The global economy is now entering a more mature phase of the economic cycle when growth momentum peaks and central banks begin to withdraw support. Against this backdrop, equity returns are expected to be more muted but still positive, supported by solid corporate earnings.
A rebound on Wall Street fizzled on Thursday as investors lost conviction that an early rally had legs, with the Nasdaq and S&P 500 both falling more than 1%.
The summary as at 21.01.22
- Asian share markets tumbled on Friday as lingering concerns over the Federal Reserve’s tightening and weaker-than-expected economic and earnings data weighed on sentiment ahead of a Fed policy meeting next week.
- Stock futures on both sides of the Atlantic are pointing to a lower opening building on the major US averages declined during yesterday’s session.
- Oil prices plunged on Friday, after rising to seven-year highs this week, as an increase in U.S. crude and fuel stockpiles prompted investors to take profits from the rally.
- Share of Peloton Interactive fell nearly 24% after media reports that the exercise bike maker is pausing production of its connected fitness products as demand wanes and the company looks to control costs. The company was one of the mainstays of the stay-at-home trade in 2020.
- After the bell, shares of Netflix dropped sharply after the company fell short of Wall Street forecasts for new subscribers at the end of last year and offered a weaker-than-expected forecast for early 2022.
- European Central Bank head Christine Lagarde said euro zone inflation will decrease gradually over the year, adding that the ECB did not need to act as boldly as the Fed because of a different economic situation.
- Treasury Secretary Janet Yellen defended the Biden administration’s economic achievements over the president’s first year in office and said that she hopes to see inflation closer to 2% by the end of 2022.
- Japan’s consumer prices rose by 0.8% yoy in December 2021, accelerating from a 0.6% gain a month earlier and pointing to the 4th straight month of increase. The latest figure was also the highest annual inflation rate since December 2019, boosted by a sharp pickup in food prices and a further rise in housing cost.
- Data on Thursday showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, likely as a winter wave of Covid-19 infections disrupted business activity.
- The GfK Consumer Confidence indicator in the UK dropped to its lowest level in 11 months at -19 in January 2022, as consumer mood was dampened by persistently high inflation, suggesting that rising living costs will slow the household spending recovery. This followed a reading of -15 in December 2021 and logged below analyst expectations of no change from the previous month.
- Bitcoin plummeted by more than 7% in the last 24 hours, and ether dived more than 8%, according to CoinDesk, wiping off nearly $150 billion from the crypto market.
The summary as at 20.01.22
Wall Street’s main indices ended lower by around 1% on Wednesday, with the tech-heavy Nasdaq confirming it was in a correction, after a diverse set of corporate earnings and as investors continued to worry about higher US Treasury yields and the Federal Reserve tightening monetary policy. European markets bucked the trend, closing mostly higher as strong earnings updates from the like of Burberry, Richemont and ASML pleased investors.
- Asian share markets broke a five-day slide to edge higher on Thursday, shrugging off drops in Europe and on Wall Street overnight as China underscored its diverging monetary and economic picture by cutting a set of key policy rates and lending benchmarks.
- European markets were seen heading for a higher open while their US counterparts were broadly flat.
- Oil steadied on Thursday, clawing back losses earlier in the session, as strong demand and short-term supply disruptions continue to support prices close to their highest levels since late 2014.
- President Joe Biden said Wednesday that he expects Russian President Vladimir Putin to order an invasion of Ukraine, and warned that “a disaster” awaits Russia if that happened. Biden’s remarks came after intelligence agencies agencies warned such an attack could happen within a month.
- The annual inflation rate in the UK increased to 5.4% in December from 5.1% in November and above market forecasts of 5.2%. This was the highest reading since March 1992. On a monthly basis, consumer prices rose 0.5%, following a 0.7% increase in November.
- Germany’s 10-year bond yield traded in positive territory for the first time since May 2019, as the country’s inflation was confirmed at an over 29-year high.
- China is said to be drafting nationwide rules to make it easier for property developers to access funds from sales still held in escrow accounts in its latest move to ease a severe cash crunch in the sector.
- Bank of America Corp reported a better-than-expected 30% jump in quarterly profit driven by loan growth and record-breaking M&A volumes. Elsewhere, Morgan Stanley also reported Q4 profits which beat market expectations, capitalizing on a boom in dealmaking and earning robust fees from managing assets for wealthy clients.
- Procter & Gamble’s fiscal Q2 results topped analyst estimates as the consumer goods giant recorded higher sales across all product segments and raised its outlook for 2022.
- United Airlines Holdings trimmed its capacity forecast and warned of higher costs, after posting a smaller-than-expected fourth-quarter loss, citing turbulence from the Omicron coronavirus variant.
- ASML reported a better-than-expected Q4 profit on the back of higher margins of 54.2%, as sales of €5 billion were slightly below analyst estimates of €5.1 billion. The company also said it would double its 2021 dividend to €5.50 and has received the first order from Intel for a new machine that is still under development.
- Alcoa reported Q4 earnings after Wednesday’s close that blew past estimates. The company reported Q4 adjusted EPS of $2.50, compared with $0.26 a year ago and forecasts Q1 adjusted EBITDA and adjusted net income levels consistent with the previous quarter.
The summary as at 19.01.22
Wall Street sold off sharply on Tuesday driven by surging bond yields and earnings misses. The tech-heavy Nasdaq led the declines after falling 2.6% to its lowest level since October. European equity markets closed roughly 1% lower.
- Major bourses in Asia mainly fell on Wednesday with the Nikkei sinking over 2% to a near 3-month low, amid surging cases of the Omicron variant. The Hang Seng was almost flat, as the US was reviewing Alibaba’s cloud business to see whether it poses a risk to national security.
- Stock futures on both sides of the Atlantic and pointed to a lower open.
- Oil prices extended gains this morning, rising for a 4th straight session and scaling 7-year highs after a key pipeline running from Iraq to Turkey was hit by an explosion, taking out crucial supply from an already tight market.
- Microsoft announced on Tuesday that it plans to buy Activision Blizzard for $68.7 billion in an all-cash deal which would mark the biggest deal in gaming history. Microsoft’s offer of $95 per share represents a premium of 45% to Activation’s Friday close.
- Goldman Sachs Group missed quarterly profit expectations on Tuesday as weak trading activity and rising expenses blighted the gains from a record-breaking M&A boom, sending the shares of Wall Street’s premier investment bank down 7%.
- Volkswagen and Bosch have agreed to set up a joint venture by the end of this year to deliver battery production systems and assist battery cell manufacturers in scaling up and maintaining production sites in Europe.
- Ford Motor Co said on Tuesday its fourth-quarter results would include an $8.2 billion gain on its investment in Rivian Automotive Inc, following the electric-vehicle maker’s blockbuster market debut in November.
- The ZEW Indicator of Economic Sentiment for Germany jumped 22.6 points from a month earlier to 51.7 in January, well above market expectations of 32.0. Investors believe that economic growth will pick up in the coming six months, particularly in the consumer-related and export-oriented sectors, as the incidence of COVID-19 cases will fall significantly by early summer.
- The New York Empire State Manufacturing Index plunged to -0.7 in January of 2022 from 31.9 in December, well below market forecasts of 25. The reading pointed to the first contraction in NY manufacturing activity since the second quarter of 2020, as demand for goods declined amid the spread of the omicron coronavirus variant. It also ends 18 straight months of expansion.
- The World Health Organization on Tuesday said the pandemic will not end as the omicron variant subsides in some countries, warning the high levels of infection around the world will likely lead to new variants as the virus mutates. New infections have increased by 20% globally over the past week with nearly 19 million total reported cases.
The summary as at 18.01.22
European shares recovered from Friday’s losses on Monday as investors focused on company earnings and US Federal Reserve policymakers entered a quiet period ahead of their meeting next week. Markets in the US were closed for a public holiday.
- Asian equity markets lost momentum Tuesday afternoon as major indices across the region erased earlier gains.
- US stock futures were little changed early morning as traders braced for the latest batch of corporate earnings reports. Meanwhile, European markets are set to fall slightly at the open.
- Oil prices rose more than $1 on Tuesday to a more than seven-year high on worries about possible supply disruptions after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.
- The Bank of Japan left its key short-term interest rate unchanged at –0.1% during its January meeting. In a quarterly outlook report, the central bank adjusted its view of inflation risks for the first time since 2014, raising its inflation forecasts for FY 2022 to 1.1% from earlier forecasts of 0.9% made in October.
- Chinese President Xi Jinping on Monday called for countries to move away from a “Cold War mentality,” saying history has repeatedly shown that confrontation only invites disastrous repercussions. His comments come at a time of simmering tensions between China and the US over Taiwan and as fears escalate over a possible Russian incursion into Ukraine.
- Passenger car registrations in the European Union plunged 22.8% yoy to 795,295 units in December, the sixth consecutive month of declines. Most of the region’s markets faced double-digit drops, including the four major ones: Italy (-27.5%), Germany (-26.9%), Spain (-18.7%) and France (-15.1%).
- China’s population grew by the slowest increase on record last year, reaching 1.41 billion people – an increase of 480,000 people compared to 2020, the National Bureau of Statistics said on Monday. for every other year since 1952, the data showed that the natural growth rate has been above 0.1%.
- The US has reported nearly 800,000 Covid cases per day on average over the past week, according to data compiled by Johns Hopkins University. That’s more than three times the level seen during last winter’s previous record. But there are signs of a possible turning point in the surge in places hit early by omicron.
The summary as at 17.01.22
Stocks wrapped up their second straight losing week on Friday albeit the major US indices ended the day in the green notwithstanding uninspiring bank earnings that marked the start of the earnings season. For the week, the S&P 500 fell nearly 1%, while the Dow and Nasdaq finished slightly in the red. In Europe the Stoxx 600 index was down 0.7% for the week.
- Asian equity markets were choppy on Monday as a slew of Chinese economic data confirmed the deadening effect of coronavirus restrictions of consumer spending, prompting Beijing to again ease monetary policy.
- European markets are seen heading for a higher open this morning while US markets will be closed today in observance of Martin Luther King, Jr. Day.
- Oil prices were trading near a multi-year high as the bull run in oil prices showed no signs of slowing down. The moves came even after China recently agreed with the US to release crude oil from its strategic stockpiles around the Lunar New Year, in a bid by major consumers to lower oil prices.
- The Chinese economy expanded 4.0% yoy in Q4 of 2021, easing from a 4.9% growth in Q3 and compared with market consensus of 3.6%. This was the slowest pace of expansion since Q2 2020. Considering full year of 2021, the economy grew 8.1%, exceeding the government’s target of “above 6%” and following a revised 2.2% growth in 2020.
- Other data released from China this morning showed retail sales rose only 1.7% yoy in December, missing forecasts for a 3.7% rise. Meanwhile, industrial output fared better, advancing 4.3% yoy in December, accelerating from a 3.8% rise in the previous month and beating market forecasts of a 3.6% gain.
- Credit Suisse Group Chairman Antonio Horta-Osorio is leaving the global bank following a board investigation into his travel and personal conduct. He joined Credit Suisse board less than a year ago.
- Unilever approached GlaxoSmithKline and Pfizer about an acquisition of their consumer-healthcare joint venture, a potential $68 billion deal that would reshape the consumer-products giant’s portfolio at a time when it is under pressure to accelerate growth.
- The London Stock Exchange has proposed the creation of a special market for private companies to trade their shares publicly on the exchange on certain days, part of a plan to attract fast growing technology firms to list in the UK in the wake of Brexit.
- JPMorgan reported profit and revenue figures in line with expectations on Friday, but shares still fell more than 6%. The company’s earnings were helped by a large credit reserve release, the Bank warned that the company would likely miss a key profit target in the next two years.
- Shares of Well Fargo added close to 3.7% after the bank’s revenue topped expectations. CEO Charles Scharf said in a release that loan demand picked up in the second half of the year.
The summary as at 14.01.22
Nervous global stock markets tumbled on Thursday after a drumbeat of hawkish remarks from Federal Reserve officials made clear that US interest rates could rise as soon as March, putting an end to ultra-easy monetary conditions. The three major US averages lost between 0.5% to 2.5%, with the Nasdaq being the relative underperformer. Meanwhile European equity markets ended mostly flat, pausing a two-day advance as losses in defensive stocks were matched by gains in automakers and technology stocks on hopes of improving semiconductor supply.
- Asian shares took a beating on Friday with the Nikkei touching a near four-week low after a fresh salvo of hawkish remarks from Federal Reserve officials. South Korean shares dropped well over 1% after its central bank raised its benchmark rate 25 basis points to 1.25%, taking it back to where it was before the pandemic as it seeks to strain consumer price rises.
- Stock futures are broadly flat this morning on both sides of the Atlantic ahead of major US bank earnings.
- Oil prices eased for a second session on Friday on growing concerns that Washington may soon act to cool prices, while movement controls in China to rein in a Covid-19 outbreak weighed on fuel demand.
- China’s trade surplus hit a fresh high of $94.5 billion in December, topping market forecasts of a surplus of $74.5 billion. Exports extended their double-digit growth for the 15th month running, increasing by 20.9% from a year earlier while imports rose at a softer 19.5%.
- Fed Governor Lael Brainard became the latest and most senior US central banker to signal that rates will rise in March to fight inflation, saying that the Fed “has projected several rate hikes over the course of the year”. Meanwhile in Europe, ECB Vice President Luis de Guindos warned that the current spike in inflation was not going to be as transitory as originally expected.
- US producer prices edged up 0.2% mom in December, well below an upwardly revised 1% rise in November and lower than market forecasts of 0.4%. Elsewhere, the number of Americans filing new claims for unemployment benefits rose by 23,000 from the previous period, the most in 8-weeks, to 230,000 in the week ending 8th January, compared with market expectations of 200,000, as a surge in coronavirus cases led by the Omicron variant disrupted activity from airlines to schools.
- SAP announced this morning a 28% jump from its cloud computing business in the fourth quarter as more customers shift their IT operations to its cloud business database. Profits rose to 5.38 billion from 5.28 billion a year earlier. The company lifted its 2022 outlook and announced a new €1 billion share repurchase programme.
- Delta Air Lines swung to a profit for the fourth quarter that topped analysts’ estimates, but the US airline expects to record a loss in the current three-month period with the omicron impacting its short-term outlook.
The summary as at 13.01.22
US stock indices rose on Wednesday after data showed that while US inflation was at its highest in decades, it largely met economists’ expectations, cooling some fear that the Federal Reserve would have to pull back support even more forcibly than already expected. The S&P 500 and the Nasdaq outperformed the Dow as growth stocks outperformed value. In Europe, markets extended gains for a second session as investors welcomed upbeat earnings from a number of continental companies.
- Major bourses in Asia were mainly lower on Thursday dragged down by data showing bank lending in China fell more than expected in December, causing property and consumption sectors to sink. Japan led the losses, as daily Covid-19 cases on Wednesday topped 13,000 for the first time in 4 months. The ASX rose for the second straight session, however, amid gains in mining stocks as commodity prices rallied.
- US stock futures are seen flat this morning while European markets were set to open in the red after a number of consecutive sessions of increases.
- Oil prices slipped in early morning trading, trimming big gains from the previous two sessions, amid data showing fuel demand in the US has taken a hit from omicron, with gasoline stockpiles increasing by 8 million barrels last week.
- Data from the US Labour Department showed the consumer price index increased 0.5% last month after rising 0.8% in November, while in the 12 months through December, the CPI surged 7.0% to its highest year-on-year in nearly four decades. Commenting on the report, President Biden said that prices have peaked. Later today we will see the release of the producer price inflation which is also running hot.
- Spain’s prime minister, Pedro Sanchez has called on the EU to debate the possibility of treating the Covid-19 virus as an endemic illness. Sanchez’s comments eco those made in the UK by politicians last year with Prime Minister Boris Johnson telling the British public that they would have to “learn to live with the virus.”
- Tesco raised its profit outlook for the second time in four months this morning as it reported a rise in Christmas sales despite a tough comparative with 2020.
- Volkswagen Group posted its lowest sales figures in 10 years in 2021 at 8.9 million deliveries and said it expects supply chain conditions to remain volatile in the first half of this year. By contrast, BMW saw record deliveries of 2.21 million vehicles, a success attributed in part to its ability to adapt to supply chain shortages.
- South Korea will begin treating coronavirus patients with Pfizer’s antiviral pills on Friday, as concern mounts over the spread of the Omicron variant.
The summary as at 12.01.22
US stocks indices gained ground on Tuesday with Nasdaq leading the advance as investors were relieved that Federal Reserve Chair Jerome Powell’s testimony to Congress did not include any major surprises. The technology-laden Nasdaq closed up 1.4% making its biggest daily gain so far this year while the S&P snapped a five-day slump.
- Asian markets jumped on Wednesday, with the Hang Seng leading the gains and followed closely by the Nikkei 225. Markets were buoyed by a moderation in China’s consumer and factory price inflation which gives room for the government to loosen monetary policy further.
- European stocks are expected to open higher this morning while US stock futures are pointing to a more muted open on Wall Street.
- Oil prices climbed on Wednesday, extending big gains in the previous session, as investors bought the dip in risk assets and industry estimates showed a draw in US stockpiles.
- The World Bank expects the global economy to grow by 4.1% in 2022 and 3.2% in 2023, decelerating markedly from a 5.5% expansion in 2021, as pent-up demand dissipates and fiscal and monetary support is unwound across the world. The forecasts for 2021 and 2022 were 0.2% point lower than in June’s projections. US GDP is seen rising by 3.7% in 2022 (vs 4.2% previously), the Eurozone should advance by 4.2% (vs 4.4%), and China will probably grow by 5.1% (vs 5.4%).
- China’s annual consumer price inflation fell to 1.5% in December 2021 from November’s 15-month high of 2.3%, less than market forecasts of 1.8%. For the whole year, the CPI rose 0.9% yoy, way below the central bank’s target of around 3%. Meanwhile, producer price inflation eased to 10.3% yoy in December from 12.9% in November and below market forecast of 11.1%.
- Federal Reserve Chair Jerome Powell, in a congressional hearing warned that inflation is a severe threat but stressed that the US economy is healthy enough to no longer need or want pandemic level stimulus.
- Philips reported today that it expects fourth-quarter core profit to drop around 40% to about €650 million, hit by a global shortage of electronic components and the fallout of a massive recall of ventilators.
- The market attention is today focused on the US December inflation data, with analysts, on average, expecting the report to show consumer prices up 7% yoy, a 40-year high.
The summary as at 11.01.22
Wall Street’s three major indexes staged a late-session comeback on Monday as the Nasdaq managed to eke out a tiny gain and investors swooped in to hunt for bargains, while the S&P 500 and the Dow Jones Industrial Average finished well above their session lows. In Europe, markets ended lower extending their first weekly drop in three weeks.
- Asian markets were mixed across the board with the Kospi and Hang Seng reversing earlier losses to trade marginally higher while the Nikkei, ASX and mainland Chinese shares were broadly lower.
- Federal Reserve Chair Jerome Powell will appear before the Senate Banking Committee today for consideration to a second four-year term as head of the Fed, followed by a hearing with vice chair nominee Lael Brainard on Thursday.
- US stock futures were flat early morning while European markets are set for a higher open.
- Oil prices climbed on Tuesday, with investors regaining some risk appetite as they await clues from the U.S. Federal Reserve chairman on potential interest rate rises and as some oil producers continued to struggle to beef up output. Libyan production rose to 900,000 barrels a day after maintenance in a major pipeline was completed, while some output was restored in Kazakhstan following unrest that interrupted supplies last week.
