30 increased 71.68 points or 0.50% to 14,518.16

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00761 or -0.69% to 1.09724 • GBPUSD decreased 0.00094 or -0.07% to 1.31040 • USDCHF increased 0.00108 or 0.12% to 0.92655

Some economic news from Europe today:

Germany:

German Exports (MoM) (Feb) increased from -2.8% to 6.4% German Imports (MoM) (Feb) increased from -4.2% to 4.5% German Trade Balance (Feb) increased from 9.4B to 11.5B

France:

French Government Budget Balance (Feb) decreased from -15.9B to -37.6B

Spain:

Spanish Unemployment Change increased from -11.4K to -2.9K Euro Zone:

Sentix Investor Confidence (Apr) decreased from -7.0 to -18.0

US/AMERICAS:

Twitter shares soared 20% in pre-market trading after billionaire Elon Musk announced he bought a 9.2% stake in the company. Musk now owns a $2.89 billion stake in the social media giant or 73,486,938 shares. Musk frequently uses the social media platform himself and boasts 80 million followers. Interestingly, he has been a staunch critic of Twitter in recent weeks, leading rumors to swirl that there may be a future buyout.

President Biden amplified the US’ position on the war in Ukraine after calling President Putin a “war criminal.” Biden said he would like to see Putin held accountable for his actions and will further punish Russia with sanctions. The US president did not clarify what sanctions he would implement. However, he said that the US would continue supplying weapons and money to Ukraine.

Related:  Market Talk - April 12, 2022

JPMorgan Chase CEO Jamie Dimon announced at the annual shareholder meeting that he is prepared for a downturn in the economy amid the Russia-Ukraine war. “They present completely different circumstances than what we’ve experienced in the past—and their confluence may dramatically increase the risks ahead,” Dimon said, adding that investors “should prepare for the potential negative outcomes.” Although he is not concerned with JPMorgan’s ties to Russia, Dimon said the company will lose around $1 billion over time due to sanctions. “Along with the unpredictability of war itself and the uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation,” Dimon said.

US Market Closings:

  • Dow advanced 103.61 points or 0.3% to 34,921.88
  • S&P 500 advanced 36.78 points or 0.81% to 4,582.64
  • Nasdaq advanced 271.05 points or 1.9% to 14,532.55
  • Russell 2000 advanced 4.33 points or 0.21% to 2,095.44

Canada Market Closings:

  • TSX Composite advanced 132.65 points or 0.6% to 22,085.6
  • TSX 60 advanced 9.5 points or 0.72% to 1,336.07

Brazil Market Closing:

  • Bovespa declined 290.64 points or -0.24% to 121,279.51

ENERGY:

The oil markets had a green day today:

  • Crude Oil increased 2.69 USD/BBL or 2.71% to 101.9600 • Brent increased 2.21 USD/BBL or 2.12% to 106.6000 • Natural gas increased 0.064 USD/MMBtu or 1.12% to 5.7840 • Gasoline increased 0.043 USD/GAL or 1.36% to 3.1965 • Heating oil increased 0.0861 USD/GAL or 2.51% to 3.5101

The above data was collected around 12:23 EST on Monday

  • Top commodity gainers: Crude Oil (2.71%) and Heating Oil (2.51%), Rubber(3.38%), Cotton (2.45%) • Top commodity losers: Cocoa(-1.31%), Feeder Cattle (-1.81%), Lean Hogs(-1.60%) and Cheese (-1.39%)

The above data was collected around  13:34 EST on Monday.

BONDS:

Japan 0.210%(-0.5bp), US 2’s 2.46% (-0.004%), US 10’s 2.408% (+1.85bps); US 30’s 2.47% (+0.034%), Bunds 0.51% (-5.6bp), France 1.018% (-0.2bp), Italy 2.095% (-0.2bp), Turkey 23.73% (-11bp), Greece 2.605% (-7.7bp), Portugal 1.397% (-0.2bp); Spain 1.487% (+0.2bp) and UK Gilts 1.551% (-6bp).

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