Market Talk – May 16, 2023

ASIA:

China’s industrial output and retail sales growth in April fell short of expectations, indicating a loss of momentum in the economy at the beginning of the second quarter. This has increased pressure on policymakers to support the post-COVID recovery. The data also revealed a further decline in property investment, raising concerns about the outlook for the world’s second-largest economy. Industrial output grew by 5.6% compared to the previous year, lower than the anticipated 10.9% increase. However, it was the fastest growth rate since September 2022. Retail sales, on the other hand, increased by 18.4%, the highest since March 2021, but still lower than the expected 21.0% growth. These year-on-year figures were influenced by the strict lockdowns and restrictions imposed in major cities in April 2022 due to the pandemic, which severely impacted China’s growth in the previous year.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 216.65 points or 0.73% to 29,842.99
• Shanghai decreased 19.75 points or -0.60% to 3,290.99
• Hang Seng increased 7.12 points or 0.04% to 19,978.25
• ASX 200 decreased 32.40 points or -0.45% to 7,234.70
• Kospi increased 0.89 points or 0.04% to 2,480.24
• SENSEX decreased 413.24 points or -0.66% to 61,932.47
• Nifty50 decreased 112.35 points or -0.61% to 18,286.50

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00416 or -0.62% to 0.66564
• NZDUSD decreased 0.00125 or -0.20% to 0.62275
• USDJPY increased 0.515 or 0.38% to 136.625
• USDCNY increased 0.03412 or 0.49% to 6.99342

Precious Metals:

• Gold decreased 22.9 USD/t oz. or -1.13% to 1,997.70
• Silver decreased 0.444 USD/t. oz or -1.84% to 23.666

Some economic news from last night:

China:

Fixed Asset Investment (YoY) (Apr) decreased from 5.1% to 4.7%

Industrial Production (YoY) (Apr) increased from 3.9% to 5.6%

Chinese Industrial Production YTD (YoY) (Apr) increased from 3.0% to 3.6%

Chinese Unemployment Rate (Apr) decreased from 5.3% to 5.2%

Australia:

Westpac Consumer Sentiment (May) decreased from 9.4% to -7.9%

Some economic news from today:

New Zealand:

GlobalDairyTrade Price Index decreased from 2.5% to -0.9%

EUROPE/EMEA:

Italy recorded a trade surplus of 7.542 billion euros in March, the largest since July 2021, due to a rise in exports by 4.7% YoY and a decrease in imports by 9.8%. This marks the highest surplus in the month of March since the introduction of the euro in 1999. However, Italy still registered a trade deficit of 916 million euros with other European Union countries, compared to a deficit of 36 million euros in March 2022, with exports rising by 3.0% YoY and imports by 6.1.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 12.20 points or -0.16% to 7,406.01
• FTSE 100 decreased 26.62 points or -0.34% to 7,751.08
• DAX 30 decreased 19.31 points or -0.12% to 15,897.93

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00146 or -0.13% to 1.08574
• GBPUSD decreased 0.0048 or -0.38% to 1.24790
• USDCHF increased 0.00129 or 0.14% to 0.89689

Some economic news from Europe today:

UK:

Average Earnings Index +Bonus (Mar) remain the same at 5.8%

Claimant Count Change (Apr) increased from 26.5K to 46.7K

Employment Change 3M/3M (MoM) (Mar) increased from 169K to 182K

Labour Productivity decreased from 0.4% to -1.4%

Unemployment Rate (Mar) increased from 3.8% to 3.9%

Italy:

Italian CPI (MoM) (Apr) increased from -0.4% to 0.4%

Germany:

German ZEW Current Conditions (May) decreased from -32.5 to -34.8

German ZEW Economic Sentiment (May) decreased from 4.1 to -10.7

Euro Zone:

GDP (QoQ) (Q1) decreased from 0.3% to 0.1%

GDP (YoY) (Q1) remain the same at 1.3%

Trade Balance (Mar) increased from 3.7B to 25.6B

ZEW Economic Sentiment (May) decreased from 6.4 to -9.4

US/AMERICAS:

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder sentiment in the US rose to 60 in May 2023, up from 55 in April 2023. The index measures builder insights of single-family home sales and expectations for the next six months. The increase in sentiment is attributed to a decline in mortgage rates and a rise in consumer confidence. However, the index is still below the pre-pandemic level of 72, and the housing market continues to face challenges such as soaring mortgage rates and high prices for building materials.

US Market Closings:

• Dow declined 336.46 points or -1.01% to 33,012.14
• S&P 500 declined 26.38 points or -0.64% to 4,109.9
• Nasdaq declined 22.16 points or -0.18% to 12,343.05
• Russell 2000 declined 25.37 points or -1.44% to 1,736.18

Canada Market Closings:

• TSX Composite declined 297.9 points or -1.45% to 20,242.07
• TSX 60 declined 19.3 points or -1.56% to 1,221.36

Brazil Market Closing:

• Bovespa declined 835.44 points or -0.77% to 108,193.68

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.453 USD/BBL or -0.64% to 70.657
• Brent decreased 0.265 USD/BBL or -0.35% to 74.965
• Natural gas increased 0.0625 USD/MMBtu or 2.63% to 2.4375
• Gasoline decreased 0.0089 USD/GAL or -0.36% to 2.4631
• Heating oil decreased 0.0251 USD/GAL or -1.06% to 2.3529

The above data was collected around 11:43 EST on Tuesday

• Top commodity gainers: Natural Gas (2.63%), Methanol (1.12%), Bitumen (1.71%) and Coffee (2.13%)
• Top commodity losers: Cocoa (-5.22%), Soybeans (-2.41%), Rapeseed (-3.19%) and Palm Oil (-4.40%)

The above data was collected around 11:54 EST Tuesday.

BONDS:

Japan 0.399% (-1.1bp), US 2’s 4.09% (+0.084%), US 10’s 3.5641% (+5.61bps); US 30’s 3.89% (+0.048%), Bunds 2.34% (+3bp), France 2.935% (+5bp), Italy 4.224% (+4.3bp), Turkey 9.74% (-307bp), Greece 4.084% (+7.8bp), Portugal 3.185% (+4.7bp); Spain 3.419% (+4bp) and UK Gilts 3.819% (+0.3bp).

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