- European Parliament President David Sassoli died on Tuesday in hospital in Italy where he was admitted on Dec. 26 due to a serious complication related to his immune system.
- The Euro Area seasonally-adjusted unemployment rate edged down to 7.2 percent in November 2021, the lowest level since March 2020 and in line with market expectations. The number of unemployed decreased by 222 thousand to 11.829 million, as demand for labor strengthened amid the ongoing economic recovery.
- Moderna said on Monday it expected to record sales of about $18.5 billion in 2022 from contracts for its COVID-19 vaccine, and about $3.5 billion from potential additional purchases including booster candidates updated for variants.
- Take-Two Interactive said on Monday it would buy Zynga for $11.04 billion in a cash-and-stock deal that will add popular mobile titles such as “FarmVille” under its umbrella as demand surges for on-the-go gaming.
The summary as at 10.01.22
Stocks ended a rough week, with money flowing out of growth stocks and into value stocks as Treasury yields surged across the board. The Nasdaq 100 Index fell for a fourth straight session Friday, concluding its worst week since February, as investors reconsidered high-flying tech stocks as rates rise. For the week, the Nasdaq plunged 4.5% and the S&P 500 sank 1.8%, while the Dow Jones was off only 0.3%. But the S&P closed just above its 50-day moving average, a key technical reading that has attracted dip buying in the past. Major indices in Europe were down for the week after reaching record highs in the early days of the year.
- Major bourses in Asia were mixed on Monday, as traders awaited US inflation data and appearances from several Fed officials later in the week. Shares in South Korea sank 1%, amid tightened distancing rules and expectations that the Bank of Korea may raise it base rate Friday. The Hang Seng and the Shanghai Composite rose, however, as China’s forex reserves in December hit a 6-year high. Markets in Japan were closed for a holiday.
- US stock futures were mostly positive this morning while European markets were seen heading for a green open across the board.
- Oil prices edged up on Monday as supply disruptions in Kazakhstan and Libya offset worries stemming from the rapid global rise in Omicron infections. Oil prices gained 5% last week after protests in Kazakhstan disrupted train lines and hit production at the country’s top oilfield Tengiz, while a pipeline maintenance in Libya pushed production down to 729,000 barrels per day from a hig of 1.3 million bpd last year.
- Shimao Group Holdings has put on sale all of its real estate projects, including both residential and commercial properties. The cash-strapped Chinese property developer accelerates asset disposals after it defaulted on a trust loan last week.
- Russia said on Sunday it would not make concessions under U.S. pressure and warned that this week’s talks on the Ukraine crisis might end early, while Washington said no breakthroughs were expected and progress depended on de-escalation from Moscow.
- The US economy added a meagre 199K jobs in the last month of 2021, well below market forecasts of 400K, but the jobless rate fell to 3.9% and hourly wages surged 4.7% form a year ago.
- Brazilian oil major Petrobras announced that it expects to offload its stake in petrochemical company Braskem by February. Petrobras currently owns 36.1% of Braskem and 47% of the voting capital.
- A researcher in Cyprus has discovered a strain of the coronavirus that combines the delta and omicron variant. He called the strain “deltacron,” because of its omicron-like genetic signatures within the delta genomes.
- Citigroup will be the first major Wall Street institution to enforce a vaccine mandate by terminating noncompliant workers by the end of this month. The bank reminded employees in a memo sent Friday about its policy, first disclosed in October, that they must be fully vaccinated as a condition of employment.
The summary as at 07.01.22
US stocks extended losses from the previous session on Thursday, with all three major indices closing marginally lower. Big tech stocks continued to decline as investors rotated out of high valuation names into rate-sensitive stocks after Fed minutes on Wednesday showed the central bank is ready to remove its economic support and hike rates sooner than expected. European stocks followed the negative narrative, falling from record levels.
- Major bourses in Asia rose on Friday following two days of losses. The ASX led the gains, rebounding sharply after a tech-led selloff in the prior session. Stocks in China tried to recover, on hopes that Beijing would adopt a proactive policy to stabilise economic growth. The Nikkei fell, however, as Japan’s household spending fell for the 4th month running.
- Stock futures are pointing to a positive open on both side of the Atlantic as investors await a key jobs report in the US at the end of a volatile first week of the year.
- Oil prices are were headed for their third weekly advance, as the market tightened due to a civil unrest in Kazakhstan and supply outages in Libya. Kazakhstan’s biggest oil producer has altered output at the giant Tengiz field following widespread protests in a country that is currently producing 1.6 million barrels per day. Libyan oil output is also down by over 500,000 barrels per day due to pipeline maintenance and oilfield shutdowns.
- In the US, the ISM Services PMI fell to 62 in December from a record high of 69.1 in November, well below market forecasts of 66.9. but still pointing to the 19th consecutive month of growth in the sector. The demand for services remains strong and sustained but companies continue to struggle with inflation, supply chain disruptions, capacity constraints, logistical challenges and shortages of labour and materials.
- Samsung Electronics Co Ltd said on Friday its fourth-quarter operating profit likely jumped 52% on-year to its highest for the quarter in four years, helped by solid demand for server memory chips and higher margins in chip contract manufacturing.
- Moderna CEO Stephane Bancel on Thursday said the efficacy of boosters against Covid-19 will likely decline over time, and people may need a fourth shot in the fall to increase their protection.
- All eyes today will be on the US nonfarm payrolls report for December. Economists are expecting the economy to have added 422,000 jobs after rising by 210,000 in November, while the unemployment rate is forecast to come in a 4.1%.
The summary as at 06.01.22
US stocks ended sharply lower on Wednesday after the FOMC minutes showed the Fed will likely raise rates sooner than earlier anticipated and could reduce its balance sheet shortly after it raises rates. The Dow Jones sank 1.1%, after closing at a record level the day before; the S&P 500 lost 1.9%; and the Nasdaq finished 3.3% lower. Tech shares resumed the slide, as soaring Treasury yields raised concerns over tech valuation. Meanwhile, European equity markets closed at a fresh record level on Wednesday, led by gains in automakers as investors pile into cheaper sectors amid the prospects of higher interest rates.
- Shares in Asia declined in Thursday trade with the Nikkei 225 and Australia’s ASX 200 leading the fall.
- European markets are set to drop sharply at the open while in the US, stock futures are muted after Wednesday’s sell-off.
- Oil prices lost ground this morning, easing from their highest levels in more than a month as OPEC+ producers struck to a plan to boost production and US fuel stockpiles surged amid declining demand.
- Minutes from the last FOMC meeting of 2021 showed that policymakers noted that, given the outlook for the economy, labour market and inflation it may become warranted to increase the federal funds rate sooner or at a faster pace than previously anticipated. Moreover, some Fed policymakers also noted that it could be appropriate to start reducing the size of the balance sheet soon after the central bank begins raising interest rates.
- The Caixin China General Services PMI increased to 53.1 in December from 52.1 in the prior month, pointing to the 4th straight month of expansion. New order growth quickened, employment went up the most since May and foreign demand was stable. Meanwhile, the gauges for both input cost and selling prices fell, indicating lower inflationary pressure.
- Amazon has agreed to deliver software solutions for Stellantis’ new digital cabin platform and add the carmaker’s new electric vans to its delivery fleet in a series of multi-year agreements between the companies.
- French President Emmanuel Macron has sparked new criticism from his political opponents after saying he will make life difficult for those citizens who refuse a Covid-19 vaccine.
The summary as at 05.01.22
US stocks traded mixed on Tuesday. The Dow Jones extended the record rally, boosted by financial stocks gains amid expectations of higher yields, while investors kept betting on stocks that would benefit from a robust economic recovery. Meanwhile, the S&P swung between gains and losses, to finish little changed around a record high. On the other hand, the tech-heavy Nasdaq Composite dropped 1.2% as tech losses dragged the index amid a spike in bond yields. Meanwhile European stocks extended gains, with the pan-European Stoxx 600 closing at a new record.
- Major bourses in Asia traded in the red on Wednesday, with tech stocks coming under pressure due to rising US bond yields. The Kospi led the losses, sinking almost 1.5%, as institutional sell-off continued. Stocks in China and Hong Kong also fell, on uncertainties around the outlook for further policy easing. The Nikkei 225 edged up, however, amid efforts by the government to speed up Covid-19 vaccine booster shots.
- Stock futures on both sides of the Atlantic were pointing to a lower open later today.
- Oil prices were stable on Wednesday, holding onto gains after OPEC+ agreed to maintain a steady pace in raising supply. Major oil producers said they would increase output by 400,000 barrels per day in February as they see a mild and short-lived impact on fuel demand from the omicron variant.
- ISM Manufacturing PMI in the US fell to 58.7 in December from 61.1 in November, below market forecasts of 60. The reading pointed to the weakest growth in factory activity since January.
- Ford announced Tuesday it plans to nearly double production of the F-150 Lightning, its first all-electric pickup truck, to 150,000 trucks per year to meet high demand, by mid-2023. This is the second time Ford has announced plans to double annual production for the all-electric pickup truck.
- Credit Suisse upgraded General Electric to outperform from neutral, noting that among mega cap stocks with leverage to cyclical aerospace recovery in 2022, the firm sees more upside potential in the company.
- Allegiant Air is poised to order 50 Boeing 737 MAX jets worth $5 billion at list prices, rejecting offers by traditional supplier Airbus as the no-frills carrier seeks to capture a boom in post-pandemic U.S. tourism.
- North Korea fired a suspected ballistic missile off its east coast on Wednesday, just hours before South Korean President Moon Jae-in attended a groundbreaking ceremony for a rail line he hopes will eventually connect the divided Korean peninsula.
The summary as at 04.01.22
Wall Street’s New Year optimism overpowered concerns about the coronavirus and inflation on Monday, with US and European equity markets advancing in parallel. Both the S&P and Dow Jones closed at a record high after rising more than 0.6%, while the Nasdaq Composite jumped 1.2%. European shares also made new highs, on hopes of steady economic recovery.
- Asian stocks were largely on the front foot on Tuesday, as data showed accelerating Chinese factory activity growth in December.
- Europe and US markets look poised for an upbeat open as the positive momentum continues.
- Oil prices were steady on Tuesday ahead of an OPEC+ meeting, where it is set to agree to a planned output hike. The group is expected to stick to its existing policy of modest monthly output increases as it sees a mild and short-lived impact on fuel demand from the omicron variant.
- Chinese factory activity growth accelerated in December, according to a private survey released Tuesday. The Caixin/Markit manufacturing Purchasing Managers’ Index came in at 50.9, rising from November’s reading of 49.9.
- Manufacturing activity in the euro zone remained resilient at the end of 2021 as factories took advantage of an easing in supply chain bottlenecks and stocked up on raw materials at a record pace. The IHS Markit’s final manufacturing PMI dipped to 58.0 in December from November’s 58.4, matching an initial “flash” estimate and still comfortably above the 50-mark separating growth from contraction.
- China on Tuesday said it would put in force new rules that will strengthen oversight over how its platform companies make plans to list abroad or use algorithms, in moves set to further tighten Beijing’s grip over its sprawling technology sector.
- Embattled property developer China Evergrande Group said on Tuesday its contracted sales for 2021 had plunged 39% from the previous year to the equivalent of $69.5 billion. The shares were suspended on Monday pending the release of inside information.
- Apple shares briefly touched $3 trillion in market value, making it the first US company to do so. Shares crossed that level when they topped $182.856 on Monday afternoon, eventually reaching as high as $182.88. The stock closed the first trading day of the year up 2.5%, at $182.01.
- Daimler Chief Technology Officer Markus Schaefer said on Monday that the luxury carmaker expects chip supply to remain scarce throughout 2022, particularly in the first half of the year.
- Brazilian President Jair Bolsonaro was taken to a Sao Paulo hospital early Monday with a suspected intestinal obstruction after experiencing stomach pains. Since his stabbing during the 2018 presidential election, Bolsonaro has undergone stomach surgery several times.
- The US topped 1 million Covid infections in 24 hours yesterday, doubling the figure from just four days ago and setting a global record.
The summary as at 03.01.22
The major US averages traded lower for the last session of 2021 after some late selling action, but closed out the year with strong gains. The S&P 500 Index fell 0.3% and ended December about 4.5% higher, the third-best month of the year and best December since 2010. For the year, the S&P 500 Index was up about 27% to outpace the Dow and the Nasdaq by a wide margin.
- Stocks on Asia were mixed this morning as traded in 2022 kicked off, with some major markets in the region closed. The Hang Seng fell, with trading in debt-ridden developer China Evergrande being halted ahead of the release of “inside information”. The Kospi rose modestly after data showed South Korea’s exports rising the most in 11 years in 2021, boosted by sales of both chips and pharmaceuticals.
- Stock futures on both sides of the Atlantic rose on Monday as the market looked to start off 2022 on solid footing.
- Oil prices rose on Monday, although concerns over demand waning due to rapidly spreading Covid-19 pandemic limited gains. Last year, oil prices rose around 50%, spurred by the global economic recovery and producer restraint.
- The Centers for Disease Control and Prevention update recommendations for Covid-19 control, shortening isolation restrictions from 10 to five days for all Americans who test positive for the virus. The newly-issued guidance is in line with the growing evidence suggesting that people infected with Covid-19 are most infectious 1-2 days before and 2-3 days after the onset of symptoms.
- Israel will offer a fourth dose of Covid-19 vaccine to people over 60 and to medical staff as it faces a surge in Omicron variant infections.
- Tesla delivered more than 308,000 vehicles worldwide in the fourth quarter, far higher than analysts’ forecasts of 263,026 vehicles. It was the sixth consecutive quarter than the world’s most valuable automaker posted record deliveries.
- Thousands of people received a surprise gift on Christmas Day when European bank Santander accidentally deposited £130 million ($176 million) across 75,000 transactions. The mistake happened when payments from 2,000 business accounts in the UK were processed twice, meaning some employees saw their wages double, while suppliers also got more than they were expecting.
- This will see the publication of the FOMC meeting minutes and the US jobs report, which could provide further clues on the timing of the first rate hike by the Fed. In addition, investors await worldwide PMI surveys and an OPEC+ meeting that is expected to offer guidance into the coalition’s production plan from February.
The summary as at 30.12.21
Major global stock indices closed mixed on Wednesday as uncertainty over the surge in Omicron variant infections tempered optimism that harsh new curbs on business and travel may not be needed. After a weak session in Asian shares, European stock markets traded mixed. In the US, the Dow Jones and S&P 500 both closed at all-time highs. The Dow has risen six straight trading days, in the longest winning streak since a seven-session run from March 5-15 this year. However, the Nasdaq Composite edged lower.
- Major bourses in Asia mainly rose amid thin volumes on the last day of the year for several markets. The Shanghai Composite tried to rebound after Beijing pledges to focus on a consumption recovery and cut income tax rates. Shares in Australia were at a near 4-month high, on track to post a near 14% gain in 2021.
- Stock futures on both sides of the Atlantic were pointing to a flat open later in the day.
- Oil prices rose this morning to extend several consecutive days of gains, buoyed by data showing US fuel demand holding up well despite soaring omicron coronavirus infections.
- According to media reports, Samsung Group is in discussions to acquire US drugmaker Biogen in a deal that could be worth more than $42 billion. In August, Samsung announced that it will infuse $206 billion to grow its footprint across biopharmaceuticals, artificial intelligence, semiconductors and robotics industries in the post-pandemic era.
- Shares of Chinese artificial intelligence firm SenseTime Group rose more than 17% on its Hong Kong trading debut, after a rocky IPO plagued by concerns over US sanctions.
- US President Biden will today talk to Russian leader Putin over the phone amid rising concern over Russia’s troop buildup on the Ukraine border.
- Samsung Electronics and Micron Technology, two of the world’s largest memory chip makers, warned that a Covid-19 lockdown in the Chinese city of Xi’an could affect their chip manufacturing bases in the area.
- The World Health Organisation warned that new coronavirus variants could emerge during the pandemic that render current vaccines useless.
The summary as at 29.12.21
US stocks traded mixed on Tuesday amid low liquidity with the S&P 500 swinging between small gains and losses, and closing 0.1% below a record high hit on Monday. Meanwhile, Europe’s major stock indices closed higher, with Germany’s DAX at a five-week high, the pan-European Stoxx 600 near record highs and France’s CAC 40 at a fresh all-time high.
- Major bourses in Asia mainly dropped on Wednesday with shares in South Korea leading the losses on lower technology stocks. The Shanghai Composite and the Hang Seng also fell, on news that the Xian outbreak expanded. Equities in Australia climbed to a near 4-month high, however, as traders came back from an extended holiday weekend.
- US stock futures were pointing higher this morning while their European counterparts were set to open slightly lower.
- Oil priced edged higher on Wednesday after rallying overnight as industry data showed a decline in US inventories, boosting demand sentiment.
- US and Russian officials will hold security talks on Jan. 10 to discuss concerns about their respective military activity and confront rising tensions over Ukraine.
- Tesla Chief Executive Elon Musk has exercised all of his options expiring next year, signaling an end of his stock sales that triggered a fall in the share price of the world’s most valuable carmaker.
- China’s ride-hailing giant Didi Global plans to use a mechanism that will allow it to list shares in Hong Kong without raising capital or issuing new stock as it seeks to delist from New York.
The summary as at 28.12.21
Main US stock indices rose sharply on Monday after an extended Christmas break as traders remained optimistic that the new variant outbreak will not derail the economic growth. The Dow remained just 0.4% from its record high, the S&P extending gains to a new record high, and the Nasdaq Composite jumped to the highest since mid-November. In contrast, European markets were slightly higher in a holiday-thinned trading session with many markets still closed due to the Christmas festivities.
- Major bourses in Asia were higher this morning. The Nikkei jumped around 1% to near 1-month peak, as Japan’s factory output growth hit a record high in November. Stocks in China and Hong Kong edged up following the biggest single-day injection by the PBoC in 2 months aimed at meeting higher demand for cash towards the year-end.
- US stock futures were sideways on Tuesday, with the Dow Jones and S&P futures each shedding about 0.1%, while Nasdaq 100 futures were flat. Meanwhile European markets were pointing towards more convincing gains at the open.
- Oil futures held onto gains on Tuesday as investors shrugged off concerns that the omicron variant would dampen global demand. Prices advanced in four of the last five sessions on Monday to make a new one-month high.
- Fitch said on Monday that a third of the Chinese developers for which it provides a rating, would face a cash crunch in a scenario where homes sales fall by 30% next year.
- China’s finance ministry said on Monday that the nation will roll out fiscal policies proactively next year to stabilise economic growth, vowing that the impact of the drive would be felt earlier than usual.
- Global Covid-19 cases hit a daily record on Monday, with cases jumping nearly 50% from a month ago as deaths stay stable.
The summary as at 27.12.21
The major US averages recovered last week as concerns that the omicron variant would derail economic growth receded, with president Biden saying that the US will not go back to lockdown. Hopes that the massive democratic spending bill will be revived also lifted sentiment as president Biden insisted that he and senator Manchin will “get something done”. Meanwhile, European markets were muted on Christmas Eve amid thin trade.
- Major bourses in Asia were mixed in Monday trade, with multiple major markets in the region closed for holidays.
- US futures are pointing to a slightly higher open when trading resumes later in the day following a holiday on Friday.
