Market Talk – October 25, 2023

ASIA:

China plans to implement a new round of fiscal stimulus to support its economic recovery, utilizing a well-established strategy that relies heavily on debt and state spending. This approach lacks the more profound reforms suggested by a growing number of analysts. Some government advisers propose raising the 2024 budget deficit target beyond the current 3% of GDP, enabling China to issue more bonds to boost its economy. The country’s strong third-quarter economic growth increases the likelihood of meeting its 2023 growth target of around 5%.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 207.57 points or 0.67% to 31,269.92
• Shanghai increased 11.87 points or 0.40% to 2,974.11
• Hang Seng decreased 93.80 points or 0.55% to 17,085.33
• ASX 200 decreased 2.60 points or -0.04% to 6,854.30
• Kospi decreased 20.34 points or -0.85% to 2,363.17
• SENSEX decreased 522.82 points or -0.81% to 64,049.06
• Nifty50 decreased 159.60 points or -0.83% to 19,122.15

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00225 or -0.35% to 0.63325
• NZDUSD decreased 0.00193 or -0.33% to 0.58227
• USDJPY increased 0.029 or 0.02% to 149.939
• USDCNY increased 0.01207 or 0.17% to 7.32447

The above data was collected around 12:00 EST.

Precious Metals:

• Gold increased 10.80 USD/t oz. or 0.55% to 1,980.91
• Silver decreased 0.081 USD/t. oz or -0.35% to 22.849

The above data was collected around 12:07 EST.

EUROPE/EMEA:

Euro zone banks reduced access to credit in the third quarter, while demand from households and businesses dropped more than anticipated due to high borrowing costs and a worsening economic outlook. The European Central Bank’s Bank Lending Survey revealed that the ECB’s interest rate hikes aimed at controlling inflation were impacting credit creation more severely than expected. Banks tightened their lending standards for both companies and households during this period due to economic pessimism and reduced liquidity resulting from the ECB’s policy tightening. The proportion of lenders tightening their credit approval criteria was higher than previously predicted, especially for mortgages and consumer loans. This situation reinforces the case for the central bank to consider a pause in its actions.

The major Europe stock markets had a green day today:

• CAC 40 increased 21.42 points or 0.31% to 6,915.07
• FTSE 100 increased 24.64 points or 0.33% to 7,414.34
• DAX 30 increased 12.24 points or 0.08% to 14.892.18

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0005 or -0.05% to 1.05830
• GBPUSD decreased 0.00201 or -0.17% to 1.21389
• USDCHF increased 0.00191 or 0.21% to 0.89511

The above data was collected around 12:10 EST.

US/AMERICAS:

Boeing cut its 737 Max delivery forecast as production issues hurt third-quarter results. The company expects to hand over between 375 and 400 of its workhorse planes this year, down from a previous estimate of 400 to 450. The sales in the manufacturer’s commercial aircraft unit rose 25% to $7.88 billion from the third quarter of 2022, enhanced by deliveries of wide-body 787 Dreamliner planes. However, lower 737 deliveries and abnormal production costs led to a negative operating margin of 8.6%. The company’s net loss tapered to nearly $1.64 billion, or $2.70 a share, for the third quarter compared with the year-earlier period when it had a loss of $3.31 billion, or $5.49 a share.

US Market Closings:

• Dow declined 105.45 points or -0.32% to 33,035.93
• S&P 500 declined 60.91 points or -1.43% to 4,186.77
• Nasdaq declined 318.65 points or -2.43% to 12,821.22
• Russell 2000 declined 28.07 points or -1.67% to 1,651.43

Canada Market Closings:

• TSX Composite declined 38.64 points or -0.2% to 18,947.85
• TSX 60 declined 2.11 points or -0.18% to 1,139.03

Brazil Market Closing:

• Bovespa declined 931.93 points or -0.82% to 112,829.97

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.589 USD/BBL or 0.70% to 84.329
• Brent increased 0.823 USD/BBL or 0.93% to 88.893
• Natural gas increased 0.022 USD/MMBtu or 0.74% to 2.9930
• Gasoline increased 0.0026 USD/GAL or 0.11% to 2.2702
• Heating oil decreased 0.0542 USD/GAL or -1.78% to 2.9907

The above data was collected around 12:14 EST.

• Top commodity gainers: Platinum (2.51%), Lean Hogs (1.82%), HRC Steel (8.62%) and Tea (2.89%)
• Top commodity losers: Wheat (-1.66%), Coffee (-3.72%), Heating Oil (-1.78%) and Rhodium (-9.47%)

The above data was collected around 12:21 EST.

BONDS:

Japan 0.865% (+1.9bp), US 2’s 5.10% (-0.007%), US 10’s 4.9122% (+7.22bps); US 30’s 5.05% (+0.088%), Bunds 2.885% (+5.1bp), France 3.515% (+5.2bp), Italy 4.916% (+6.9bp), Turkey 25.90% (-8bp), Greece 4.286% (+4.1bp), Portugal 3.633% (+8.8bp); Spain 4.003% (+5.2bp) and UK Gilts 4.611% (+7.1bp)

The above data was collected around 12:24 EST.