Market Talk – June 29, 2023

ASIA:

A recent report revealed that internet shutdowns in Manipur and Punjab, India, had a significant economic impact. The shutdowns cost the Indian economy an estimated $1.9 billion, led to a loss of $118 million in foreign investment, and resulted in approximately 21,268 job losses. This highlights India’s high risk of internet shutdowns, which stood at 16 percent in 2023, one of the highest in the world. The report also noted that global internet shutdowns reached a record high in 2022, with governments implementing restrictions during civil unrest, exams, and elections, causing major economic consequences. Governments often mistakenly believe that shutting down the internet can control unrest, misinformation, and cybersecurity threats. However, these shutdowns severely disrupt economic activity, impacting e-commerce, time-sensitive transactions, employment, business-customer communications, and creating financial and reputational risks for companies.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 40.15 points or 0.12% to 33,234.14
• Shanghai decreased 6.99 points or -0.22% to 3,182.38
• Hang Seng decreased 237.69 points or -1.24% to 18,934.36
• ASX 200 decreased 1.60 points or -0.02% to 7,194.90
• Kospi decreased 14.17 points or -0.55% to 2,550.02
• SENSEX closed
• Nifty50 closed

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00318 or 0.48% to 0.66308
• NZDUSD decreased 0.00033 or -0.05% to 0.60707
• USDJPY increased 0.305 or 0.21% to 144.765
• USDCNY increased 0.01954 or 0.27% to 7.26174

Precious Metals:

• Gold increased 1.92 USD/t oz. or 0.10% to 1,909.34
• Silver decreased 0.123 USD/t. oz or -0.54% to 22.597

Some economic news from last night:

Japan:

Retail Sales (YoY) (May) increased from 5.1% to 5.7%

Australia:

Retail Sales (MoM) (May) increased from 0.0% to 0.7%

New Zealand:

ANZ Business Confidence (Jun) increased from -31.1 to -18.0

Some economic news from today:

Japan:

Household Confidence (Jun) increased from 36.0 to 36.2

EUROPE/EMEA:

European Union leaders are discussing the possibility of using frozen Russian assets in European accounts to generate funds for rebuilding Ukraine. However, they are concerned about the legality and potential impact on the euro’s international status. The World Bank estimates that Ukraine will require at least $411 billion for post-war reconstruction, and the EU and its allies want Russia to contribute to this cost. One proposal is to utilize the interest earned from Russian assets while keeping the assets themselves intact. This approach could potentially generate around €3 billion ($3.3 billion) annually, according to Anders Ahnlid, the director general of the Swedish National Board of Trade and the head of the EU working group handling frozen Russian assets.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 26.41 points or 0.36% to 7,312.73
• FTSE 100 decreased 28.80 points or -0.38% to 7,471.69
• DAX 30 decreased 2.28 points or -0.01% to 15,946.72

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00306 or -0.28% to 1.08804
• GBPUSD decreased 0.00241 or -0.19% to 1.26159
• USDCHF increased 0.00185 or 0.21% to 0.89865

Some economic news from Europe today:

Spain:

Spanish CPI (YoY) (Jun) decreased from 3.2% to 1.9%

Spanish HICP (YoY) (Jun) decreased from 2.9% to 1.6%

Germany:

German CPI (MoM) (Jun) increased from -0.1% to 0.3%

German CPI (YoY) (Jun) increased from 6.1% to 6.4%

US/AMERICAS:

The US economy grew at an annualized rate of 1.3% in the first quarter of 2023, according to the “second” estimate released by the Bureau of Economic Analysis, which is a slight revision from the initial estimate of 1.1% reported last month. The change was mostly driven by an upward revision to private inventory investment, which includes finished goods, materials, and works in progress being saved for a later date. Despite the first-quarter slowdown, consumer spending, which accounts for about two-thirds of economic output, rose at a 3.8% annual pace, the most in nearly two years.

US Market Closings:

• Dow advanced 269.76 points or 0.8% to 34,122.42
• S&P 500 advanced 19.58 points or 0.45% to 4,396.44
• Nasdaq declined -0.42 of a point or unchanged at 13,591.33
• Russell 2000 advanced 22.88 points or 1.23% to 1,881.59

Canada Market Closings:

• TSX Composite advanced 94.32 points or 0.48% to 19,913.17
• TSX 60 advanced 5.44 points or 0.46% to 1,199.94

Brazil Market Closing:

• Bovespa advanced 1,701.33 points or 1.46% to 118,382.65

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 0.19 USD/BBL or 0.27% to 69.750
• Brent increased 0.058 USD/BBL or 0.08% to 74.088
• Natural gas increased 0.0515 USD/MMBtu or 1.93% to 2.7195
• Gasoline increased 0.0232 USD/GAL or 0.89% to 2.6266
• Heating oil increased 0.0118 USD/GAL or 0.49% to 2.4185

The above data was collected around 12:32 EST on Thursday

• Top commodity gainers: Natural Gas (1.93%), Methanol (3.05%), Canola (1.97%) and Orange Juice (3.78%)
• Top commodity losers: Milk (-2.02%), Palladium (-2.15%), Coffee (-2.14%) and Sugar (-3.37%)

The above data was collected around 12:41 EST Thursday.

BONDS:

Japan 0.382% (-0.8bp), US 2’s 4.88% (+0.158%), US 10’s 3.856% (+14.4bps); US 30’s 3.92% (+0.108%), Bunds 2.423% (+10.9bp), France 2.959% (+11.6bp), Italy 4.112% (+14.1bp), Turkey 16.34% (+13bp), Greece 3.724% (+11.6bp), Portugal 3.163% (+11.8bp); Spain 3.42% (+13.2bp) and UK Gilts 4.381% (+6.4bp).

The post Market Talk – June 29, 2023 first appeared on Armstrong Economics.