- Oil prices were mixed this morning, with Brent edging up while US crude futures slipped after airlines called off thousands of flights in the United States over Christmas holidays amid surging Covid-19 infections.
- The People’s Bank of China pledged greater support for the real economy over the weekend and said it will make monetary policy more forward-looking and targeted. The central bank also vowed to promote healthy development of the country’s real estate market, in the latest sign that Chinese regulators are marginally easing curbs on the property sector to prevent a hard landing.
- China reported its highest daily rise in local Covid-19 cases in 21 months over the weekend as infections more than doubled in the northwestern city of Xian, the country’s latest Covid hot spot.
- US infections disease expert Dr. Anthony Fauci said on Sunday that cases of Covid-19 are likely going to keep surging. As of Thursday, before the holiday weekend disrupted Covid trackers, the US had reported more than 51 million total cases and over 800,000 deaths from the disease.
- Profits at China’s industrial firms grew at a much slower pace in November, the statistics bureau said on Monday, pressured by tumbling prices of some raw materials, a faltering property market and weaker consumer demand.
- Japan’s retail sales grew by 1.9% yoy in November, faster than a 0.9% rise in October and up for the 2nd month in a row. The latest reading was also above market forecasts of 1.7%, as consumers ramped up spending on goods and services following a fall in Covid-19 cases and an acceleration in vaccinations.
- US retail sales rose 8.5% during this year’s holiday shopping season from Nov. 1 to Dec 24, powered by soaring ecommerce sales, a report by Mastercard said on Sunday.
The summary as at 23.12.21
US stock indices closed broadly higher on Wednesday after investors cheered positive economic data and the White House said it was resuming talks on a massive social spending and climate change bill with a holdout senator. The positive sentiment helped European markets edged higher as well after trading mixed for most of the day.
- Major bourses in Asia rose on Thursday following an upbeat mood on Wall Street. Shares in Japan led the rise, up for the 3rd straight session, with technology stocks extending gains from the prior session. The Hang Seng and the Shanghai Composite edged up, on reports that China Evergrande will engage with its creditors after its recent missed debt repayments.
- European markets were heading towards a positive open while US futures were more pointing towards the flatline.
- Oil prices were stable this morning, hovering near 4-week highs after US crude stockpiles decline more than expected. US inventories fell by 4.72 million barrels, its fourth straight weekly draw and well above market estimates of a 2.75-million-barrel decline.
- The US economy grew by an annualized 2.3% in Q3 2021, slightly higher than 2.1% in the second estimate and following a 6.7% expansion in the previous three-month period. Looking ahead, analysts expect the US economy to expand at a faster pace in the current October-December quarter, putting it on track to record its best performance this year since 1984.
- Corporate profits in the United States rose 3.4% to a fresh record high of $2.52 trillion in the third quarter of 2021, slowing from a 10.5% jump in the previous period and compared with preliminary estimates of 4.3%.
- Telsa Inc Chief Executive Elon Musk said on Wednesday he was “almost done” with his stock sales after selling over $15 billion worth for more than one month. Shares rallied by over 7% on the news.
- Tencent Holdings plans to substantially reduce its stake in JD.com by issuing class-A ordinary shares to some of its shareholders as an interim dividend. The social and videogaming company’s stake will fall to 2.3% from the current 17.0% post distribution of JD.com shares.
The summary as at 22.12.21
Wall Street rose on Tuesday, recovering from a three-day losing streak as investors again turned to risky assets. The Dow Jones added more than 550 points, the S&P jumped around 1.8% and the tech-heavy Nasdaq Composite climbed 2.4%. Technology, retail, airlines, cruise lines and entertainment stocks led the gains. It was a similar story in Europe, with the main indices closing more than 1% higher, recovering from over two-week lows reached on Monday.
- Major bourses in Asia were higher on Wednesday. The Hang Seng led the gains, up for the 2nd straight session, with technology shares tracking big gains at Nasdaq. Meanwhile, equities in China edged up, on reports that Beijing would be able to keep economic growth stable next year due to proactive fiscal policies.
- In early European trading, pan-region Euro Stoxx 50 futures were pointing higher, while US stock futures were broadly flat.
- Oil prices rose on Wednesday after jumping more than 3% in the previous session as an industry report pointed to another decline in US crude stocks, with a looming energy crunch in Europe raising the prospect of greater demand for crude products in power generation.
- US President Joe Biden said on Tuesday he would be taking steps to fight the Omicron variant, by opening federal testing sites in New York City and buying 500 million at-home tests Americans can order online for free. The United States is considering cutting quarantine time for people with Covid-19. The CEO of Delta Air Lines asked the US Centers for Disease Control and Prevention to slash quarantine time to five days from 10.
- Israel announced on Tuesday that it will offer a fourth dose of the Covid-19 vaccination to people over 60 years old, amid concern about the spread of the omicron variant of the coronavirus.
- Data published on Tuesday showed Germany’s GfK Consumer Confidence gauge for January 2022 fell more than expected to a seven-month low of –6.8.
- Ireland’s government is set to hive off part of its 71% stake in Allied Irish Bank over the next six months, as it gradually removes public ownership of the country’s largest banks.
The summary as at 21.12.21
Global equity markets tumbled on Monday as investors dumped travel stocks, big tech, and other growth shares, amid rising virus cases and setback in President Biden’s social spending bill. The Dow ended down more than 430 points to the lowest since December 3rd. The S&P fell 1.1%, making the biggest 3-day drop since September while the Nasdaq declined 1.2%. In Europe, the Stoxx 600 erased 1.4%, with auto stocks leading losses, and Frankfurt’s DAX shedding 1.9%.
- Major bourses in Asia were higher on Tuesday, with traders trying to shrug off an overnight drop in US stocks. The Nikkei 225 jumped around 2%, boosted by reports that Japan raised its overall economic assessment for the first time in 17 months citing easing curbs. Stocks in China and Hong Kong also climbed, as Beijing urged large private and state-owned property firms to acquire projects from troubled developers.
- European markets appear set for a higher open with gains in excess of 1% with a similar picture painted by US futures.
- Oil prices edged higher on Tuesday, after dipping overnight as traders reassessed the demand outlook amid rising Covid cases globally. On the supply, compliance of OPEC+ members with oil production cuts rose to 117% in November from 116% a month earlier, indicating production levels remained well below agreed targets.
- The Turkish lira rose more than 10% on Tuesday, after gaining 19% on Monday recovering from a record low early on Monday after President Tayyip Erdogan announced measures that he said will bolster the currency. These include the introduction of a new program that will protect savings from fluctuations in the local currency by making up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed interest rates promised by banks.
- Moderna said on Monday that a booster shot of its vaccine appeared to be protective against the new variant in laboratory testing. Meanwhile the omicron variant is now the dominant Covid strain in the US, representing 73% of sequenced cases, according to data published Monday by the Centers for Disease Control and Prevention.
- BNP Paribas has reached an agreement with BMO Financial Group for the sale of 100% of its retail & commercial banking activities in the United States conducted through its subsidiary Bank of the West, for a total consideration of $16.3 billion in cash.
The summary as at 20.12.21
US stocks ended lower Friday, after a volatile session with a volume 30% higher than in the last month as investors assess a more hawkish shift in global monetary policy and the spread of Omicron. On the week, Nasdaq declined nearly 3% and the Dow and the S&P 500 slipped 1.7% and 1.9%, respectively.
- Asian shares were lower in Monday trade, with China slashing its benchmark lending rate for the first time in more than one-and-a-half years.
- Stock futures extended losses on Monday on both sides of the Atlantic as investors continued to grapple with rising Covid cases and tighter central bank policies.
- Oil prices fell more than 3% on Monday as traders reassessed the demand outlook amid rising Covid cases globally, with the highly transmissible omicron variant prompting fresh lockdowns in some countries. Meanwhile energy services firm Baker Hughes reported on Friday that US oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to Dec. 17, rising for a second week and reaching its highest level since April 2020.
- The WHO also said on Saturday that the number of cases with the new strain doubles in 1.5 to 3 days in areas with community transmission. Meanwhile, the spread of Omicron saw the Netherlands go into lockdown on Sunday and put pressure on others to follow, though the United States seemed set to remain open.
- US Democratic senator Joe Manchin said on Sunday he won’t support his party’s $2 trillion social and environment bill, dealing a blow to the Biden administration heading into an election year.
- Turkish President Tayyip Erdogan said he had lowered Turkey’s inflation to around 4% before and that he will achieve that again, as it topped 21% following a push for aggressive cuts in interest rates that he has engineered.
The summary as at 17.12.21
European shares rose on Thursday after Britain and Norway hiked interest rates and the ECB trimmed its bond buying program. Elsewhere, US stocks ended in the red as the technology and consumer discretionary sectors took a hit following the Federal Reserve’s decision to accelerate its reduction in asset purchases, while Omicron variant infections continued to rise across the globe.
- Major bourses in Asia mainly dropped on Friday, with the Nikkei leading the losses. Stocks in China and Hong Kong also retreated, on fears over new Covid-19 outbreaks. The ASX rose slightly, however, after the RBA reiterated it would keep its cash rates at a record low in 2022.
- Future markets are pointing to a negative open on both sides of the Atlantic with European markets expected to suffer a higher loss as they catch up with overnight activity in the US.
- Oil prices dipped on Friday, putting the market on track to end the week roughly unchanged, as surging cases of the Omicron variant raised fears new curbs may bit fuel demand, while a weaker dollar supported commodity markets broadly.
- The ECB announced it would reduce the pace of its asset purchases under its €1.85 trillion PEPP next quarter and wind down the scheme next March, citing the progress on economic recovery and toward its medium-term inflation target. The bank also said it would ramp up bond buys under its longer-running but more rigid APP, aiming to offset some of this lost stimulus. ECB officials maintained their narrative that inflation is “transitory”, even as latest data showed consumer prices rose in November by the most since July 1991.
- The Bank of England voted by a majority of 8-1 to increase Bank Rate by 15bps to 0.25% for the 1st time since the onset of the pandemic, as inflation pressures mounted in Britain, surprising markets that expected no changes due to the threat of Omicron. Looking ahead, bank staff expect inflation to remain around 5% through the majority of the winter period, and to peak at around 6% in April 2022, before falling back in the H2 of next year.
- The Covid-19 positivity rate in New York City has doubled in three days, with 18,276 cases reported in a single day. This is 40% higher than the previous day and the highest single-day total since 14th January.
- US initial jobless claims rose 18,000 to 206,000 during the week ended 11 December, versus consensus expectations for 200,000. The previous week’s record low of 184,000 was revised higher by 4,000.
- The December flash reading of manufacturing conditions from IHS Markit fell to 57.8, the lowest level in a year, from 58.3 in the previous month, missing the forecast for a reading of 58.5.
- Adobe anticipates higher results for fiscal 2022 compared with the previous year, but the outlook was below the Wall Street consensus even after reporting an increase in the fourth quarter as digital media and digital experience businesses posted double-digit growth.
- The Turkish Lira hit yet another all-time low after the country’s central bank slashed its policy rate in line with the economic program set out by President Tayyip Erdogan. Meanwhile, consumer inflation rose more than expected to 21.31% in November, well above the central bank’s mid-point target of 5%. The lira has lost near 50% of its value since the beginning of November.
The summary as at 16.12.21
US stocks cut their losses and moved higher on Wednesday as the market got past one of the big uncertainties heading into year-end. The Federal Reserve signaled a more aggressive unwinding of its monthly bond buying, as expected by the market, and forecast multiple rate hikes on the way next year. The technology sector led the market rebound. In Europe, the major stock markets closed mostly above the flatline as investors were investors geared up for the Fed’s last meeting of the year.
- Asian markets were mixed Thursday as investors digested the US Federal Reserve’s indications that its run of ultra-easy monetary policy is coming to a close. The Nikkei 225 was the region’s outperformer fueled by gains in autos, tech and retail while in Australia, the ASX 200 struggled for gains, pressured by losses in energy and materials.
- European markets are set to surge at the open as they catch up with the overnight rally in US markets. Meanwhile, US stock futures are also looking marginally higher.
- Oil prices rose on Thursday as US implied consumer petroleum demand surged to a record high in the world’s top oil consumer even as the omicron variant of coronavirus threatens to dent oil consumption globally.
- The US Federal Reserve continued its more hawkish stance in their December policy meeting, announcing it would end its pandemic-era bond purchases in March and paving the way for three interest rates hikes by the end of 2022. Officials have revised up the 2022 inflation forecast to 2.6% from 2.2% projected in September, while the unemployment rate is seen falling to 3.5%.
- US retail sales for November came in worse than expected, rising 0.3% month-over-month. Economists were looking for a 0.8% increase.
- White House chief medical advisor Dr Anthony Fauci said Wednesday that currently available booster shots work against the omicron variant of Covid-19 and do not need to be adjusted to fight the new, highly contagious strain of the virus at this time.
- Reddit on Wednesday announced that it has confidentially submitted a draft registration statement with the Securities and Exchange Commission to go public.
- Australia’s Qantas Airways said on Thursday it has chosen Airbus as the preferred supplier to replace its domestic fleet, switching from Boeing in a major win for the European plane maker. Deliveries would start in mid-2023 and continue over the next 10 years to replace an ageing fleet of 75 Boeing 737s and 20 717s.
- There’s more central bank activity on Thursday with both the European Central Bank and the Bank of England set to release their latest monetary policy decisions. UK inflation climbed to a 10-year high in November, data showed on Wednesday, and could influence the bank on whether to tighten monetary policy.
The summary as at 15.12.21
US equity markets extended losses for a second consecutive session on Tuesday, led by a rout in technology stocks amid expectations of reduced stimulus and higher interest rates. Elsewhere, Europe’s major indices closed mixed, with Germany’s DAX underperforming its peers, as gains in basic resources and banks were partially offset by losses in tech and travel stocks.
- Asian markets held still on Wednesday as major indices in the region were flirting around the flatline.
- European and US stock futures were pointing cautiously higher this morning as investors remain focused on the Federal Reserve interest rate announcement.
- Oil declined in early Asian trade after the International Energy Agency warned that the Omicron will dent demand, cutting its forecast for 2022. The IEA’s bearish outlook stood in contrast to OPEC’s more positive view in its monthly outlook earlier this week.
- Early this morning, the US Congress approved a measure to raise the debt ceiling by $2.5 trillion to $31.4 trillion, marking the final step in staving off a potential default and deferring the high-stakes fiscal fight until after the 2022 midterm election. The Senate voted 50-49 to approve the legislation and the House later passed it 221-209.
- China’s November Industrial Production rose 3.8% year-on-year compared to forecasts of 3.6%. Retail Sales and Fixed Asset Investments however, were softer at 3.9% and 5.2% vs. Forecasts of 4.6% and 5.4% indicating some signs of slowing down.
- US producer prices increased by a more than expected 0.8% in November as supply constraints persisted, leading to the biggest annual gain of 9.6% since the series was revamped 11 years ago and supporting views that inflation could remain uncomfortably high for some time.
- The International Monetary Fund urged the Bank of England to avoid an “inaction bias” when it comes to raising interest rates as it forecast British inflation would hit a 30-year high of around 5.5% next year.
- The World Health Organisation warned the new Covid-19 omicron variant is spreading faster than any previous strain, and it is probably present in most countries of the world.
The summary as at 14.12.21
The three major US indices fell in regular trading on Monday amid concerns around economic risks from the Omicron variant as well as central bank efforts to rein in inflation. The Nasdaq Composite led the declines as investors rotated out of technology stocks with high valuations into shares of Covid-19 vaccine manufacturers amid increasing demand for booster shots to fight the Omicron variant. Shares of airlines and cruise line operators also slumped amid fears that the new variant could slow travel. Meanwhile, European stocks erased early gains to trade near the flat line on Monday.
- Major bourses in Asia followed Wall Street lower on Tuesday, with the Hang Seng leading the losses and extending the falls from the prior session. The Shanghai Composite also fell noticeably, dragged down by the first Omicron case in China and an outbreak in a Chinese manufacturing hub. Markets were also lower in Japan, South Korea, and Australia.
- US and European stock futures inched higher this morning after a disappointing start to the week.
- Oil priced edged higher on Tuesday but price gains were capped due to investor worries about oil demand after renewed restrictions were imposed in Europe and Asia.
- OPEC raised its world oil demand forecast for the first quarter of 2022 and stuck to its timeline for a return to pre-pandemic levels of oil use, saying the Omicron coronavirus variant would have a mild and brief impact.
- The Asian Development Bank on Tuesday trimmed its growth forecasts for developing Asia for this year and next to reflect risks and uncertainty brought on by the Omicron variant.
- Chinese President Xi Jinping is set to meet virtually with Russian President Vladimir Putin on Wednesday. The meeting comes as rising tensions on the Russia-Ukraine boarder have caught international attention. The US and other Group of 7 leaders issued a statement on Sunday condemning “Russia’s military build-up and aggressive rhetoric towards Ukraine.”
- In a new study announced on Monday, researchers from the University of Oxford tested blood samples of people 28 days after their second dose of either the Oxford- AstraZeneca or Pfizer BioNTech vaccine. When Omicron was introduced to those samples, scientists reported “a substantial fall” in the neutralising antibodies that fight off Covid compared to the immune responses seen against earlier variants.
The summary as at 10.12.21
Wall Street closed lower on Thursday as investors banked some profits after three straight days of gains and turned their focus toward upcoming inflation data and how it might influence the Federal Reserve’s meeting next week. The Nasdaq was down more sharply than the S&P 500 while the Dow was virtually flat. Markets in Europe also closed lower, as investors weighed the impact of tougher Covid-19 restrictions in the UK on the region’s economic recovery, while fearing that other countries could follow suit.
- Major bourses in Asia traded lower on Friday, with the Kospi leading the losses after falling for the first time in nine days. Stocks in China and Hong Kong also fell after rating agency Fitch downgraded property developers China Evergrande and Kaisa Group, defining their status as restricted default.
- Stock futures are lower this morning in both the US and Europe as the recent rally cools.
- Oil prices continued to ease lower in Asia, extending Thursday’s decline, as worries that Covid-19 related restriction imposed in some parts of the world to combat Omicron may put some pressure on energy demand.
- The number of Americans filing new claims for unemployment benefits dropped by 43k from the previous period to 184k in the week ending December 4th, the lowest level since early September 1969 and below market expectations of 215k, as demand for labour remains strong amid the ongoing economic recovery and as many employers seek to retain workers.
- Oracle shares were trading more than 6% higher after-hours following the company’s reported Q2 results, with EPS coming in at $1.21, beating the consensus estimate of $1.11. Quarterly revenue grew 6% year-over-year to $10.4 billion, compared to the consensus estimate of $10.21 billion.
- Costco bet Wall Street estimates for quarterly results on Thursday, even as it warned of delays in toys and seasonal items over the holiday season due to a global supply chain crunch.
- Tesla CEO Elon Musk is “thinking of” leaving his jobs and becoming an influencer, the world’s richest man tweeted on Thursday. Musk is also the found and CEO of rocket company SpaceX, and leads brain-chip startup Neuralink and infrastructure firm the Boring Company.
- The US Labour Department will later day release the highly awaited November consumer price index. Markets expect a high inflation reading of +0.7%, which would translate to a year-over-year growth rate of 6.7%. If that is the case, it will mark the biggest move since June 1982.
