Market Talk – March 16, 2023

ASIA:

Asia was an outlier for Zara owner Inditex last year, the only region where profits fell as China faced COVID-19 lockdowns, while profit ballooned in the Americas, the fashion retailer’s annual report showed on Thursday. Inditex, the world’s biggest fashion retailer, reported record annual sales on Wednesday. It has been expanding in the United States and downsizing in China, which in 2019 was its second-biggest single market after Spain, delivering 8% of the group’s pre-tax profit. The company made a pre-tax profit of 105 million euros ($111.31 million) in China in its 2022 financial year, which ended on Jan. 31, 2023, down 47% from the previous year. China’s share of the total pre-tax profit fell to 2% from 4.7% the previous year. The United States, which in 2018 contributed just 1.1% of Inditex’s pre-tax profit, accounted for 7.9% of pre-tax profit in 2022. The Americas as a whole brought in 1.1 billion euros of profit, 21% of the group total.

India on Thursday approved purchases of missiles, helicopters, artillery guns and electronic warfare systems worth $8.5 billion as it sought to add more teeth to its military. The Defence Acquisition Council (DAC), the top government body for capital acquisition approvals for the Indian military, approved the orders worth 705 billion rupees ($8.52 billion) for all its services, the Defence Ministry said in a statement. All orders would be placed with Indian companies, it said, keeping with a push by Prime Minister Narendra Modi’s government to boost domestic defense manufacturing.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 218.87 points or -0.80% to 27,010.61
• Shanghai decreased 36.42 points or -1.12% to 3,226.89
• Hang Seng decreased 335.96 points or -1.72% to 19,203.91
• ASX 200 decreased 103.40 points or -1.46% to 6,965.50
• Kospi decreased 1.81 points or -0.08% to 2,377.91
• SENSEX increased 78.94 points or 0.14% to 57,634.84
• Nifty50 increased 13.45 points or 0.08% to 16,985.60

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00369 or 0.56% to 0.66519
• NZDUSD decreased 0.00148 or -0.24% to 0.61692
• USDJPY increased 0.16 or 0.12% to 133.560
• USDCNY increased 0.01159 or 0.17% to 6.90449

Precious Metals:

• Gold decreased 0.63 USD/t oz. or -0.03% to 1,917.47
• Silver decreased 0.207 USD/t. oz or -0.95% to 21.578

Some economic news from last night:

Japan:

Adjusted Trade Balance increased from -1.82T to -1.19T

Exports (YoY) (Feb) increased from 3.5% to 6.5%

Trade Balance (Feb) increased from -3,498.6B to -897.7B

Australia:

Employment Change (Feb) increased from -11.0K to 64.6K

Full Employment Change (Feb) increased from -42.4K to 74.9K

Unemployment Rate (Feb) decreased from 3.7% to 3.5%

New Zealand:

GDP (QoQ) (Q4) decreased from 1.7% to -0.6%

Some economic news from today:

Japan:

Industrial Production (MoM) (Jan) decreased from 0.3% to -5.3%

Hong Kong:

Unemployment Rate (Feb) decreased from 3.4% to 3.3%

EUROPE/EMEA:

The dollar fell and the euro rose on Thursday after the European Central Bank raised interest rates as planned despite market chaos in recent days, in a sign the Federal Reserve also will raise rates next week as both stay on track to tame inflation. The dollar and euro stuck to a narrow range before the ECB announced a half-percentage point rate hike as promised to curb inflation, with markets pricing more than an 80% likelihood that the Fed will raise rates by a quarter point on March 22.

The major Europe stock markets had a green day:

• CAC 40 increased 140.01 points or 2.03% to 7,025.72
• FTSE 100 increased 65.58 points or 0.89% to 7,410.03
• DAX 30 increased 231.84 points or 1.57% to 14,967.10

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00267 or 0.25% to 1.06017
• GBPUSD increased 0.00395 or 0.33% to 1.21045
• USDCHF decreased 0.00189 or -0.20% to 0.93111

Some economic news from Europe today:

Italy:

Italian CPI (MoM) (Feb) increased from 0.1% to 0.2%

Euro Zone:

Deposit Facility Rate (Mar) increased from 2.50% to 3.00%

ECB Marginal Lending Facility increased from 3.25% to 3.75%

ECB Interest Rate Decision (Mar) increased from 3.00% to 3.50%

US/AMERICAS:

Retail sales in the US slowed this February by 0.4%, according to the US Census Bureau. Americans are beginning to spend less as inflation rages on. Grocery prices rose 10.2% on a 12-month rolling basis, down from January’s reading of 11.3%, while spending on groceries remained relatively stagnant on a monthly basis. Forbes reported that consumers are opting for grocery-brand products. Kroger saw a 10.1% uptick in private-label food brand sales. Rodney McMullen, CEO and chairman of Kroger, claims store-brand products can save consumers between 7% and 10%. Shelter’s 12-month rolling index rose 8.1%, the largest increase in 40 years. Shelter prices accounted for 70% of the all-items index in February.

US Market Closings:

• Dow advanced 371.98 points or 1.17% to 32,246.55
• S&P 500 advanced 68.35 points or 1.76% to 3,960.28
• Nasdaq advanced 283.23 points or 2.48% to 11,717.28
• Russell 2000 advanced 25.29 points or 1.45% to 1,771.24

Canada Market Closings:

• TSX Composite advances 160.17 points or 0.83% to 19,539.01
• TSX 60 advanced 9.34 points or 0.8% to 1,174.46

Brazil Market Closing:

• Bovespa advanced 759.21 points or 0.74% to 103,434.66

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 1.159 USD/BBL or 1.71% to 68.769
• Brent increased 1.201 USD/BBL or 1.63% to 74.891
• Natural gas increased 0.0934 USD/MMBtu or 3.83% to 2.5324
• Gasoline increased 0.0529 USD/GAL or 2.17% to 2.4913
• Heating oil increased 0.0256 USD/GAL or 0.98% to 2.6305

The above data was collected around 13:45 EST on Thursday

• Top commodity gainers: Natural Gas (3.83%), Gasoline (2.17%), Lumber (26.22%) and Cocoa (2.78%)
• Top commodity losers: Bitumen (-7.82%), Lean Hogs (-5.30%), Methanol (-2.54%) and HRC Steel (-2.87%)

The above data was collected around 13:55 EST Thursday.

BONDS:

Japan 0.288% (-4bp), US 2’s 4.15% (+0.178%), US 10’s 3.5752% (+8.12bps); US 30’s 3.71% (+0.019%), Bunds 2.274% (+15.6bp), France 2.818% (+13.2bp), Italy 4.178% (+7.7bp), Turkey 11.08% (+9bp), Greece 4.252% (-0.7bp), Portugal 3.242% (+14.8bp); Spain 3.372% (+12.2bp) and UK Gilts 3.425% (+10.5bp).

The post Market Talk – March 16, 2023 first appeared on Armstrong Economics.