Market Talk – January 23, 2024

ASIA:

Chinese authorities are reportedly considering measures to stabilize the declining stock market, aiming to mobilize around 2 trillion yuan ($278.53 billion) from offshore accounts of state-owned enterprises. The funds would be used to create a stabilization fund, allowing the purchase of shares onshore through the Hong Kong exchange link. While Chinese stocks initially rose in response to the news, they later reversed course, remaining broadly flat. The CSI300 Index was near a five-year low, and the Shanghai Composite Index stayed below the psychologically significant 2,800-point mark. China’s stock markets have faced challenges at the beginning of the year due to uneven economic growth and a recent decline in home sales, causing concern among foreign investors.

The Indian government has raised the import duty on gold and silver findings, essential for jewelry production, as well as on precious metal coins, from 11% to 15%, effective January 22. This adjustment aligns the duties on these items with those on gold and silver bars. The Ministry of Finance also increased the import duty on spent catalysts containing precious metals from 10.1% to 14.35%. The measure aims to prevent the circumvention of duties on gold and silver bars, responding to a recent surge in imports of gold findings, such as hooks and clasps, used in jewelry making during the past two months.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 29.38 points or -0.08% to 36,517.57
• Shanghai increased 14.64 points or 0.53% to 2,770.98
• Hang Seng increased 392.80 points or 2.63% to 15,353.98
• ASX 200 increased 38.30 points or 0.51% to 7,514.90
• Kospi increased 14.26 points or 0.58% to 2,478.61
• SENSEX decreased 1,053.10 points or -1.47% to 70,370.55
• Nifty50 decreased 333.00 points or -1.54% to 21,238.80

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00062 or 0.09 to 0.65762
• NZDUSD increased 0.00123 or 0.20% to 0.60873
• USDJPY increased 0.286 or 0.19% to 148.376
• USDCNY decreased 0.0263 or -0.37% to 7.16630

The above data was collected around 16:00 EST.

Precious Metals:

• Gold increased 7.22 USD/t oz. or 0.36% to 2,028.21
• Silver increased 0.361 USD/t. oz or 1.63% to 22.443

The above data was collected around 16:03 EST.

EUROPE/EMEA:

The Bank of England is anticipated to consider a cautious move toward lowering interest rates, which are currently at their highest level in nearly 16 years, as signs suggest a easing of the inflation crisis. Governor Andrew Bailey and other top officials had previously dismissed talks of rate cuts as premature, expressing concerns about robust wage growth. However, economists argue that the time may be approaching for the Bank of England to reconsider its stance on borrowing costs, especially as recent data on headline inflation, wages, and economic growth have all fallen below the central bank’s expectations. This shift aligns with actions already taken by the U.S. Federal Reserve and the European Central Bank.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 25.21 points or -0.34% to 7,388.04
• FTSE 100 decreased 1.98 points or -0.03% to 7,485.73
• DAX 30 decreased 56.27 points or -0.34% to 16.627.09

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00313 or -0.29% to 1.08497
• GBPUSD decreased 0.00206 or -0.16% to 1.26854
• USDCHF increased 0.00165 or 0.19% to 0.87065

The above data was collected around 16:08 EST.

US/AMERICAS:

The University of Michigan’s Survey of Consumers has revealed that consumer sentiment in January reached 78.8, its highest level since July 2021, marking the largest two-month increase since 1991. This surge is attributed to a drop in gas prices and stock market gains, leading to increased confidence in the economy and a more positive outlook on inflation. Additionally, the survey’s index of current conditions rose to 83.3, reflecting a 21.6% increase from a year ago. Notably, the inflation outlook for the next year decreased to 2.9%, down from 3.1% in December, the lowest reading since December 2020.

Exxon Mobil has filed a lawsuit in a Texas court to prevent activist investors from bringing a climate proposal up for a vote during the company’s shareholder meeting in May. This is the first time Exxon has sought to block a shareholder proposal through a court complaint. The company argues that the investors’ repeated proposals do not serve the best interests of investors or promote long-term shareholder value. The lawsuit is aimed at excluding the activist shareholders’ proposal from its proxy statement.

US Market Closings:

• Dow declined 93.36 points or -0.25% to 37,905.45
• S&P 500 advanced 14.17 points or 0.29% to 4,864.6
• Nasdaq advanced 65.66 points or 0.43% to 15,425.94
• Russell 2000 declined 7.11 points or -0.36% to 1,976.27

Canada Market Closings:

• TSX Composite advanced 110.29 points or 0.53% to 21,034.59
• TSX 60 advanced 5.48 points or 0.43% to 1,267.78

Brazil Market Closing:

• Bovespa advanced 1,628.12 points or 1.29% to 128,229.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.223 USD/BBL or -0.30% to 74.537
• Brent decreased 0.237 USD/BBL or -0.30% to 79.823
• Natural gas increased 0.0617 USD/MMBtu or 2.55% to 2.4807
• Gasoline decreased 0.0303 USD/GAL or -1.35% to 2.2075
• Heating oil decreased 0.0027 USD/GAL or -0.10% to 2.6908

The above data was collected around 16:10 EST.

• Top commodity gainers: Aluminum (3.52%), Lean Hogs (3.07%), Lumber (3.37%) and Zinc (2.91%)
• Top commodity losers: Cheese (-0.94%), Oat (-2.18%), Soda Ash (-2.05%) and Gasoline (-1.35%)

The above data was collected around 16:14 EST.

BONDS:

Japan 0.640% (-1.2bp), US 2’s 4.38% (+0.002%), US 10’s 4.1378% (+4.38bps); US 30’s 4.37% (+0.057%), Bunds 2.342% (+8.4bp), France 2.840% (+5.2bp), Italy 3.921% (+7.5bp), Turkey 24.87% (-19bp), Greece 3.388% (+5.6bp), Portugal 3.074% (+6.7bp); Spain 3.263% (+5.7bp) and UK Gilts 3.989% (+8.3bp)

The above data was collected around 16:17 EST.