The summary as at 09.12.21
Wall Street closed slightly higher on Wednesday with the three major indices managing their third straight day of gains after test data showed the Covid-19 vaccine from Pfizer and BioNTech offered some protections against the new Omicron variant. The S&P finished less than a point below where it closed before a steep sell-off. Elsewhere in Europe markets closed yesterday’s session in negative territory, with retail stocks leading losses.
- Asian markets traded mixed this morning, with the Nikkei 225 and the ASX 200 moving lower while the Kospi and Chinese markets trading higher.
- US stock futures were little changed while their European counterparts were seen heading for a positive open.
- Oil prices edged higher on Thursday, recouping two-thirds of the recent Omicron-related selloff as fears that the new variant could dent global growth and fuel demand waned. Moreover, an agreement to revive the 2015 Iran nuclear deal still seemed far off, while tensions between the West and Russia over Ukraine remained high, presenting geopolitical risks and keeping oil prices up.
- Pfizer and BioNTech announced that their three-shot course of the vaccine was able to neutralise the Omicron variant in a laboratory test and they could deliver an upgraded vaccine in March 2022 if needed. The two companies added that two doses of their vaccine may not be enough to protect against Omicron.
- China’s annual inflation rate accelerated to 2.3% in November from 1.5% in October and compared with market consensus of 2.5%. This was the highest figure since August 2020, due to seasonal rising demands, higher costs, and sporadic outbreaks. Meanwhile factory-gate prices are were seen cooling.
- The UK government announce a new coronavirus Plan B yesterday, restricting access to large venues to holders of a health pass, encouraging work from home and wearing of masks.
- Tesla is in talks with the National Highway Traffic Safety Administration over concerns regarding the electric care manufacturer’s recent software update that allows users to play video games on a built-in touch screen even when the vehicles are moving.
- Volkswagen Group may be looking at a spinoff of its Porsche subsidiary in a quest to raise funds for its extensive electric vehicle and software development programs. Estimates for what Porsche could be worth as a standalone company range between €45bn and €90bn.
- Nestle agreed to cut its stake in L’Oreal to about 20% (from 23%) by selling shares worth €8.9 billion back to the French cosmetics brand, moving to reduce the weight of the beauty giant on its books for the first time in 7 years.
- Chinese property developer Sunac cut its stake in NYSE-traded Ke Holdings worth $530mn, taking its total disposals of the company’s stock to $1.08bn since June 2021. Sunac said that proceeds from the stake sale would be used for working capital purposes. Sunac’s dollar bonds have seen a sharp rebound this week with some of them up over 10%.
The summary as at 07.12.21
US stocks fell sharply on Friday, amid mixed economic data along with a series of hawkish remarks by Federal US and European shares rallied on Monday after easing concerns about the Omicron coronavirus variant led investors to buy stocks that will likely perform well in a rising interest rate environment. Energy and banking were big movers in Europe while industrials and consumer staples were the S&P’s strongest sectors.
- Asian markets edged higher this morning on receding worries about the impact of the Omicron variant while Chinese markets gained after the central bank there eased monetary policy.
- Stock futures jumped early morning Tuesday after a rebound from a rollercoaster week as investors looked past the potential impact from the new omicron coronavarius variant.
- Oil prices ticked higher, consolidating a nearly 5% rebound the day before as concerns about the impact of the Omicron variant on global fuel demand eased.
- The People’s Bank of China said on Monday it would cut the amount of cash that banks must hold in reserve, its second such move this year, releasing the equivalent of $282 billion in long-term liquidity to bolster slowing economic growth. At the same time, the communist party central committee vowed to stabilise the economy in 2022.
- China’s exports growth lost steam in November, pressured by a strong yuan, weakening demand and higher costs, but import growth accelerated and came in well above expectations pointing to stronger domestic activity. Exports rose 22% on the year and imports jumped 31.7% in November compared to forecasts of 19.0% and 19.8%, respectively.
- The Reserve Bank of Australia kept the cash rate unchanged at a record low of 0.1% for the 13th month in a row during its last meeting of 2021 as expected, saying inflation had picked up but it remains low in underlying terms. Policymakers noted that inflation pressures are less than they are in many other countries, amid modest wages growth.
- Industrial production in Germany increased 2.8% mom in October of 2021, following a downwardly revised 0.5% fall in September and well above market forecasts of a 0.8% rise. Production of capital goods jumped 8.2% and motor vehicles, trailers and semi-trailers was up by 12.6%.
- The US announced a diplomatic boycott of the 2022 Winter Olympics in Beijing over human rights abuses. While US athletes will still participate, the administration will not send any official representation to the games.
The summary as at 06.12.21
US stocks fell sharply on Friday, amid mixed economic data along with a series of hawkish remarks by Federal Reserve officials, while fears over the new Omicron Covid-19 variant mounted. The technology-heavy Nasdaq Composite plunged as much as 1.9% to the lowest since October 18th while the S&P dropped 0.9% to trade near levels not seen since October 15th amid a sharp fall in big techs stocks. Meanwhile European stock markets erased early gains and closed near 2-month lows.
- Asian markets were mixed this morning with Chinese markets marginally higher while the Hang Seng and the Nikkei were down.
- US stock futures were mixed on Monday while their European counterparts were firmly in the green.
- Crude prices rose more than 2% on Monday after top exporter Saudi Arabia raised prices of its Asia and US-bound crude, and as indirect US-Iran talks on reviving a nuclear dal appeared to have stalled.
- The IMF urged the Fed on Friday to tighten monetary policy at a faster pace in light of rising inflation risks, citing the US strong economic position compared with other developed countries.
- US Non-Farm Payroll for November was softer than expected at 210k vs. Forecasts of 550k with the unemployment rate came in lower at 4.2% vs. forecasts of 4.5%. Average Hourly Earnings came in softer at 0.3% MoM and 4.8% YoY vs. forecasts of 0.4% and 5% respectively, possibly indicating some slack in the labour market.
- Natural gas decreased to a 15-week low pressured by mild weather forecasts and as concerns about this winter’s gas supplies disappeared. The first half of December is expected to see warmer-than-usual weather, meaning demand for heating is forecasted to be lower than long-run normal. Meanwhile, mild temperatures during October and November allowed firms to stockpile enough gas for the coming winter months, with inventories just 2% below normal levels, compared with a more worrying picture of a 6% gap back in October.
- Shares of China Evergrande Group tumbled 12% to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman.
- Alibaba announced that Toby Xu, its deputy chief financial officer, will succeed Maggie Wu as chief financial officer. That change will be effective April 1.
- The week ahead could see some more cautious risk-off trading with the consumer price index report arriving on Friday just five days before Federal Reserve policy makers meet to discuss inflation risks. Analysts expect the headline CPI number to reach 6.7%, which would be the highest rate since 1982.
The summary as at 03.12.21
A broad rally sent Wall Street to a sharply higher close on Thursday, recovering ground lost over recent sessions as market participants snapped up bargains while digesting the implications of a shifting pandemic. All three main indexes advanced, with investors favouring value over growth, and economically sensitive small caps and transports outperforming the broader market. By contrast, European markets ended lower yesterday, with tech stocks leading the decline as almost all sectors and major bourses slid well into the red.
- Shares in Asia were mostly higher in Friday trade, with the Hong Kong market being a notable exception. The latter was driven lower by Chinese tech stocks which plunged after Didi announced Friday that it will begin taking steps to delist from the New York Stock Exchange – less than six months after it made its debut stateside.
- US stock futures were little changed in early morning trading Friday while their European counterparts were poised for a strong rebound.
- Oil prices climbed on Friday, extending gains after OPEC+ kept the door open for policy changes, pledging to act swiftly if demand suffered from measures to contain the Omicron variant. Nonetheless, prices were still on course for a sixth week of declines.
- The Caixin China General Services PMI fell to a three-month low of 52.1 in November from 53.8 in October, with the resurgence of Covid-19 outbreaks having a bigger impact on demand than on supply.
- The US Senate passed a short-term government funding bill on Thursday night, sending it to President Joe Biden’s desk a day before a Friday deadline to prevent a shutdown. The legislation would keep the government running through 18 February.
- Regulators in the US have moved to block Nvidia’s $80 billion takeover of Arm, the British microchip designer on concerns that the proposed deal would give the US company control over computing technology and designs that competitors rely on to create their own chips.
- China’s aviation authority on Thursday issued an airworthiness directive on the Boeing 737 MAX that will help pave the way for the model’s return to service in China after more than 2-½ years, leading to a surge in the plane maker’s shares.
- The number of Americans filing new claims for unemployment benefits rose to 222,000 in the week ending 27 November, from a five-decade low of 194,000 in the previous period and below market expectations of a 240,000. Still, the number of new claims came in near their pre-pandemic 2019 weekly average of about 220,000, reflecting the continued recovery in the US market.
- The November US jobs report is set for release later today, with investors expecting solid jobs growth last month and economists predicting 581,000 jobs added in November.
The summary as at 02.12.21
Stocks on Wall Street reversed earlier session gains yesterday to close sharply lower, after the Centers for Disease Control and Prevention confirmed the first case of the Omicron variant in the US. The S&P closed 1.2% lower, after rallying more than 1.9%, while the Nasdaq Composite lost 1.8%. By contrast, European shares closed in the green, partially recovering from the multi-week lows hit in the previous session.
- Stocks in Asia struggled for direction in Thursday trade, as concerns over the economic impact of the of the Omicron Covid variant continue to weigh on investor sentiment.
- Equity futures were indicating a divergence between Europe and US market open, as the latter were seen reversing some of the sharp declines of yesterday while European markets were seen catching up with the downtrend observed in US markets late Wednesday.
- Oil prices rose on Thursday, reversing the previous day’s losses, on expectations OPEC+ may pause supply additions amid growing concern the spread of the Omicron variant could weigh on the global economy and fuel demand.
- In his second day of testimony in Congress, Federal Reserve Chair Jerome Powell said the US central bank needs to be ready to respond to the possibility that inflation may not recede in the second half of next year as most forecasters currently expect.
- The World Health Organisation (WHO) reported yesterday that hospitalisations in South Africa are on the rise but it is still not clear whether this is the due of a general increase in Covid cases or because the Omicron is more lethal than originally thought.
- Apple told its parts suppliers that demand for the iPhone 13 lineup has slowed. The company had earlier cut production of iPhone 13 by as many as 10 million units due to a global chip shortage, but now it has informed vendors that those orders may not materialise.
- Square Inc is renaming itself ‘Block’, effective Dec 10, as it focuses on technologies such as blockchain and expands beyond its original credit-card-reader business. Block will still trade under the ticker SQ on the New York Stock Exchange.
- The ISM Manufacturing PMI in the US edged up to 61.1 in November 2021, from 60.8 in the previous month and broadly in line with consensus of 61.0. The latest reading indicated expansion in the manufacturing sector for the 18th month in a row after a contraction in April 2020, even as factories continued to struggle with pandemic-related shortages of raw materials.
- Turkish President Recep Tayyip Erdogan has replaced the country’s finance minister after weeks of economic turmoil in which inflation soared as the lira plummeted to record lows. In his place, the President appointed his deputy, Nureddin Nebati.
The summary as at 01.12.21
Equities globally extended their decline yesterday following hawkish remarks from Federal Reserve Chair Jerome Powell and as concerns about the Omicron variant re-emerged. Stocks were pressured by remarks from Moderna’s CEO saying he expects existing vaccines to be less effective against the Omicron variant, along with Regeneron which likewise flagged the efficacy of its therapeutics on the new variant.
- Major markets across Asia bounced back on Wednesday, with Korea and Hong Kong leading the gains, although both were recovering from 12-month lows hit the day before.
- The share rally in Asia is set to continue into European and US trading, with Nasdaq futures indicated up by well over 1%.
- Oil also rebounded after steep falls in the previous session, ahead of a meeting by the OPEC group tomorrow.
- In testimony delivered at a joint congressional hearing with Janet Yellen, Fed Chair Jerome Powell admitted that it is appropriate to consider normalizing ultra-accommodative monetary policy at the upcoming meeting, given the strength of the economy and inflationary pressures. The Chair also said that it’s time to stop referring to inflation as “transitory” and that the Omicron variant poses “downside risks to employment and economic activity and increased uncertainty for inflation.
- The Caixin China General Manufacturing PMI fell to 49.9 in November from 50.6 in October, missing market forecasts of 50.5 and plunging into contractionary territory for the 2nd time since April 2020. The findings from the private survey, contrasted those in an official survey on Tuesday that showed manufacturing activity grew for the first time in three months.
- Salesforce.com forecast current quarter profit below Wall Street estimates on Tuesday as it faces stiff competition from rivals including Microsoft, sending its shares down 6% in extended trading.
- BioNTech CEO said on Wednesday that their jointly developed vaccine with Pfizer will likely offer strong protection against any severe disease from the new Omicron virus variant and if needed the company is ready to relaunch a vaccine in 100 days. The real worry he said is the amount of unvaccinated people, not so much the Omicron variant.
- The Turkish lira surpassed historical lows as President Erdogan doubled down on central bank.
The summary as at 30.11.21
Markets staged a broad-based comeback on Monday that saw the S&P 500 jump 1.3% after President Joe Biden said economic lockdowns are currently off the table and there will be no new travel restrictions. European markets also ended higher on Monday, led by a recovery in the travel & leisure sector as investors waited for insight on the new coronavirus variant omicron and bought dips of Friday’s dramatic rout.
- Asian share markets weakened sharply in late trading Tuesday, giving up earlier gains as investors worried the omicron variant will prove more resistant to vaccines and could cause more widespread global economic disruption.
- Stock futures on both sides of the Atlantic are pointing to a sharply lower open on Tuesday, reversing earlier indications of a positive open.
- Oil prices gave up gains on Tuesday, falling more than 2% along with broader financial markets.
- Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. He also said in a separate interview added that it could take months to develop and ship an omicron specific variant.
- China’s official manufacturing Purchasing Managers’ Inde for November came in a 50.1 from 49.2 in October, beating market consensus of 49.6. This was the first growth in factory activity since August, amid easing power shortage and a sharp drop in some raw material prices.
- Federal Reserve Chairman Jerome Powell believes that the omicron variant poses a threat to the central bank’s mandate to achieve stable prices and maximum employment.
- Twitter announced that co-founder Jack Dorsey has stepped down as CEO effective immediately, succeeded by Parag Agrawal, the company’s chief technical officer. Dorsey is expected to remain on the company’s board at least through next year.
The summary as at 29.11.21
Investors will come back from the weekend looking to determine if the market sell-off tied to a new Covid variant is overdone or if the pandemic recovery timeline is being pushed back. In a shortened session on Friday, Wall Street fell by over 2% while in Europe losses were even higher.
- Shares in Asia largely fell on Monday trade as investors continue to exit riskier assets on the threat to economic recovery from the Omicron coronavirus variant. The Nikkei 225 led the losses, trading at an over 3-month low after Prime Minister Fumio Kishida said that Japan will bar entry to foreign visitors from November 30. Stock in China were almost flat, reversing their early sharp losses.
- Elsewhere, US stock futures moved higher by around 1% following Friday’s big sell-off as investors prepared to wait a few weeks to see if the Omicron coronavirus variant would really derail economic recoveries and the tightening plans of some central banks. Similarly European markets were poised for a strong rebound.
- Oil priced bounced more than $3 a barrel, as traders covered shorts amid speculations of an aggressive response from OPEC+ to counter downward price pressures from the Omicron. OPEC+ will meet on Thursday to evaluate the impact on the new variant on the global economy and fuel demand, with markets speculating on a potential output cut instead of the planned increase.
- The WHO labeled the omicron strain as a “variant of concern” that could be more transmittable that other strains of the virus. After being first reported in South Africa, the variant for eventually also found in the UK, Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong. Vaccine makers are investigation whether new formulations are required to fight the new variant, with Moderna saying that it could roll out a reformulated vaccine early next year.
- Shares in China Evergrande Group fell this morning after its chairman trimmed his stake in the cash-strapped property developer to raise about $344 million.
The summary as at 26.11.21
Equity markets in Europe closed mostly in the green on Thursday, with the DAX 30 bouncing back from a three-week low the previous day. US markets were closed yesterday on account of Thanksgiving holiday.
- Major bourses in Asia plunged on Friday, amid escalating fears over a new Covid-19 variant first discovered in South Africa. The Nikkei led the losses, slumping over 2.5% to a near 1-month low. Stocks in Hong Kong sank to an almost 7-week low, and those in Australia slipped to their lowest in 6 weeks.
- US stock futures fell ahead of a shortened session on Friday while European markets are also expected to open sharply lower;
- Oil prices slid more than 1% on Friday on concerns that a global supply surplus could swell in the first quarter following a coordinated release of oil reserves among major consumers, led by the US. The OPEC’s advisory board expects a 400,000 barrels per day excess in the oil markets in December and predicted that the surplus would expand to 2.3 million bdp in January and 3.7 million bdp in February if consumer nations proceed with the release.
- The World Health Organisation is monitoring a new variant with numerous mutations to the spike protein, scheduling a special meeting Friday to discuss what it may mean for vaccines and treatment. Meanwhile, Britian introduced travel restrictions on South Africa and five neighbouring countries after scientists detected this new variant in South Africa.
- Australian retail sales rebounded with a bang in October as the lifting of many stay-at-home restrictions unleashed a wave of pent-up shopping, further evidence the economy is recovering rapidly from a pandemic-induced slump. Data from the Australian Bureau of Statistics showed retail sales jumped 4.9% in October, extending September’s already strong 1.7% bounce.
- Japanese Prime Minister Fumio Kishida on Friday urged companies whose earnings have recovered pre-pandemic levels to raise wages by 3% or more at their labour talks next spring, aiming to achieve a virtuous cycle of growth and wealth distribution.
- Minutes of the European Central Bank last policy meeting indicated that the very generous monetary policy support to the economy would need to be reassessed at some point in the future in view of the improved inflation outlook, and be brought towards a more neutral configuration over time. Officials agreed that the recent price pressure was expected to be more persistent than previously anticipated but reiterated once again that the uptick in inflation was driven largely by temporary factors that would fade in the course of 2022.
- Chinese regulators have asked top executives of ride hailing giant Didi Global to devise a plan to delist from the New York Stock Exchange due to concerns about data security.
- The European Medicines Agency (EMA) approved BioNTech’s coronavirus vaccine for children between five and eleven years.
The summary as at 25.11.21
All three main US indices rebounded on Wednesday ahead of the Thanksgiving holiday and a shortened-session on Friday after earlier booking losses following the release of Fed minutes. Economic data gave investors much to think about over the holidays, with consumer spending rising more than expected in October and inflation remaining on an upswing. Elsewhere, European stock markets closed mixed yesterday, with Frankfurt’s DAX 30 hitting a new three-week low.
- Major Asian bourses were mainly lower on Thursday after reports that the US Fed may raise interest rates sooner than anticipated if inflation remains high. The Kospi led the losses, down for the third straight session, as investors reacted to a rate hike by the Bank of Korea. Stocks in Japan rebounded, however, as tech stocks tracked Wall Street peers higher following a drop in bond yields.
- European stocks are expected to open higher this morning while US markets are closed today for the Thanksgiving holiday.
- Oil prices ticked lower on Thursday with investors waiting to see how major producers respond to the emergency crude release by major consuming countries designed to cool the market, even as data pointed to healthy US fuel demand.
