Market Talk – January 11, 2023

Asia:

A World Bank report predicted that India’s economy would grow 6.9% in FY23, which is much lower than the 8.7% growth achieved by the country in the previous fiscal year. “Growth in India is expected to slow from 8.7 percent in fiscal year 2021/2022 to 6.9 percent in fiscal year 2022/23, the latter revised 0.6 percentage points lower since June,” the World Bank said in its latest Global Economic Prospects report. High inflation, rising fiscal and current account (CAD) deficits, sluggish exports and low income growth are some of the major challenges that India has to tackle in the next fiscal year. The World Bank noted that India’s goods trade deficit has doubled since 2019, while the Canadian dollar hit a nine-year high of 4.4 percent of GDP.

Major Asian stock markets had a mixed day today:

  • NIKKEI 225 rose 270.44 points, or 1.03%, to 26,446.00
  • The Shanghai index fell 7.67 points, or -0.24%, to 3,161.84 points.
  • The Hang Seng Index rose 104.59 points, or 0.49%, to 21,436.05 points.
  • The ASX 200 rose 64.30 points, or 0.90%, to 7,195.30
  • The Kospi index rose 8.22 points, or 0.35 percent, to 2,359.53.
  • SENSEX shares fell 9.98 points, or -0.02%, to 60,105.50
  • Nifty50 fell 18.45 points, or -0.10%, to 17,895.70

The major Asian currency markets had a mixed day today:

  • AUDUSD rose 0.00149, or 0.22%, to 0.69019
  • NZDUSD fell 0.00184, or -0.29%, to 0.63536
  • USDJPY rose 0.248, or 0.19%, to 132.498
  • USDCNY fell 0.01132, or -0.17%, to 6.77268

Valuable minerals:

  • Gold fell by $4.16/ton ounce. or -0.22% to 1,873.11
  • The price of silver decreased by $0.231/ton. ounces or -0.98% to 23.377

Some economic news from last night:

Australia:

CPI (YoY) increased (Q4) from 6.9% to 7.3%

Retail Sales (MoM) increased (November) from 0.4% to 1.4%

Some economic news from today:

Japan:

Coincident Index (MoM) (November) increased from -1.2% to -0.5%

Leading Index (MoM) decreased (November) from 0.4% to -1.0%

The leading index decreased from 98.6 to 97.6

Europe/EMEA:

The Bank of England has warned that banks should prepare for further regulatory scrutiny of their credit cards and buy-to-let portfolios well in advance of a credit stress. Rising interest rates, inflation and geopolitical uncertainty will challenge corporate credit portfolios, the Prudential Regulatory Authority, which is part of the Bank of England, said in a letter to bank chiefs on Tuesday. The PRA will focus on how companies manage risks related to unsecured personal loans, buy-to-let mortgages, leveraged lending, and commercial real estate. Regulators also said companies still needed to improve their governance after the collapse of Archegos Capital Management in 2021. The breakup of Bill Hwang’s family office caused more than $10 billion in losses across companies, including Credit Suisse Group AG and Nomura Holdings Inc. Morgan Stanley.

Major European stock markets had a green day:

  • The CAC 40 rose 55.05 points, or 0.80%, to 6,924.19.
  • The FTSE 100 rose 30.49 points, or 0.40%, to 7,724.98 points.
  • The DAX 30 rose 173.31 points, or 1.17%, to 14,947.91.

The major European currency markets had a mixed day today:

  • EURUSD rose 0.00055, or 0.05%, to 1.07395
  • GBPUSD fell 0.00409, or -0.34%, to 1.21141
  • USDCHF rose 0.00789, or 0.86%, to 0.93019

Some economic news from Europe today:

Spain:

Spanish Industrial Production (YoY) Decreased (November) -2.1% to -1.1%

Italy:

Italian Retail Sales (YoY) increased (November) from 1.2% to 4.4%

Italian Retail Sales (MoM) increased (November) from -0.3% to 0.8%

United States / America:

All eyes were on the new inflation data released on Wednesday. Annual inflation slowed for the sixth month in a row in December to 6.5%, marking the lowest level since October 2021. This represents a 0.6% drop from November and can mostly be attributed to lower energy costs after gas prices fell 12% from November to December. Core inflation is expected to decline by 5.7% year-on-year. Investors hope that US inflation will have peaked at 9.1% in June 2022, but prices are still very volatile.

The World Bank released a dismal global forecast after cutting growth to 1.7% from its previous estimate of 3%. The weak US economy was originally projected to grow by 2.4%, but that number has been significantly reduced to 0.5%. “Global growth has slowed to such an extent that the global economy is perilously close to collapsing into recession,” said the World Bank.

US market close:

  • The Dow Jones advanced 268.91 points, or 0.8%, to 33,973.01.
  • The S&P 500 advanced 50.36 points, or 1.28%, to 3,969.61
  • The Nasdaq advanced 189.04 points, or 1.76%, to 10,931.67.
  • Russell 2000 advanced 21.4 points, or 1.17%, to 1,844.05.

Canada market closing:

  • The TSX Composite advanced 126.19 points, or 0.63%, to 20,025.05.
  • The TSX 60 advanced 6.79 points, or 0.57%, to 1,204.98.

Brazil Market Close:

  • Bovespa advances 1,700.37 points, or 1.53%, to 112,517.08

energy:

The oil markets had a mixed day today:

  • Crude Oil rose $2,341/BBL, or 3.12%, to 77,461
  • Brent rose $2,527/BBL, or 3.15%, to 82,627
  • Natural gas fell $0.091/mmbtu or -2.50%, to 3.5480
  • Gasoline rose $0.0967/gallon, or 4.15%, to 2.4244
  • Heating oil increased $0.028/gallon, or 0.89%, to 3.1637

The above data was collected at approximately 12:10 a.m. EST on Wednesday

  • The biggest gainers for commodities: Brent (3.15%), Gasoline (4.15%), Crude Oil (3.12%) and Copper (2.09%)
  • The biggest losers in commodities: natural gas (-2.50%), coal (-3.31%), palm oil (-1.83%) and coffee (-5.27%).

The above data was collected at approximately 12:15 a.m. EST on Wednesday.

Bonds:

Japan 0.500% (-0.4 bps), US 2 up 4.25% (-0.007%), US 10 up 3.5742% (-4.48 bps); US 30 3.70% (-0.052%), Bonds 2.17% (-13.1 bps), France 2.656% (-14.6 bps), Italy 4.028% (-19.1 bps), Turkey 9.44% (+74 bps) , Greece 4.153% (-22.7 basis points), Portugal 3.106% (-15.4 basis points); Spain 3.19% (-14.4 basis points) and British Bonds 3.405% (-15.7 basis points).

Market Talk – January 10, 2023

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