Market Talk – February 1, 2024

ASIA:

In December, Hong Kong’s retail sales continued their upward trend for the 13th consecutive month, driven by improving tourism. Official data revealed a 7.8% year-on-year increase to HK$36.3 billion ($4.64 billion), following a 15.9% jump in November. The government anticipates further growth in visitor arrivals and attributes this to increased handling capacity recovery. Additionally, rising household income and government-led initiatives promoting mega events are expected to bolster retail businesses. In terms of volume, retail sales rose by 4.8% in December, compared to a 12.4% growth in November.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 275.25 points or -0.76% to 36,011.46
• Shanghai decreased 17.81 points or -0.64% to 2,770.74
• Hang Seng increased 81.14 points or 0.52% to 15,566.21
• ASX 200 decreased 92.50 points or -1.20% to 7,588.20
• Kospi increased 45.37 points or 1.82% to 2,542.46
• SENSEX decreased 106.81 points or -0.15% to 71,645.30
• Nifty50 decreased 28.25 points or -0.13% to 21,697.45

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00002 or 0.00 to 0.65652
• NZDUSD increased 0.00186 or 0.30% to 0.61326
• USDJPY decreased 0.405 or -0.28% to 146.475
• USDCNY increased 0.00317 or 0.04% to 7.18807

The above data was collected around 13:30 EST.

Precious Metals:

• Gold increased 18.76 USD/t oz. or 0.92% to 2,055.95
• Silver increased 0.275 USD/t. oz or 1.20% to 23.191

The above data was collected around 13:32 EST.

EUROPE/EMEA:

EU countries and lawmakers reached an agreement on Thursday to implement rules mandating Europe-based companies to prioritize the production of essential products, aiming to prevent supply chain disruptions similar to those caused by the COVID-19 pandemic and Russia’s Ukraine invasion. This decision followed the European Commission’s proposal of the Single Market Emergency Instrument, inspired by actions taken by the United States and Japan. The agreement, however, softened some aspects of the Commission’s proposal due to concerns from businesses regarding potential breaches of commercial contracts and disclosure of corporate secrets. The new rules also enhance EU countries’ roles in relation to the Commission. Additionally, the Commission can offer liability waivers to companies prioritizing its orders over other contractual obligations, and EU countries can jointly procure crisis-relevant goods or services. Furthermore, while the Commission can request data from companies regarding certain product stock levels, companies have the right to refuse, provided they offer a valid explanation.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 68.00 points or -0.89% to 7,588.75
• FTSE 100 decreased 8.41 points or -0.11% to 7,622.16
• DAX 30 decreased 44.72 points or -0.26% to 16.859.04

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.0055 or 0.51% to 1.08710
• GBPUSD increased 0.00532 or 0.42% to 1.27382
• USDCHF decreased 0.0029 or -0.34% to 0.85820

The above data was collected around 13:36 EST.  

 US/AMERICAS:

U.S. regional banking shares have seen a significant decline for the second consecutive day. The sell-off was sparked by New York Community Bancorp’s report of difficulties in its commercial real estate portfolio, leading to renewed concerns about the industry’s stability. The KBW Regional Banking Index fell by 4.8%, marking its largest single-day drop since the collapse of Signature Bank in March of the previous year. This two-day decline is on track to be the most substantial since June 2020. New York Community Bancorp’s shares lost an additional 13.4% of their value, with the stock experiencing a record single-day drop of 37.6% on Wednesday. The frenzied selling in banking shares has reignited fears about regional lenders, prompting calls for financial institutions to reassess their portfolios and explore alternative financing options to avoid a potential new crisis. The stock sell-off on Wednesday also indicated concerns about the recovery in the sector, while the broader impact of this decline on the banking industry is still being assessed.

US Market Closings:

• Dow advanced 369.54 points or 0.97% to 38,519.84
• S&P 500 advanced 60.54 points or 1.25% to 4,906.19
• Nasdaq advanced 197.63 points or 1.3% to 15,361.64
• Russell 2000 advanced 27.08 points or 1.39% to 1,974.42

Canada Market Closings:

• TSX Composite advanced 97.33 points or 0.46% to 21,119.21
• TSX 60 advanced 4.46 points or 0.35% to 1,272.62

Brazil Market Closing:

• Bovespa advanced 728.74 points or 0.57% to 128,481.02

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.109 USD/BBL or -0.14% to 75.741
• Brent decreased 0.278 USD/BBL or -0.34% to 80.272
• Natural gas decreased 0.038 USD/MMBtu or -1.81% to 2.0620
• Gasoline decreased 0.017 USD/GAL or -0.76% to 2.2142
• Heating oil decreased 0.0421 USD/GAL or -1.51% to 2.7431

The above data was collected around 13:38 EST.

• Top commodity gainers: Cocoa (3.26%), Cheese (2.39%), Feeder Cattle (1.84%) and Orange Juice (2.69%)
• Top commodity losers: Zinc (-2.04%), Sugar (-2.65%), Soybeans (-1.57%) and Natural Gas (-1.81%)

The above data was collected around 13:46 EST.

BONDS:

Japan 0.691% (-4.5bp), US 2’s 4.20% (-0.025%), US 10’s 3.8746% (-9.04bps); US 30’s 4.12% (-0.097%), Bunds 2.156% (-0.5bp), France 2.666% (+0.5bp), Italy 3.725% (-0.2bp), Turkey 24.77% (-33bp), Greece 3.267% (+2.8bp), Portugal 2.883% (+0.5bp); Spain 3.107% (+1.8bp) and UK Gilts 3.762% (-3.6bp)                                                        

The above data was collected around 13:49 EST.