- In the latest Fed minutes, policymakers indicated that uncertainty about the inflation outlook had increased and that significant price pressures should last for longer than previously expected due to persistent supply bottlenecks. At the same time, members agreed that progress on vaccinations and an easing of constraints should continue to support the economic recovery and employment as well as a reduction in inflation.
- The personal consumption expenditure (PCE) price index in the US rose by 0.6% from a month earlier in October. It was the largest price increase since April. Year-on-year, the PCE index advanced 5.0% and the core index increased 4.1%.
- US personal spending jumped 1.3% in October, higher than a 0.6% rise in September and beating market forecasts of 1%. It is the 5th consecutive gain and the biggest increase in 7 months, as American consumers continue to spend more amid large pay increases and despite rising prices.
- Social Democrat Olaf Scholz announced that he had reached a three-way coalition deal with the Greens and Free Democrats to form Germany’s next government. The agreement will see Olaf Scholz, Germany’s former finance minister, become Germany’s new chancellor when Angela Merkel leaves the post in early December.
- Shares of John Deere were a stand-out on the corporate front as the world’s farm equipment maker hardly missed a beat during a more than month long strike. The company posted its highest ever profit and guided full-year estimates higher. Shares touched their highest level in at least nine months.
- It was a much different story for apparel retailer Gap which lowered its full-year forecast as it gets whacked by supply shortages and the shares reacting by losing nearly one-quarter of their value.
- Chinese real estate developer Kaisa announced plans for paying back investors, temporarily alleviating concerns about a default. It shares popped 20% in the market open, before paring some gains. It was the first day of trading after a nearly three-week halt.
- The US government put a dozen of Chinese companies on its trade backlist on Wednesday for national security and foreign policy concerns, citing in some cases their help developing the Chinese military’s quantum computing efforts.
The summary as at 24.11.21
The S&P and the Dow Jones wavered along the session to close higher on Tuesday as gains in financial and cyclical stocks outweighed the tech losses. Meanwhile, the Nasdaq tumbled 0.5%, as higher yields dragged down the tech stocks. Elsewhere, European stock markets closed mostly in the red as concerns over potential new restrictive measures across Europe continued to weigh on sentiment.
- Shares in Asia were mixed in Wednesday trade, with Japanese stocks leading losses regionally;
- US stock futures were little changed while their European counterparts were also expected to open around the flatline;
- Oil futures were steady this morning, after rallying more than 2% in defiance to a US-led coordinated release of crude stocks from strategic reserves meant to lower prices. The US announced a 50 million barrel release of oil from Strategic Petroleum Reserves, India is set to release 5 million barrels and the UK could release the equivalent of 1.5 million barrels. Japan likewise confirmed that it would release some oil reserves as well;
- The Biden administration has invited Taiwan to its “Summit for Democracy” next month, a move likely to infuriate China, which views the democratically governed island as its territory;
- The IHS Markit US Composite PMI declined to 56.5 in November from 57.6 in the previous month, signaling a sharp upturn in private sector activity. Meanwhile the Services component dropped to 57.0 in November from 58.7 in October while the Manufacturing gauge increased to 59.1 from a 10-month low of 58.4 in October;
- The Turkish lira crashed to a historic low on Tuesday after President Erdogan defended his central bank’s continued contentious interest rate cuts amid rising double-digit inflation which is now near 20%;
- Toshiba’s second largest shareholder objected to the Japanese conglomerate’s plan to split itself into three companies and called on it to instead solicit offers from potential buyers;
- Trading could slow in the coming days due to the Thanksgiving holiday in the US, but investors will be watching a slew of economic data due out later today, including weekly unemployment claims, a GDP update, personal income, consumer confidence reads and Federal Reserve FOMC minutes.
The summary as at 23.11.21
US stocks waver on Monday with both the S&P 500 and the Nasdaq erasing earlier gains to close below the redline as higher yields weighted on growth stocks. Elsewhere, European shares were flat, under pressure from fears of a resurgent coronavirus pandemic.
- Major bourses in Asia mainly fell on Tuesday led by Hong Kong which plunged to a more than 6-week low, with technology shares tracking a sell-off by their peers on Wall Street. The ASX gained markedly, however, lifted by flash data showing factory activity in Australia grew the most in 5 months in November;
- Futures on both sides of the Atlantic were steady this morning;
- Oil futures remained under pressure on Tuesday amid reports the US is set to unveil a release of its emergency oil reserves in a bid to lower gasoline prices. A Reuters article revealed that the US is expected to announce on Tuesday a loan of crude oil from its emergency stockpile as part of a coordinated effort with major Asian oil consumers to lower energy prices;
- President Biden nominated Federal Reserve Chair Jerome Powell for a second four-year term, a sign the central bank will continue its tightening plans and keeping stability at the central bank. Lael Brainard, who was the other top candidate and is seen as more dovish, will be vice chair;
- Zoom Video Communications third-quarter revenue growth rate slowed to 35% as demand for its video-conferencing tools eased from the pandemic-fueled heights last year, sending its shares down about 6% on Monday;
- Shares on BioNTech and Moderna gained 11.0% and 7.2%, respectively on Monday after the FDA last Friday cleared the coronavirus booster shots for all US adults;
- Tesla CEO Elon Musk hinted at the company’s plan to launch its Model S Plaid electric car in China, the world’s largest car market, “probably around March”. The car which costs around $130,000 has a 520-mile range and can reach speeds of up to 320 kilometers per hour.
The summary as at 22.11.21
Wall Street finished mixed Friday, as energy shares dragged down the S&P 500 index to a slight loss while strength in tech shares lifted that Nasdaq Composite to a record high. In Europe, the gains evaporated with Friday’s session.
- Shares in Asia were mixed in Monday trade as China kept its benchmark lending rate unchanged;
- US stock futures drifted higher this morning as the market entered a holiday-shortened week, a historically strong period for US equities. Futures on European markets were also pointing to a positive start to the week;
- Oil prices came off seven-week lows on Monday but remained under pressure after Japan said it was weighing releasing oil reserves and as the Covid-19 situation in Europe worsened, raising concerns about both oversupply and weak demand;
- Federal Reserve Vice Chair Richard Clarida said fourth-quarter growth will likely be very strong, and the Fed may need to discuss the pace of its tapering bond purchases;
- The Bank of England’s top two officials raised questions about the certainty of an interest-rate increase in December, noting the decision would be finely balanced. Governor Andrew Bailey said risks to the UK economy are “two-sided” at the moment, with slowing growth and rising inflation, echoing comments made by Chief Economist Huw Pill;
- UBS and Deutsche Bank both named the successors for the role of chairman on their banking groups. UBS on Saturday nominated former Morgan Stanely President Colm Kelleher to succeed Axel Weber as chairman next year. A day earlier, Deutsche Bank proposed Dutch insurance veteran Alexander Wynaendts for the same role, replacing Paul Achleitner;
- Telecom Italia has received a €10.8 billion approach from US fund KKR aimed at taking Italy’s biggest phone group private. KKR’s move comes as Telecom Italia’s CEO Luigi Gubitosi battles for survival after coming under fire from top investor Vivendi following two profit warnings in three months;
- Prosus on Monday posted a surge in profit during the six months ended 30th September, following 41% growth in revenue driven by the performance of the classifieds and e-commerce segment;
- On the pandemic front, Austria begins its fourth lockdown today, with neighbouring Germany warning it may follow suit, shutting Christmas markets, bars, cafes and theatres;
- In terms of data releases in the US, FOMC minutes, personal consumption expenditure, and Fed chair announcement will take the spotlight in the shortened Thanksgiving week. Flash PMIs for November will provide an update on the health of several economies, including the US, Japan, Euro Area, Germany and the UK.
The summary as at 19.11.21
US stocks cut early session losses to close higher on Thursday as strong earnings outweigh inflation jitters. Both S&P and Nasdaq closed at a new record high fuelled by gains in technology and retailers’ shares.
- Asian shares fell on Friday as disappointing earnings from Alibaba heightened worries about Beijing’s broad regulatory crackdown and slowing growth in the world’s second-biggest economy. The Nikkei outperformed, however, ending in the green after Japanese Prime Minister Fumio Kishida announced a fresh stimulus package with spending worth the equivalent of $490 billion;
- Equity futures were pointing higher on Friday morning in both the Europe and the US;
- Oil prices rose on Thursday, bouncing after a drop to six-week lows as investors wondered how much crude major economies would release from their strategic reserves and how much that would ease global crude demand pressure;
- Alibaba reported lower fiscal second-quarter earnings on Thursday that fell short of analysts’ estimates and slashed its forecast for annual revenue growth on increased competition and a regulatory crackdown, sending its stock tumbling 11%;
- Bitcoin fell to a one-month low on Friday and was headed for its worst week in six months as traders have booked profits from a long rally and been spooked by an expectation that creditors of collapsed crypto exchange Mt Gox might liquidate their payments;
- Germany announced new Covid restrictions for the unvaccinated which includes a limit on public life in areas that exceed a certain threshold of hospital admissions.
The summary as at 18.11.21
US stocks drifted lower on Wednesday as inflation concerns outweighed upbeat earnings reports. Meanwhile European stocks closed barely unchanged, hovering at all-time highs.
- Major bourses in Asia mainly traded in the red on Thursday. The Hang Seng led the losses, sinking over 1.3%, dragged down by a plunge in shares of Evergrande as the developer sold its entire stake in a streaming platform. Stocks in Australia tried to recover, however, as authorities lifted nearly all Covid-19 curbs in Melbourne;
- Elsewhere future markets are indicating a flat start to Thursday’s trading sessions in both Europe and the US;
- Oil futures dipped further this morning, bringing losses in the past two days to about 5%, amid reports the US was asking other major oil consumers like China, India, Japan and South Korea to consider a coordinated release of oil reserves to bring prices down. Elsewhere, OPEC and the International Energy Agency continued to warn of potential oil surplus over the coming months and called for supply caution;
- The headline inflation rate in the UK rose to a 10-year high, raising the odds the central bank will hike rates next month, while the October annual inflation rate for the Eurozone was confirmed at a 13-year high of 4.1%;
- Nvidia forecast fourth-quarter revenue above analysts’ expectations on Wednesday, betting on growth in its data center business as more internet companies set out to invest in artificial intelligence and the metaverse;
- Shares of Cisco fell 6.3% in extended trading after it said it expects second-quarter revenue to grow 4.5% to 6.5% year-over-year, compared with Wall Street expectations of about 7.4%, as supply chain shortages and delays drive up costs;
- Baidu beat quarterly revenue and profit estimates on the strength of its cloud business, but warned that China’s regulatory crackdown and the pandemic would weigh on advertising sales in the coming quarters;
- Alibaba’s Singles Day sales grew at the slowest pace ever, underscoring strong regulatory and supply chain headwinds for China’s tech firms. Meanwhile the company is expected to report its quarterly earnings later in the day;
- Amazon is considering dropping Visa as partner on its US co-branded credit card after earlier confirming it would stop accepting Visa credit cards in the United Kingdom as a dispute over payments intensified;
- On the pandemic front, Ireland will join Austria and the Netherlands in reimposing Covid-19 restrictions, as the Irish government urged people to work from home and forced bars and restaurants to close by midnight. New restrictions are also expected to be announced in Spain, Italy, and Germany in the coming days.
The summary as at 17.11.21
US stocks marched toward a fresh record high on Tuesday as investor sentiment was bolstered by strong economic data and decent corporate earnings releases. In fact, by the close of trade, the S&P 500 had closed just a fraction beneath its all-time closing record, in a move that also brought the index’s year-to-date gains back above +25%, whilst Europe’s Stoxx 600 hit an all-time high as it posted its 16th gain in the last 18 sessions.
- Overnight in Asia, equity indexes are trading mostly lower this morning with the exception of the Shanghai Composite which has posted a modest advance;
- Looking forward, futures are indicating a muted start in the US and Europe later on;
- Oil prices dropped on Wednesday after US gasoline stocks fell more than expected last week, which could heighten pressure on the Biden administration to release oil from emergency reserves to cap soaring gasoline prices;
- US retail sales rose by 1.7% month-on-month in October, the highest level since March and rising faster than markets expected, reflecting strong consumer spending as well as spillover effects of rising prices;
- Industrial production in the US rose by 1.6% in October (vs. 0.9% expected), though it’s worth noting around half of that increase was a recovery from Hurricane Ida’s effects;
- St. Louis Federal Reserve bank president James Bullard said that the central bank should signal a more hawkish direction in the next couple of meetings to prepare in case inflation persists longer than anticipated, and maintained his projection that the Fed will need to raise rates twice in 2022;
- US President Biden said to reporters yesterday that he will announce the next Fed Chair “in about four days”;
- Home Depot shares jumped 5.73% on Tuesday after topping analyst estimates, while Walmart fell 2.55% as the company flagged “inflationary cost pressures” despite reporting good earnings. More retailers will report earnings on Wednesday including Target and Lowe’s;
- China Evergrande reported received a cash infusion equivalent to $1.1bn from billionaire Chairman Hui Ka Yan. The funds were raised by selling off his personal assets and share pledges;
- Prosus NV expects a large rise in earnings per share for the first half of its 2022 fiscal year, as it gained proceeds of $12.3 billion from selling part of its stake in Tencent in April;
- On the pandemic, it’s been reported that the Biden administration will announce this week that it plans to purchase 10 million doses of Pfizer’s Covid pill. The company will submit data for the pill to regulators before Thanksgiving. Pfizer will also license generic, inexpensive versions of the pill to low- and middle-income countries, which should be a global boost in the fight against the virus.
The summary as at 16.11.21
US stocks cut earlier session gains to close around the flatline on Monday, as higher yields weighed on tech stocks. There wasn’t a particular driver behind the declines, through Tesla weighed on sentiment after more Musk induced speculation about selling more of his holding permeated. European equities outperformed, with the Stoxx 600 reaching another record high, just as other indexes including the CAC 40 and the DAX ascended to fresh all-time high of their own.
- Major bourses in Asian were mostly higher on Tuesday, as traders watched the ongoing virtual meeting between US President Joe Biden and Chinese leader Xi Jinping, with both stressing their responsibility to avoid conflict. The Hang Seng led the gains, hovering at a 3-week high, buoyed by better-than-expected China’s economic data and relief in the property sector;
- Elsewhere futures are indicating a flat start to markets in the US and Europe;
- Oil staged a relief rally on Tuesday amid skepticism over the Biden’s administration’s approach in curbing high gasoline prices. However, crude oil remained under pressure as the threat of a supply boost by the US lingers, along with headwinds from a rising dollar and weakening demand outlook;
- ECB president Christine Lagarde said on Monday that tightening monetary policy to curb inflation could choke off the eurozone’s recovery, and maintained that factors pushing prices higher would fade next year, in an increasing contrast from hawkish hints from other central banks;
- President Joe Biden signed the more than $1 trillion bipartisan infrastructure bill into law on Monday, checking off the first piece of his party’s sprawling economic agenda. The package will put $550 billion in new funds into transportation, broadband and utilities;
- Boeing received an order from Emirates for two 777 Freighters worth more than $704 million at list prices. It also said Saudia selected it to deliver a suite of services to improve their 787 Dreamliner and 777 fleets’ operational efficiency;
- Royal Dutch Shell said on Monday it would scrap its dual share structure and move its head office to Britain from the Netherlands, pushed away by Dutch taxes and facing climate pressure in court as the energy giant shifts from oil to gas. The company aims to drop “Royal Dutch” from its name to become Shell Plc;
- Looking at the pandemic, cases are continuing to rise at the global level and a number of countries in Europe are moving to toughen up restrictions in response. In Ireland, the government is set to return to advice to work from home, and in Austria yesterday marked the start of their lockdown for the unvaccinated;
- US data releases today include retail sales, industrial production and capacity utilisation for October, while in Europe there’s the second estimate of Euro Area GDP in Q3 and UK unemployment for September.
The summary as at 15.11.21
Wall Street rallied on Friday, led by technology and communication services, but the major averages finished lower for the week on escalating inflation fears. Meanwhile, European shares closed their sixth straight week of gains at a new high on Friday, as strong results from Richemont rounded off a robust earnings season.
- Asian shares crept higher on Monday as Chinese economic data surprised on the high side;
- S&P futures firmed this morning while futures on the Eurostoxx 50 were pointing towards a lower open;
- Oil futures slipped further on Monday as the threat of a supply boost from the US looms over the market and amid signs of weaker demand. Meanwhile, OPEC also cut last week its world oil demand outlook for the fourth quarter by 330,000 barrels per day from the previous month’s forecast;
- China’s Industrial production rose by 3.5% year-on-year in October, faster than a 3.1% gain a month earlier and above market consensus of 3.0%. Meanwhile, retail sales also beat estimates, with the year-on-year reading in October rising by 4.9%, faster than a 4.4% increase in the previous month;
- The Japanese economy shrank 0.8% quarter-on-quarter in Q3 2021, compared with market expectations of a 0.2% fall and after a downwardly revised 0.4% growth in Q2, amid a resurgence of Covid-19 cases and persistent global supply chain disruptions;
- The UN climate conference in Scotland managed to hammer out a deal on emissions, but only by watering down a commitment to phase out coal;
- Airbus has received an order for 255 new aircrafts from US private equity firm Indigo Partners in the first significant deal for the company since the outbreak of the coronavirus pandemic;
- Johnson & Johnson plans to spin off its consumer health division to focus on pharmaceuticals and medical devices. The move follows similar announcements last week by conglomerates Toshiba and General Electric, which are under pressure to simplify their structures to increase focus;
- The retailer sector will be in the spotlight this week with earnings coming out from Walmart, Target, Home Depot and Lowe’s and the companies expected to provide their guidance for the upcoming holiday season. Retail also takes over the economic agenda with the October Retail Sales in the US hitting on November 16.
The summary as at 12.11.21
The S&P 500 stabilised yesterday after two successive days of declines thanks to a bounce back among the more cyclical sectors. Meanwhile in Europe, the advance was even more prominent, where the Stoxx 600, the DAX and the CAC 40 all reached fresh records.
- Major bourses in Asia mainly rose on Friday amid hopes that the worst price hikes in the US could be soon over. Stocks in Japan surged 1%, on a strong corporate outlook, while those in Australia were up for the 1st time in 5 sessions. Meanwhile, Chinese markets were higher, as traders await a virtual summit between US President Biden and Chinese leader Xi Jinping Monday;
- Looking ahead, futures are indicating a positive start in the US and Europe;
- Oil prices edged lower on Friday as an inflation-driven dollar rally and a weaker oil demand forecast by the OPEC, dampened sentiment;
- Dollar bonds of Chinese property developers rallied across the board on news that regulators may adjust rules so that developers can issue debt in the domestic interbank market. Another report showed that state-owned enterprises were pushing for the right to increase borrowing for mergers, which could make it easier for them to buy out struggling developers;
- Alibaba Group said on Friday that sales during its annual Singles’ Day shopping frenzy grew 8.5%, the slowest rate ever, underscoring strong regulatory and supply chain headwinds for China’s tech firms;
- In terms of geopolitics, Bloomberg reported that US officials had briefed their counterparts in the EU about a potential Russian invasion of Ukraine following a build-up in Russian forces near the Ukrainian border. Meanwhile Belarus’ President Lukashenko threatened to cut the transit of gas if the EU planned additional sanctions on his regime;
- On the data front, the only major release yesterday was the UK’s Q3 GDP reading which surprised on the downside with growth of 1.3% (vs. 1.5% expected), even though Covid-19 restrictions were much easier in Q3 relative to Q2.
The summary as at 11.11.21
Wall Street closed sharply lower on Wednesday, extending their losses throughout the day and adding to Tuesday’s sell-off as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red-hot inflation. Meanwhile, European equities outperformed, with the Stoxx 600 up for the day to reach an all-time high, just as the DAX and the CAC 40 also hit new records.
- Major bourses in Asia traded mainly lower on Thursday, tracking a pullback on Wall Street. Stocks in Australia led the losses, as employment fell in October while the jobless climbed to a 6-month high. The Shanghai Composite rebounded, however, on hopes that Beijing will relax polices to avoid a collapse in the property sector;
- Futures are indicating a muted start to the day in the US & Europe with S&P futures fractionally higher but DAX futures pointing lower, catching down with the late US sell-off;
- Oil prices were steady on Thursday after falling in the previous session on concerns rising inflation in the US, spurred by climbing energy cost, may prompt the government to release more strategic crude stockpiles do drive down prices;
- The annual inflation rate in the US surged to 6.2% in October, the highest since November of 1990 and above forecasts of 5.8%. The monthly rate increased to 0.9% from 0.4% in September, also higher than forecasts of 0.6%, boosted by higher cost of energy, shelter, food, used cars and trucks, and new vehicles;
- Tesla CEO Elon Musk sold nearly $5 billion in Tesla stock, according to financial filings out Wednesday evening with the trades carried out between Tuesday and Wednesday. That accounts for around 2% of his total holdings;
- Disney reported fiscal fourth-quarter earnings after the bell on Wednesday which missed Wall Street estimates across the board, sending the stock down more than 4$ in after-hours trading;
- China Evergrande is said to have paid $148 million in coupons just before the 30-day grace period ended on its dollar bonds after it skipped the payment last month, sending its shares 5.5% higher in Hong Kong;
- Shares of Rivian Automotive surged as much as 53% in its Nasdaq debut on Wednesday, giving the Amazon-backed electric vehicle maker a market valuation of more than $100 billion after the world’s biggest initial public offering this year.
The summary as at 10.11.21
The long equity advance finally petered out yesterday as the S&P 500, the Nasdaq and Europe’s Stoxx 600 all fell from their record highs in the previous session although the equal weighted S&P 500 was almost flat, showing that there wasn’t huge breadth to the US weakness.
- Asian shares fell in Wednesday trade as investors reacted to the release of Chinese inflation data for October. Meanwhile shares of Chinese real estate firm Fantasia Holdings plunged about 40% after returning to trade after being suspended for more than a month amid a failed bond repayment that matured early October;
- Futures are pointing to a weak start in the US and Europe as investors await a key inflation data due for release on Wednesday afternoon;
- Oil prices extended gains on Wednesday after preliminary data showed an unexpected decline in US crude stocks last week coupled with a rebound in fuel demand amid easing travel curbs. Moreover, the US Energy Information Agency said in a report released Tuesday that it sees demand returning faster than supply, further pressuring prices and reducing inventories;
- China’s annual inflation rate accelerated sharply to 1.5% in October from 0.7% a month earlier, above market estimates of 1.4%. This was the highest figure since September 2020, attributed to a faster rise in cost of non-food and a softer decline in food prices. PPI at +13.5% was also a 26-year high and above expectations;
- General Electric will split into three public companies as the US industrial conglomerate seeks to simplify its business, pare down debt and breathe life into a battered share price. The three businesses would focus on energy, healthcare and aviation;
- Rivian Automotive, the electric vehicle maker backed by Amazon and Ford, priced its IPO on Tuesday at $78 a share, up from an initial range of $57 to 62. At the offer price, Rivian is already worth almost as much as Ford and General Motors. The stock will trade on the Nasdaq under ticker symbol RIVN;
- Argentina is negotiating a new loan program with the IMF. The proceeds of the new loan would be used to pay its existing $19bn debt due in 2022 to the IMF itself;
- The main data highlight for the day will be the release of CPI data from the US for October, with economists looking for a reacceleration in the monthly prints, with a +0.6% forecast for the headline measure, and +0.4% for the core.
The summary as at 09.11.21
US stocks rose Monday following the passage of President’s Joe Biden’s infrastructure bill, extending last week streak of record highs.
- Major stock markets in Asia were mainly lower on Tuesday, as traders offloaded risk assets ahead of inflation data release from Cina and the US. The Nikkei led the losses, down for the third session in a row, while Hong Kong shares stayed at a near one-month low, amid lingering worries over a liquidity crisis in the Chinese property sector;
- Equity futures are indicating that the winning streak in the US and Europe might be under threat with S&P futures and DAX futures both down this morning;
- Oil prices rose for a third session on Tuesday as the passage of the US infrastructure bill, Chinese exports and the global post-pandemic recovery lifted the outlook for fuel demand;
- Evergrande missed coupon payments on two of its dollar bonds last Saturday, kicking-off a 30-day grace period to make the payments before being considered a default. The non-payment is now new for Evergrande since the company has skipped coupons since September, but has paid them before the 30-day deadline twice;
- The US Federal Reserve warned yesterday of potential spillover from China’s real estate troubles to the US financial system;
- The Chinese government is planning to issue more than a dozen licenses that will allow companies to offer after-school tutoring on a nonprofit basis while being allowed to make a profit on other businesses, such as tutoring adults for professional exams;
- Advanced Micro Devices on Monday said it has won Meta Platforms as a data center chip customer and also announced a range of new chips aimed at taking on larger rivals such as Nvidia in supercomputing markets, as well as smaller competitors in the cloud computing market;
- Shares of video-game company Roblox soared as much as 35% in extended trading on Monday after the company reported third-quarter results that impressed analysts;
- Tesla shares closed down nearly 5% on Monday after CEO Elon Musk asked his Twitter follower if he should sell 10% of his stock in the electric vehicle company.
The summary as at 08.11.21
Stocks rallied to fresh record highs Friday following a stronger than expected jobs reported. All three major market indices closed at new all-time highs, even after a late drop in tech stocks. For the week, the S&P 500 gained 2%, pushing its year-to-date gains to 25% while the Nasdaq rallied 3.1% for its best weekly showing since April.
- Major stock markets in Asia traded lower on Monday, amid worries ahead of inflation data from the US and China this week. The Kospi led the losses, sinking to a near one-month low, on mounting fears that virus cases in South Korea would trend upward again. Meanwhile, stocks in Hong Kong retreated while those in China gained modestly as traders digest Chinese trade date for October;
- Equity futures were mixed this morning after optimism over easing US travel restrictions sent economic reopening-stocks and the major averages higher on Friday;
- Oil futures advanced on Monday as OPEC+ continued to ignore President Biden’s calls for higher output, with state-owned Saudi Aramco raising its December official selling price for Arab light crude to $2.7 a barrel, up by $1.4 from this month. President Biden said on Saturday that the US has “other tools” in dealing with high oil prices;
- Exports from China grew 27.1% year-on-year in October after a 28.1% surge in September and compared with market expectations of 24.5%. Meanwhile, imports rose by 20.6% and were shy of market expectations of a 25.0% gain and after a 17.6% growth in September;
- The US House of Representatives passed a more than $1 trillion bipartisan infrastructure bill late Friday that would put $550 billion in new funding into transportation, broadband and utilities. The Senate had originally approved the bill in August;
- The US economy added 531k jobs in October, the most in 3 months and above market forecasts of 450k as Covid-19 cases dropped and employers offered higher wages and more flexible hours. Nonfarm employment has increased by 18.2 million since a recent trough in April 2020 but is down by 4.2 million from its pre-pandemic level;
- Pfizer said Friday that Paxlovid, its experimental antiviral pill for Covid-19, reduced by 89% the risk of hospitalisation or death in patients at high risk of severe illness within 3 days of the onset of coronavirus symptoms. The company is in talks with 90 countries over supply contracts and countries such as the UK and South Korea have already secured 250,000 and 70,000 courses respectively of the Pfizer treatment;
- Berkshire Hathaway said on Saturday that global supply chain disruptions kept a lid of its ability to generate profits, while rising equity prices caused it to sell some stocks and boost its cash hoard to a record;
- Elon Musk asked his 62.5 million followers on Twitter in a poll over the weekend whether he should sell 10% of his Tesla stock. He said that he will abide by the results of the poll, whichever way it goes. The poll garnered more than 3.5 million votes with 57.9% of respondents approving the sale of shares;
- The rush of earnings reports slows down just a bit in the week ahead, but still sees big names like Disney, PayPal, Nio, and Alibaba reporting. There is also a highly expected IPO by Rivian Automotive at a valuation that is expected to top $60 billion.
The summary as at 05.11.21
Markets had another buoyant session yesterday as they received a dovish surprise from the Bank of England. In response, markets shifted gear and pushed back pricing of future rate hikes, which in turn lead to a sharp rally across the curve in sovereign bond markets in major economies. And with investors lowering the odds of a near-term removal in monetary policy support, equities took another leg higher, with the S&P 500 advancing for the 15th time in the last 17 sessions to reach a fresh all-time high.
- Chinese markets dragged on Asian shares on Friday amid mounting fears over widespread Covid-19 cases in China since the first wave in Wuhan and as worries about a liquidity crisis in the Chinese property sector deepened;
- Equity futures are muted this morning ahead of the highly anticipated October jobs report;
- Oil prices rebounded on Friday, regaining a little ground from month lows hit a day earlier, after a report that Saudi Arabia’s oil output will soon surpass 10 million barrels per day for the first time since the outset of the Covid-19 pandemic. Meanwhile OPEC+ has yesterday rejected calls for more supply, sticking to their plan of raising oil output by 400,000 barrels per day from December;
- The Bank of England voted by a majority of 7-2 to leave interest rates at record low levels, and by a majority of 6-3 to leave its bond-buying programme unchanged. This came in spite of the fact that the BoE upgraded their inflation forecasts yet again, now seeing CPI peaking “at around 5% in August 2022”;
- Trading in shares of Chinese developer Kaisa Group Holdings was suspended on Friday, a day after the company missed a payment to onshore investors on a wealth management product, raising liquidity concerns;
- Moderna swung to profit in the third quarter, its topline fueled by sales of its Covid-19 vaccine, but missed analysts estimates and issued an updated sales forecast that fell short of Wall Street views;
- Delta Air Lines has seen a 450% surge in international bookings in the six weeks since September 20, when the US said it would reopen for fully vaccinated visitors;
- Later today we will see the release of the US jobs report for October, with economists looking for a 400k increase in nonfarm payrolls. Ahead of the release, we’ve seen some fairly positive labour market data this week, with the ADP’s report of private payrolls exceeding expectations on Wednesday, and yesterday the weekly initial jobless claims for the week through October 30 falling to a fresh post-pandemic low.
The summary as at 04.11.21
Wall Street’s main indices extended gains on Wednesday to close at a new record high for the fourth consecutive session after the Fed said it will begin winding down its monthly asset purchases later this month but gave no clue on the timelines of rates hikes. Positive data supported European markets ahead of the Fed, where the Stoxx 600 advanced to hit another all-time high.
- In Asia, most major indices are trading higher this morning;
- Equity futures were steady on both sides of the Atlantic in early trading on Thursday;
- Oil prices slipped further this morning amid a buildup in US crude stocks and on news that Iran is set to resume talks with world powers this month;
- The Fed kept close to expectations and delivered the $15/bn a month taper. The Fed maintain the pace of taper would change in step with any changes to the outlook. The statement slightly tweaked the characterisation of inflation, noting that it was expected to be transitory. Chair Powell admitted the change reflected the reality that inflation has been much higher than they had expected;
- Meanwhile, ECB President Lagarde sounded in no hurry to raise rates. In a speech yesterday, she said that their three conditions for raising rates “are very unlikely to be satisfied next year”, as “the outlook for inflation over the medium term remains subdued” in spite of the recent surge in inflation;
- Central banks will remain in the spotlight again today thanks to the Bank of England’s policy decision. Expectations are that they will deliver their first post-pandemic rate hike of 15bps, taking the Bank Rate up to 0.25%, as well as end their current QE program;
- In the US, the ISM services index for October rose to a record 66.7 (vs. 62.0 expected). Before that we also had the ADP’s report of private payrolls for October, which showed an increase of +571k (vs. +400k expected), the strongest since June. That comes ahead of tomorrow’s US jobs report, where economists are looking for growth of +400k, with the unemployment rate ticking down to 4.7%;
- Shares of Activision Blizzard tumbled 14.1% yesterday after the videogame publisher delayed the launch of two much-awaited titles, as its co-leader Jen Oneal decided to step down from her role;
- Deutsche Post DHL increased its forecast again on Thursday for short- and medium-term profits as global trade recovered and pandemic-driven e-commerce shipments stabilised at a high level as stores reopened;
- Credit Suisse will pare back its investment bank and focus on building its wealthy client base, the Swiss bank said on Thursday, as it regroups following a string of scandals.
The summary as at 03.11.21
World shares continued to perform strongly and a number of major indices climbed to fresh all-time highs yesterday. The S&P 500, the Nasdaq, the Dow Jones and Europe’s Stoxx 600 all hit new records, whilst France’s CAC 40 exceeded its previous closing peak made all the way back in 2000. Positive earnings news helped bolster those indices.
- In Asia, the Shanghai Composite, the Hang Seng and the Kospi are all trading lower this morning. Japan’s markets are closed today due to the Culture Day;
- Futures on both sides of the Atlantic are pretty flat this morning;
- Oil prices fell on Wednesday as industry data pointed to a big build in crude oil and distillate stocks in the US and as pressure mounted on OPEC to increase supply;
- The Caixin China General Services PMI rose to 53.8 in October from 53.4 in September which is the highest figure in 3 months;
- Pfizer reported its quarterly results yesterday, raising its full-year forecasts on the back of strong vaccine demand and noted it had the capacity to produce as much as 4 billion shots next year;
- Shares of Avis Budget Group surged on Tuesday by over 100% as retail investors rushed to get a piece of the heavily-shorted US car rental company. The company gained after quarterly results beat Wall Street estimates and said that it has been in talks with manufacturers about its plans to add more electric vehicles to its fleet;
- Lufthansa posted a return to operating profit in the third quarter on Wednesday for the first time since the beginning of the pandemic, boosted by the easing of Covid-19 travel restrictions and strong demand in the summer season;
- US ISM Services PMI and the November Federal Reserve’s meeting are due today. A tapering of bond purchases is widely expected to be announced during the FOMC meeting.
The summary as at 02.11.21
Risk assets got off to a strong start to the month as a range of global equity indices advanced to all-time records yesterday, including the S&P 500, the Nasdaq, the Stoxx 600, and the MSCI World Index.
- In Asia, the Nikkei and the Shanghai Composite are trading lower, while the Hang Seng and the Kospi are edging higher;
- Elsewhere futures for the S&P 500 and major European markets are pointing to a negative opening;
- Oil prices rose on Tuesday as OPEC fell short of its target increase in October. A Reuters survey showed on Monday that OPEC’s oil output rose 190,000 barrels per day in October, falling short of the 254,000 increase permitted under the supply deal;
- The Reserve Bank of Australia scrapped the 0.1% yield target on April 2024 government bond during its November meeting and policymakers now expect the first rate hike in 2023 rather than 2024 previously;
- The ISM manufacturing index reading for October of 60.8 (vs. 60.5 expected) came in slightly above expectations in the US, but the prices paid order similarly rose to 85.7 (vs. 82.0 expected) in its second successive monthly increase;
- Telsa is opening its charging network to other electric cars for the first time with a pilot program in the Netherlands. Meanwhile the company said on Monday that it has yet to sign a contract with rentail car company Hertz;
- Standard Chartered rode a recovery in pandemic-hit markets to post a stronger-than-expected pre-tax profit for the third quarter on Tuesday, aided by lower credit charges and growth in trade finance.
The summary as at 01.11.21
The Standard & Poor’s 500 index rose 1.3% last week, lifting October’s monthly advance to 6.9%, as US corporations’ Q3 financial results continued to come in mostly above estimates. In Europe, the Euro Stoxx 50 ended the month 5.0% higher after registering its highest percentage gain since March 2021.
- In Asia, the majority of the indices are up with the Nikkei making the biggest gains as Japanese companies benefit from a post-election boost, but mixed Chinese PMI data has contributed to the Hang Seng and CSI to trade lower;
- US and European equity futures are broadly pointing to the upside;
- WTI crude futures retreated slightly on Monday, after China reported that it released gasoline and diesel reserves to increase market supply and support price stability. US energy firms also added oil and natural gas rigs for the 15th straight month in October, according to energy services firm Baker Hughes Co. However, oil prices remained near 7-year highs ahead of the Nov. 4 OPEC+ meeting;
- The Caixin China General Manufacturing PMI unexpectedly was at a four-month high of 50.6 in October 2021, compared with market consensus and September’s figure of 50.0, amid a further recovery in domestic demand with the subindex for total new orders hitting their highest since June;
- Ryanair reported its first quarterly profit since before the onset of COVID-19, but said it expects to post an annual loss of up to €200 million euros as it would be forced to discount tickets to fill its planes over the winter. The company also said it could potentially delist from the London stock exchange amid a material decline in share volumes post-Brexit;
- Barclays said on Monday that chief executive Jes Staley is to stand down following British regulators’ investigations into his dealings with Jeffrey Epstein;
- Key for the markets this week will be Wednesday’s FOMC meeting where markets expect the Fed to announce a slowdown of its asset purchases at a pace of USD15bn per month, starting in mid-November.
The summary as at 29.10.21
Another string of positive surprises lifted stocks yesterday, with the Nasdaq and S&P 500 reaching yet another record high.
- In Asia, equities are mixed after some late earnings misses in the US and disappointing regional economic data;
- Equity futures in both the US and Europe are pointing to a lower open this morning;
- In energy markets, oil futures are mixed, as the WTI is marginally lower and Brent is advancing;
- Apple shares dropped more than 3% in extended trading on Thursday as Q4 revenue fell short of expectations due to larger-than-expected supply constraints. Overall revenue was still up 29% on an annual basis and each of its product categories grew on an annual basis. The company didn’t provide official guidance but said it expects solid year-over-year revenue growth in the December quarter despite the fact Apple will face worse supply constraints;
- Amazon stock fell 4% after hours after it reported weaker-than-expected results for the third quarter and delivered disappointing guidance for the critical holiday period;
- Facebook is changing its corporate name to Meta, reflecting the company’s increased focus on building a virtual world, known as a metaverse;
- The advance Q3 GDP in the US came in at +2.0% versus +2.6% expected, its slowest pace in more than a year, boosting the narrative of slower growth;
- ECB President Christine Lagarde fell short of convincing markets that the European Central Bank will remain dovish amid elevated levels of inflation. The head of the ECB said that inflation was widely discussed during the meeting, against market expectations that policymakers would hold onto the transitory inflation story;
- President Biden addressed the nation to sell the public on a $1.75 trillion social and climate spending framework after prolonged negotiations. Along with the big outlays, the proposal includes revenue raising measures via higher tax surcharges on those making more than $10 million, a 15% minimum corporate tax rate, a 1% excise tax on stock buybacks, and funding to improve IRS enforcement of the current tax code;
- Evergrande has made payments for an offshore bond coupon ahead of the expiry of a grace period on Friday, meeting its second US dollar repayment obligation this month;
The summary as at 28.10.21
US equities traded mixed on Wednesday as some meaningful losses from social media companies Twitter and Snap and index giants Visa and Mastercard weighed on the markets. Meanwhile, Microsoft and Google pushed to all-time highs on better-than-expected Q3 results. In Europe stocks saw a weaker session as Germany cuts its growth forecast for 2021 from 3.5% in April to 2.6% yesterday on the back of supply disruptions.
- In Asia, most indices, bar the Kospi (amid strong results from Samsung), are down as the Nikkei, the Hang Seng and the Shanghai Composite follow on from Wall Street’s lead. Similar to Europe and the US, equities are being weighed down by growth fears;
- Futures market are indicating a slight rise at the start of trading on both sides of the Atlantic;
- WTI crude futures fell another 2% to around $81 a barrel on Thursday, down 5% from a peak of $85.41 hit on Monday, after EIA data showed crude inventories rose by 4.3 million barrels last week, more than the expected 1.9-million-barrel build. Oil prices also came under pressure amid reports that Iran agreed to restart broader talks with Western nations regarding its nuclear program, stoking speculation for Iranian oil to return to the markets;
- The Bank of Japan slashed its GDP outlook for FY 2021 to 3.4% from earlier forecasts of 3.8%, citing the impact of the pandemic on services consumption and a slowdown in exports and output as supply disruptions persisted. The central bank kept rates and asset purchases unchanged;
- The Bank of Canada became the latest central bank to decisively act on the risk of higher inflation as it ended its quantitative easing programme earlier than expected and shifted forward the expected timing of interest rate hikes from the second half of 2022 to the middle quarters of 2022;
- Airbus raised full-year financial targets after a narrower-than-expected dip in third-quarter profits, and stuck to a goal of delivering 600 jetliners this year after driving down costs during the pandemic;
- Meanwhile Boeing lost $109 million in the third quarter as it struggled to fix problems with its 787 Dreamliner and a space capsule that would ferry astronauts to the international space station. Those setbacks overshadowed rising orders and deliveries;
- Ford Motor on Wednesday reported a stronger-than-expected third-quarter profit and raised its full-year earnings forecast as strong demand for its trucks helped offset the hit from a global semiconductor shortage. However, the company cautioned that higher steel and aluminum prices could cost it $1.5 billion next year, and warned of inflationary pressure impacting a broad range of costs in 2022;
- In other earnings releases yesterday, McDonalds, Coca-Cola and GM all beat estimates while Hilton was just about in line;
- Advisers representing China Evergrande and a group of its offshore bondholders have taken steps toward debt negotiations. The advisers are seeking to exchange information about the status of various projects, liquidity and asset valuation, after earlier outreach attempts were rebuffed;
- The day’s main highlight is the ECB meeting. In terms of data releases, we have the US weekly initial jobless claims, core PCE and advance Q3 GDP. In corporate earnings, Apple, Amazon, Mastercard, Royal Dutch Shell, Volkswagen and Lloyds Banking Group are among companies reporting.
The summary as at 27.10.21
Strong earnings and a number of positive surprises in an array of economic data helped push the S&P 500 and the Dow Jones Industrial to new record highs, while the Nasdaq fell short of beating its record set on 30th September. On the other side of the Atlantic, European equities notched solid gains as well, with most major European markets finishing well in the green territory, lifting the Euro Stoxx 600 just a fraction below its record high.
- Major stock markets in Asia were mainly lower on Wednesday, due to concerns over China’s plan to introduce a real estate tax, along with the prospect of contagion and more defaults in the country’s property sector;
- Equity futures this morning were pointing to a softer opening for both European and US markets;
- Crude futures eased this morning on surprise crude oil stockpile and fuel inventory increase last week in the US. The American Petroleum Institute released date on Tuesday pointing to a 2.3-million-barrel expansion in crude oil inventories in the week ending 22 October;
- Deutsche Bank this morning reported a fall in revenues at its investment banking unit but still managed to beat expectations and report its fifth consecutive quarter of profit;
- Microsoft on Tuesday forecast a strong end to the calendar year thanks to its booming cloud business but said supply chain woes will continue to impact key units such as those producing its Surface laptops and Xbox gaming consoles;
- Alphabet yesterday reported higher than expected third quarter ad sales, a sign that the business is overcoming new limits on tracking mobile users and that online shopping is as popular as ever heading into the holiday season;
- Advanced Micro Devices projected higher fourth quarter revenue than market expectations when it released in Q3 results on Tuesday, betting on its ability to overcome a weak supply chain to meet strong demand for chips used in gaming consoles and data center servers;
- On the economic data front, October US consumer confidence came in at 113.8 versus 108.0 expected, while the Richmond Fed Manufacturing index rose to 12, beating expectations of 5. In housing, new home sales for September surpassed estimates by a decent margin;
- Data releases from Asia continued to support the inflationary narrative amid rising commodity prices as we saw a +16.3% year-on-year growth in China’s industrial profits in September, up from +10.1% a month earlier. Meanwhile, Australia’s trimmed mean CPI at +2.1% came in above expectations of +1.8%;
- The FDA’s vaccines advisory committee voted 17-0 to back jabs for kids aged 5-11. The dose for the younger cohort amounts to one third of the current one given to those over the age of 12, which means that it could be more quickly distributed if the demand is there.
The summary as at 26.10.21
Major equity indices marched higher yesterday, with the small cap Russell 2000 and Nasdaq Composite both outperforming the S&P 500. Meanwhile European equities were almost unchanged.
- Overnight in Asia, the Nikkei 225 and the Kospi are outperforming the Hang Seng and Shanghai Composite. The sentiment in China is being clouded by the news of another developer, Modern Land China, missing a payment on a $250 million dollar bond;
- Stock futures on both sides of the Atlantic were mildly higher in early morning trading on Tuesday;
- Crude oil futures put in a mixed performance. Multiple OPEC+ members signaled they won’t increase supply at their upcoming meeting leading to gains in crude, yet the gains were short lived, as headlines noted Iran and the EU will stage talks to restore the 2015 nuclear deal, paving a way for Iranian oil supply to return to the market;
- Tesla shares rallied by more than 12% yesterday to top $1 trillion market cap after rental car company Hertz announced that it would order 100,000 Tesla vehicles and Morgan Stanley hiked its price target on the shares to $1,200;
- Facebook shares were up more than 1% after the closing bell after the company beat on earnings but missed on revenue and monthly active users;
- UBS posted a 9% rise in third quarter net profit on Tuesday, due to growth in net interest and fee and commission income and a reduction in expenses;
- In geopolitics, China’s Vice Premier Liu He and US Treasury Secretary Janet Yellen held a call about trade and economic concerns;
- Children as young as 3 will start receiving Covid-19 vaccines in China, where 76% of the population has been fully vaccinated and authorities are maintaining a zero-tolerance policy toward outbreaks.
The summary as at 25.10.21
US equities remained resilient with the S&P 500 posting a 7th consecutive advance to hit an all-time high for the US equity markets closed last week in positive territory with gains of over 1%. The Dow Jones closed higher on Friday, reaching a new high while the S&P 500 and Nasdaq both had a negative end of week session.
- Asia equities were mixed overnight with the Nikkei trading lower while Chinese and Korean equities are flat;
- US and European equity futures are relatively flat;
- West Texas Intermediary crude continued its upward momentum to trade above $84 a barrel on Monday, a new 7-year high as concerns over the supply in the US outweighed the easing of energy crises;
- HSBC Holdings reported a surprise 74% rise in third quarter profit as concerns about pandemic-related bad loan receded, allowing it to announce a share buyback of $2 billion;
- Italy on Sunday ended talks with UniCredit over the sale of Monte dei Paschi di Siena in a major setback to years-long efforts by the Rome government to return the ailing Tuscan bank to private hands;
- Shares in China Evergrande Group were up on Monday after the embattled property developer announced plans to prioritise growth of its electric vehicles business over its core real estate operations;
- On Friday, Fed Chair Jerome Power mentioned that inflation could stay high for longer. He further added that, although the Fed will start its tapering process, rate hikes will not occur soon;
- Turkish President Tayyip Erdogan ordered the expulsion of 10 foreign ambassadors over the weekend who called for the release of a jailed philanthropist, including US, French and German diplomats;
- Key data releases to watch this week include Q3 GDP in the US on Thursday and Europe on Friday, as well as October’s preliminary inflation figures and economic confidence survey results in the Eurozone.
The summary as at 26.10.21
The summary as at 22.10.21
US equities remained resilient with the S&P 500 posting a 7th consecutive advance to hit an all-time high for the first time in 7 weeks. Other indices forged ahead too, with the Nasdaq moving to just -1.04% beneath its own all-time record. In Europe the major indices were weaker with the Stoxx 600 retreating ever so slightly, but it still remains only -1.
- Asian markets have followed the US higher, with all regional major indexes in the green;
- Equity futures are pointing to a somewhat slower start in the US while European markets are seen heading in the opposite direction;
- Oil prices resumed their climb on Friday on continued tightness in US supply, but were headed for a flat finish of the week as coal and gas eased, curbing fuel-switching which had stoked demand for oil products for power;
- Reports in Chinese media said that Evergrande has avoided a default by making an $83.5mn interest payment on a bond whose 30-day grace period was going to end this weekend;
- Shares of Snap plummeted 25% in after-hours on trading after it announced that privacy changes implemented by Apple on iOS devices hurt the company’s ability to target and measure its digital advertising. The announcement had a knock-on effect on other media companies such as Facebook, Twitter and Alphabet;
- Similarly shares of Intel sank on Thursday as the company reported third-quarter sales that missed expectations, with the CEO saying that shortages of ancillary chips needed to make full computers are holding back sales of the company’s flagship processor chips;
- L’Oreal posted a 14% yoy increase in its third-quarter sales, with all zones and divisions contributing to the group’s growth. The company reported that in-store sales have rebounded, while e-commerce continues to rise sharply, accounting for 26.2% of sales;
- The main data releases today will be the flash PMIs from around the world, which will give us an initial indication of how various economies have fared through the start of Q4.
The summary as at 21.10.21
Another day of positive earnings has now put the S&P 500 just a whisker below early September’s record high. This has come even as investors have become increasingly sceptical about the transitory inflation narrative, as well as fresh sings that Covid-19 might be a serious issue once again this winter.
- Overnight in Asia, stocks are trading higher this morning with the Shanghai Composite, CSI and Kospi all advancing, whilst the Hang Seng and the Nikkei have been dragged lower by healthcare and IT respectively;
- Futures markets are indicating a slow start for markets in the US and Europe;
- Oil prices rose on Thursday to extend gains from the previous session as US crude and fuel inventories tightened further, with supplies of gasoline hitting a two-year low, pointing to strong demand;
- PayPal has offered $70 per share or $45bn to buy Pinterest, mostly in stock. The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on Nov 8;
- After the close yesterday, Tesla fell short of revenue estimates but beat on earnings, despite materials shortages and port backlogs that have prevented production from reaching full capacity;
- Barclays reported better than expected third quarter earnings this morning on strong investment banking performance;
- China Evergrande ended talks on the sale of a majority stake in its property services division to Hopson Development stating that “the purchaser had not met the prerequisite to make a general offer for the shares.” It added that it had made no material progress on asset sales and that there is no guarantee it will be able to meet its financial obligations;
- The UK inflation data for September came in slightly beneath expectations yesterday at 3.1% whilst core CPI also fell to 2.9%;
- Bundesbank president Weidmann will be stepping down on December 31, leaving his position after just over a decade;
- Bitcoin hit an all-time high yesterday, with the cryptocurrency up +2.92% to close at a record $65,996, which was slightly down from its intraday peak of $66,976.
The summary as at 20.10.21
Whilst inflation concerns are still very much bubbling under the surface of markets, risk appetite strengthened further yesterday thanks in no small part to decent earnings reports. The S&P 500 advanced for a 5th consecutive session to leave the index just 0.38% beneath all-time closing high from early September. Earlier Europe’s Stoxx 600 also moved higher.
- Asian markets tracked Wall Street’s advance, with most major indexes posting solid gains early Wednesday;
- Futures on both sides of the Atlantic are pointing to a cautious open following some hawkish comments from a Fed official;
- Oil prices were lower this morning after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage;
- Federal Reserve Governor Christopher Waller cautioned the central bank could move forward the timeline for raising short-term interest rates to restore price stability if high levels of inflation don’t start cooling soon, adding that he supports the Fed slowing its asset buying stimulus effort starting next month;
- China Evergrande paid an onshore bond coupon due on Tuesday. The focus now turns towards the indebted developer paying the offshore coupon on its 8.25% 2022s that would officially be considered in ‘default’ if it does not make the coupon payment by October 23 when the 30-day grace period ends. Separately, peer Sunac paid coupons worth $27.14mn on its offshore bonds;
- US democrats accelerate efforts to strike a deal on their social-policy and climate legislation, as President Biden identified programs that party lawmakers could eliminate or slim down during a flurry of meetings at the White House on Tuesday;
- ASML this morning reported slightly better-than-expected third quarter net income of €1.7 billion amid strong demand for its products and a global semiconductor shortage;
- Netflix reported solid Q3 results with net profits of $1.45bn, almost double that registered in Q3 2020. Revenues stood at $7.5bn, up 16% yoy and it projects another 16% yoy growth for the next quarter. The quarter’s subscriber growth was at 4.4mn, a strong beat over analysts’ expectations of 3.8mn. Among the positives, Netflix said that ‘Squid Game’ has become their biggest TV show ever;
- The International Monetary Fund has downgraded its 2021 economic growth forecast for Asia. The IMF now expects Asia’s economy to grow by 6.5%, in 2021 compared with its previous forecast of a 7.6% expansion. Despite the downgrade, Asia would remain the fastest growing region globally this year, according to the fund.
- Shares of the first US bitcoin-linked ETF, ticker “BITO,” jumped 4.8% in their trading debut Tuesday.
The summary as at 19.10.21
Prospects of faster rate hikes put a dampener on equities yesterday, especially earlier in the day, though the S&P recovered to close just –1.13% beneath its all-time closing high from early September. It was a different story in Europe however, where the Euro Stoxx 600 fell –0.50% in line with the losses elsewhere on the continent.
- Major bourses in Asia followed Wall Street higher overnight, as traders shrugged off weak data and inflation concerns and shifted their focus to earnings reports;
- Outside of Asia, futures on both sides of the Atlantic are pointing towards modest gains at the open;
- Oil prices fell on Tuesday, with Brent down a second straight day, after Chinese data sowed slowing economic growth and US factory output dropped in September, raising fresh concerns about demand;
- Industrial production in the US fell 1.3% in September, following a revised 0.1% contraction in August and missing market expectations of 0.2% growth. This was partly due to the continuing effects of Hurricane Ida, which contributed around 0.6% of the overall drop in production, but the contraction also reflected supply-chain issues;
- Alibaba launched a new chip on Tuesday designed for servers as it looks to boost its cloud computing business and compete against US rivals like Amazon;
- Bitcoin increased +3.3% yesterday and is up another +1.9% this morning, bringing it within 1.5% of its all-time closing high back in April. The cryptocurrency has rallied in recent weeks as news picked up that the first US bitcoin ETF would be approved. Later today, the ProShares ETF is expected to start trading, offering US retail investors a new avenue to trade the world’s largest cryptocurrency.
The summary as at 18.10.21
The S&P 500 registered its best week since July last week on the back of decent earnings and is now less than –1.5% off its record high from early September. The Index rose +1.82% higher for the week while the Stoxx 600 in Europe gained +2.65%. Interest rate sensitive sectors were among the outperformers on both sides of the Atlantic.
- Overnight in Asia stocks were mostly lower as investors reacted to the release of key Chinese economic data;
- US and European stock index futures were little changed this morning;
- Oil prices hit their highest in years on Monday as demand continues to recover and power generators are shifting from expensive gas and coal, to fuel oil and diesel;
- The Chinese economy advanced +4.9% yoy in Q3 of 2021, easing sharply from a +7.9% growth in Q2 but just a touch below consensus of 5.0%. Industrial production for September also came in beneath expectations with a +3.1% yoy expansion (vs. +3.8% expected), though retail sales outperformed in the same month with a +4.4% yoy growth (vs. +3.5% expected);
- China’s state-owned developer Yuexiu Property pulled out of a $1.7bn deal to buy Evergrande’s Hong Kong headquarters due to concerns over the latter’s dire financial situation. Yuexiu was close to sealing the deal in August but Yuexiu’s board opposed the move over worries that Evergrande’s unresolved indebtedness would create potential complications;
- Separately, Hong Kong’s audit regulator is investigating Evergrande’s accounts for the full year of 2020 and 1H2021. They will also investigate the audit carried out by PwC on Evergrande’s 2020 annual accounts since it made no reference to its ‘going concerns’ material uncertainties;
- In the UK, the Bank of England Governor Bailey was very explicit yesterday about a rate hike coming soon, saying that inflation was expected to last longer and get into the annual numbers for longer as a consequence. He said that’s the reason why the Bank of England has signaled that it will have to act soon;
- In Germany, formal coalition negotiations are set to commence soon between the SPD, the Greens and the FDP. They reached an agreement on Friday with some preliminary policies that will form the basis for talks, including the maintenance of the constitutional debt brake, a pledge not to raise taxes or impose new ones, along with an increase in the minimum wage to €12 per hour. The Green Party voted in favour of entering the formal negotiations over the weekend, with the SPD agreeing on Fiday, and the FDP is expected to approve the talks today.
The summary as at 15.10.21
Yesterday was a strong day in the markets with the S&P 500 moving back to within 2.2% of its all-time closing high from last month. This came about thanks to decent corporate earnings releases, a mini-collapse in real yields, positive data on US jobless claims, as well as a further fall in global Covid-19 cases that leaves them on track for an 8th consecutive weekly decline.
- Optimism has fed through into the Asian markets overnight, with the Nikkei, Hang Seng, Shanghai Comp and the Kospi all moving higher. That came as Bloomberg reported that China would loosen restrictions on home loans amidst the concerns about Evergrande;
- Equity futures are pointing to further advances in the US and Europe later today;
- Oil prices climbed on Friday, heading for gains of more than 2% for the week, on increasing signs of tight supply over the next few months as rocketing gas and coal prices stoke a switch to oil products;
- US Weekly initial jobless claims came in much better than expected for the week ending October 9, falling to a post-pandemic low of 293k. This contrasts with last week’s underwhelming jobs report that showed the slowest growth in nonfarm payrolls so far this year;
- A number of US banks including Wells Fargo, Citigroup and Bank of America reported their quarterly results yesterday, all of whom beat analyst estimates. In fact, out of the nine S&P 500 firms to report yesterday, eight outperformed analyst expectations;
- Microsoft announced Thursday it will shut down its local version of LinkedIn in China as the country continues to expand its censorship of the internet. LinkedIn was the last major US social network still operating in China as website like Twitter and Facebook have been blocked for more than a decade in the country, while Google decided to shutter operations in 2010.
The summary as at 14.10.21
The S&P 500 snapped a 3-day losing streak on Wednesday boosted by gains in tech shares as yields moved lower. European indexes posted a more solid performance than the US, though the sectoral balance was similar, with tech stocks outperforming while banks fell back from their 2-year high the previous session.
- Overnight in Asia, equities have put in a mixed performance, with the Kospi and the Nikkei moving higher while the Shanghai Composite and CSI have lost ground;
- Equity markets in both the US and in Europe are pointing to a positive start at the opening;
- Oil prices rose on Thursday, reversing previous losses, on expectations that high natural gas prices, as winter approaches, may drive a switch to oil to meet heating demand needs;
- Headline US consumer prices were up by +0.4% on a monthly basis in September above the median estimate of +0.3%, though core prices were in line with consensus of +0.2% mom. There were a number of drivers behind the faster pace, including rising food inflation and housing-related prices;
- Federal Reserve policymakers agreed that tapering emergency pandemic support should start either mid-November or mid-December, according to the minutes from the latest FOMC meeting. Officials stressed that if the economic recovery remained broadly on track, a gradual tapering process that would run around the middle of next year would likely be appropriate;
- China’s producer price inflation hit its highest in nearly 26 years, at +10.7% (vs. +10.5% expected), driven mostly by higher coal prices and energy-sensitive categories. On the other hand, the CPI measure for September came in slightly below consensus at +0.7%, indicating that higher factory gate prices have not yet translated into consumer prices;
- The Turkish lira traded at a record low against the US dollar, after Turkey’s President Erdogan dismissed three cental bank monetary policy committee members on Thursday. The currency has weakened about 19% so far this year, amid concerns about monetary policy credibility;
- JPMorgan kicked-off the US bank earnings season with strong Q3 results. It reported an increase in net income of 25% yoy and an EPS of £3.74/shares vs. Estimates of $3/share. Profits were helped by a net benefit of $1.5bn from better loan-losses. Nonetheless, the shares sold off as loan growth was muted;
- BlackRock reported higher-than-expected results for the third quarter even as outflows picked up, driven by low-fee cash management and advisory assets under management;
- Delta Air Lines also sold off along with other US airlines as they warned that rising fuel costs would threaten earnings over the current quarter.
The summary as at 13.10.21
Equity markets struggled for direction yesterday as they awaited the publication of inflation data and the start of the US Q3 earning season, both scheduled for later today. By the close of trade, the major US indexes had posted modest losses as they awaited the next catalyst.
- Overnight in Asia, equity markets are seeing a mixed performance with the Kospi posted decent gains, whereas the CSI, Nikkei and Shanghai Composite have all lost ground;
- US and European equity futures are pointing to little change later on;
- Oil prices dropped on Wednesday after a mixed finish in the previous session, amid worries that soaring coal and natural gas prices in China, India and Europe will stoke inflation and slow global growth, reducing oil demand;
- Exports from China soared 28.1% annually in September, beating market estimates of 21% and accelerating from a 25.6% rise in August, as solid global demand offset some of the pressure on factories form power shortages and a resurgence of domestic Covid-19 cases. Imports increased 17.6%, lagging an expected 20% and compared with 33.1% growth the previous month;
- Tesla sold 56,006 China-made vehicles in September, the highest since it started production in Shanghai about two years ago;
- Apple is expected to cut its iPhone production goals for 2021 by as much as 10 million units due to continued chip shortage issues. The iPhone maker was planning to manufacture 90 million iPhone units between October and December;
- LVMH on Tuesday reported a 46% yearly increase in its revenue for the first nine months of 2021 driven by Asia and the US;
- American Airlines estimated on Tuesday a smaller-than-expected loss for the third quarter and signaled improved bookings for the rest of the year, betting on increased holiday demand and a lifting of travel bans;
- Atlanta Fed President Bostic sounded a cautious note on inflation yesterday, stating that price pressures were expanding beyond the pandemic-impacted sectors, and measures of inflation expectations were creeping higher;
- The IMF yesterday downgraded their global growth forecast for this year, now seeing +5.9% growth in 2021 (vs. +6.0% in July), whilst their 2022 forecast was maintained at +4.9%. On inflation they said that risks were skewed to the upside, and upgraded their forecasts for the advanced economies to +2.8% in 2021, and to +2.3% in 2022;
- The most important data today with be the release of the CPI number in the US which comes 3 weeks ahead of the next Fed policy decision, where investors are awaiting a potential announcement on tapering asset purchases. This report might not be the most interesting since it may be a bit backward looking given oil prices are up over 7% in October alone.
The summary as at 12.10.21
Wall Street’s main indexes closed at session lows on Monday on thin trading, with the S&P 500 retreating 0.7% as a rally in some commodity prices such as oil, coal and aluminum rekindled fears of persistent inflation and concerns over a global slowdown. Meanwhile European equities remained largely muted, searching for direction after a volatile week.
- Overnight in Asia, markets are trading in the red with major indexes from China to South Korea falling at least 1% on inflation concerns due to high energy costs and aggravated by a Wall Street Journal story that Chinese President Xi Jinping is increasing scrutiny of state-run banks and big financial institutions with inspections;
- Oil prices hovered towards the flat line this morning, taking a breather after weeks of gains fueled by a rebound in global demand that is contributing to energy shortages in economies from Europe to Asia;
- Futures on both sides of Atlantic are pointing to a lower open later today;
- The Evergrande debt situation continued to worsen with the firm missing coupon payments yesterday on two of its dollar bonds. Similarly, in a sign of broader contagion, Sinic Holdings said it doesn’t expect to pay the principal or interest on a $250mn bond due on October 18;
- ASOS announced on Monday that CEO Nick Beighton would step down with immediate effect after the company issued a profit warning on the back of higher logistics costs and supply chain disruption;
- Merck on Monday applied for US emergency use authorisation for its tablet to treat mild-to moderate patients of Covid-19, putting it on course to become the first oral antiviral medication for the disease;
- Jamie Dimon, JPMorgan Chase chief executive said on Monday at a conference that cryptocurrencies will be regulated by governments and that he personally thinks bitcoin is “worthless.” Meanwhile the currency is up around 100% since the start of the year and over 30% over the past month.
The summary as at 11.10.21
Wall Street edged lower on Friday after the latest labour market data reinforced views that the US economic recovery is uneven and far from complete. Still, US indices booked weekly gains as Washington reached a deal to raise the debt ceiling into December and worries over a spike in inflation prompted by soaring energy prices eased. The S&P 500 climbed 0.8% for the week, for its best week since August.
- Markets in Asia have started the week on a strong note, with equity indices including the Hang Seng, Nikkei, CSI and Shanghai Composite all moving higher, whilst the Kospi has seen a slight decline;
- Unlike in Asia, equity futures are pointing lower in the US and Europe this morning. A reminder that it’s Columbus Day today in the US where bond markets are closed and equity markets are open but expect it to be quiet;
- Oil prices rose on Monday, extending multiweek gains, amid supply restraint from major producers and growing demand for fuels;
- Shares of Chinese food delivery giant Meituan surged 9.9% in Hong Kong this morning after China’s market regulator on Friday said it had fined the company about $527.71mn for finding it guilty of monopolistic practices. Still, that was far smaller than the $2.8bn fine that Alibaba had been slapped with back in April;
- The top 100 Chinese real estate developers saw overall contracted sales sink 36% yoy to $118bn in September with 60% of the developers seeing a massive drop in sales of over 30%;
- Dollar bonds of Chinese developer Modern Land lost half of their value after the company sought consent to extend the maturity date of its $250mn 12.85% bonds due October 25 by three months to avoid potential default;
- Meanwhile offshore bondholders of beleaguered developer China Evergrande Group were on Monday bracing for news on more than $148mn in looming bond coupon payments after the company missed two coupon deadlines last month;
- The world’s largest PC maker Lenovo Group withdrew its application to list $1.55bn shares on Shanghai’s Star Market just eight days after the company was accepted by the exchange. Its shares fell more than 17% on Monday;
- The US economy added 194k jobs last month, the least this year and well below forecasts of 500k while the unemployment rate declined to 4.8% and average hourly earnings edged up. Nonfarm employment is down 5.0mn or 3.3% from its pre-pandemic level in February 2020;
- Goldman Sachs cuts its US economic growth target to 5.6% for 2021 and to 4% for 2022 citing an expected decline in fiscal support through the end of next year and a more delayed recovery in consumer spending than previously expected;
- The third quarter earnings season gets underway this week, with updates expected from major US banks such as JPMorgan Chase, Citigroup and Wells Fargo. We will also have the minutes from the last FOMC meeting while data releases include US and China inflation data, US retail sales and Eurozone industrial output.
The summary as at 08.10.21
Markets continued to rebound yesterday, thanks to the near-term resolution on the US debt ceiling, alongside subsiding gas prices, which took the sting out of two of the most prominent risks for investors over the last couple of weeks. That provided a significant boost to risk appetite, and by the close of trade, the S&P 500 had recovered +0.8% in its 3rd consecutive move higher, which puts it back to just -3.0% beneath its all-time high in early September, whilst Europe’s Stoxx 600 was also up +1.6% and closed before a later US sell-off.
- Overnight in Asia, all markets are trading in the green with the Nikkei leading the way. Chinese markets reopened after a week-long holiday;
- Looking forward, the S&P 500 futures are pointing to a small move higher while European markets are heading for a slightly lower open;
- Oil crude futures climbed 1.3% to $79.3 a barrel on Friday, ahead for a 4.7% gain for the week after reports that the US has current plans to tap the nation’s oil reserves to help quell rising gasoline prices;
- The Caixin China General Services PMI jumped to 53.4 in September 2021 from 46.7 in the prior month, moving away from the lowest level seen since the height of the pandemic last year;
- US Senate leaders reached an agreement to temporarily extend the debt ceiling till early December and prevent a US government default. The Senate voted 50-48 with no Republicans blocking the legislation to increase the debt limit by $480bn, with the measure now expected to be approved in the House on Tuesday;
- Ireland dropped its opposition to an overhaul of global corporate tax rules on Thursday, agreeing to give up its prized 12.5% tax for large multinationals in a major boost to efforts to impose a minimum rate worldwide;
- In Germany, reports are saying that CDU leader Armin Laschet had signaled his willingness to stand down. In televised remarks last night, Laschet said that his party needs fresh voices across the board and that new leadership will be in place soon;
- Samsung Electronics on Friday flagged a 28% jump in its third-quarter operating profit to the highest in three years, although still slightly below expectations, driven by rising memory chip prices and display sales for new flagship smartphone launches;
- Attention will today focus on the US jobs report which is the last one before the Fed’s next decision in early November, where a potential tapering announcement is likely.
The summary as at 07.10.21
It was a wild session for markets yesterday, with multiple asset classes swinging between gains and losses as investors sought to grapple with the extent of inflationary pressures and potential shock to growth. However, US equities closed out in positive territory and at the highs as the news on the debt ceiling became more positive after Europe went home. The S&P 500 rallied to finish +0.41% and is now slightly up on the week.
- Major bourses in Asia traded considerably higher overnight following the late recovery of Wall Street;
- US stock futures rose sharply on Thursday while European markets are also expected to bounce back at the open;
- WTI crude futures retreated nearly 1% to $76.7 on Thursday, falling for the second session after prices rallied to a near 7-year high of $79.8 early Wednesday. Growing inventory stock levels and growth concerns weighed on the commodity;
- US Senate Minority Leader Mitch McConnell is said to be willing to negotiate with Democrats to resolve the debt ceiling impasse and allow Democrats to raise the ceiling until December. This means Congressional Democrats would be able to finish their fiscal spending package – now estimated at around $1.9-2.2 trillion – and include a further debt ceiling raise into one large reconciliation package near year-end;
- Washington and Beijing have agreed in principle for their presidents to hold a virtual meeting before the end of the year. Early speculation had been that the two leaders might meet in person at the G20 summit in Italy in October;
- Russian President Putin announced that his country was set to supply more gas to Europe and help stabilise energy markets after UK and European natural gas futures both surged around +40% to reach an intraday high shortly after the market open yesterday;
- The ECB is said to be studying a new bond buying plan to replace its €1.85tn Pandemic Emergency Purchase Programme (PEPP) that would get phased out in March next year. The plan would complement its older €20bn/month quantitative easing programme (QE) and help act as an insurance measure in case the PEPP withdrawal causes a strong selloff in more highly indebted countries’ bonds;
- In Germany, exploratory talks will be commencing today between the centre-left SPD, the Greens and the Liberal FDP, who together would make up a so-called “traffic-light” coalition;
- Looking at yesterday’s data, in the US the ADP report showed that private companies hired at a faster clip than expected last month which augurs well for tomorrow’s US jobs report.
The summary as at 06.10.21
Tech led the sell-off on both sides of the Atlantic yesterday with the Nasdaq down –2.1% and Europe’s Stoxx Technology index falling by -2.4%. Meanwhile, the S&P 500 shed another –1.3%, with the index now down -5.21% from its all-time closing high back in early September. The current selloff looks to be coming from a generalised set of concerns, with those worries given a fresh impetus by yet another rise in energy prices yesterday as oil hit multi-year highs. In turn, that let to renewed fears about inflation accelerating even further than current forecasts are implying.
- Overnight in Asia, most markets continued to slide with the Nikkei, Kospi, Hang Seng and Australia’s Asx all moving lower on the back of higher energy prices and inflation concerns;
- US futures are pointing to further declines later today while European markets are expected to open sharply lower;
- WTI crude futures were almost flat, trading around $78.8 a barrel on Wednesday which was not far from the highest level since November 2014, as traders digested reports that Saudi Aramco today cut nearly all of its November official selling prices for Asia, the Mediterranean, European and US cargoes;
- The Reserve Bank of New Zealand joined the club of central banks raising rates, hiking by 25bps in a move that was the first rate rise in seven years, as they also indicated more hikes might be warranted;
- The IMF cut the global economic forecast to slightly below 6% this year, amid risks from inflation and divergent economic trends;
- In the US, the ISM Services PMI edged up to 61.9 in September from 61.7 in August, beating forecast of 60, and pointing to a robust growth in the services sector, although the ongoing challenges with labour resources, logistics, and materials are affecting the continuity of supply;
- In the UK, gas prices were up +19.5% yesterday, marking the biggest daily percentage increase in over a year and a +183.3% move since the start of August. Benchmark European gas natural futures weren’t much different and were up by +20.0%;
- Merck announced a supply and purchase deal that will provide Singapore with access to its experimental oral Covid-19 drug.
The summary as at 05.10.21
Tech led the sell-off on both sides of the Atlantic yesterday with the Nasdaq down –2.1% and Europe’s Stoxx Technology index falling by -2.4%. Meanwhile, the S&P 500 shed another –1.3%, with the index now down -5.21% from its all-time closing high back in early September. The current selloff looks to be coming from a generalised set of concerns, with those worries given a fresh impetus by yet another rise in energy prices yesterday as oil hit multi-year highs. In turn, that let to renewed fears about inflation accelerating even further than current forecasts are implying.
- Overnight in Asia, equities have mostly followed the US lower, with the Nikkei, Kospi, and Australia’s Asx 200 all losing ground, though the Hang Seng has recovered slightly thanks to energy stocks. Those declines for the Nikkei and the Kospi leave them just shy of a 10% correction from their recent peaks;
- Risk is seen stabilising this morning with both US and European equity futures marginally higher;
- Oil prices continued their ascend this morning, hitting their highest level in at least three years. This follows the decision by OPEC+ on Monday to stick with its planned 400,000 bpd increase in crude output quote for November, despite pressure from some countries to add more oil to stabilise prices. OPEC+ agreed in July to raise output by 400,000 bpd each month until at least April 2022;
- The Reserve Bank of Australia kept the cash rate unchanged at a record low of 0.1% during its October meeting, while continuing its plans to trim the purchase of government bonds to A$4 billion a week until at least mid-February 2022;
- Facebook was one of the bigger laggards yesterday as it fell –4.9% – its worst day since November 2020 after a widespread user outage. The company is currently also dealing with whistleblower allegations that their internal research doesn’t match what executives have been saying about the effect the social media company has on its users;
- There are signs that risks are spreading to other property developers in China, as another local property developer, Fantasia Holdings missed a repayment worth $205.7 million on a bond that matured on Monday;
- During a press conference yesterday, President Biden called on Republicans to join with Democrats to raise the debt limit, arguing that over a quarter of the US debt was accumulated during the Trump administration and that it should not be tied to any new spending being considered;
- President Biden also meet with progressive House Democrats yesterday to discuss the budget reconciliation package and about potentially limiting the scope of the bill that makes up much of the President’s economic agenda. Initial estimates could see the final package closer to $2 trillion over 10 years versus the current $3.5 trillion plans.
The summary as at 04.10.21
Wall Street rallied on the first trading day of October boosted by favourable economic data, a potential oral treatment against Covid-19 and optimism over the passage of an infrastructure bill. For the week however, all the three main indexes posted losses with the S&P 500 and the Nasdaq posting their biggest weekly percentage drop since February. In Europe, markets closed lower on Friday as fears of rising inflation and the need for tighter monetary policy, at a time when the economies are still fragile, continue to hit sentiment.
- Markets have started the week with a risk-off tone, with Asian equities including the Hang Seng and the Nikkei both moving lower while markets in China and South Korea remain closed. The ASX jumped over 1%, as traders await interest rate decisions by the RBA on Tuesday;
- US equity futures are pointing lower this morning while European markets are expected to open broadly in positive territory;
- Oil fell on Monday ahead of an OPEC+ supply policy meeting that may decide whether a recent rally in prices can be sustained;
- Hopson Development plans to acquire a 51% stake in Evergrande Property Services for over $5.1bn according to Chinese media, after both Evergrande and Hopson requested trading halts ahead of a major transaction. Evergrande’s Property Services unit has a market cap of $7bn;
- Asian media reported this morning that Japan’s incoming Prime Minister, Fumio Kishida planned to hold a general election on October 31;
- Preliminary data on Friday showed the Eurozone consumer price inflation soared to a 13-year high of 3.4% in September, after ECB President Lagarde said earlier in the week that there are no signs that recent price increases are becoming broad-based across the economy;
- US ISM Manufacturing PMI came at 61.1 on Friday, beating expectations of 59.6, with the prices paid component soaring to 81.2 after a slight dip last month to 79.4 and beating forecasts of 78.5, suggesting inflationary pressures;
- Clayton, Dubilier & Rice won the auction by the UK’s Takeover Panel for Wm Morrison Supermarkets with an offer of $9.5bn;
- Merck shares jumped on Friday after the company said its experimental coronavirus pill reduces the risk of death and hospitalisation by 50%;
- All eyes will turn to the US employment report this week, which will probably show job growth accelerated in September, as well as worldwide services PMI surveys and an OPEC+ meeting that is expected to offer guidance into the coalition’s production plans;
The summary as at 01.10.21
Markets wrapped up the quarter in a notable risk-off manner as they awaited fiscal developments in the United States, with the S&P having now lost just over –5% since its closing peak back on September 2. US equities lost ground later in the session, with the S&P 500 down –1.19% as part of a broad-based decline, though Europe’s Stoxx 600 managed a smaller –0.05% loss.
- Overnight in Asia, most equity markets have begun the new quarter on a negative note, with the Nikkei and Kospi declining just as China starts a week-long holiday;
- Looking forward, equity futures are pointing to further declines as we start Q4 today;
- Oil prices dropped on Friday on the prospect that the OPEC+ supplier alliance might step up a planned increase in output to ease supply concerns, with soaring gas prices spurring power producers to switch from gas to oil;
- China’s state-owned energy companies have been ordered to secure supplies for the winter by the central government so as to ease a power crisis as the country faces a shortage of coal to generate electricity, and regional authorities are under increased pressure to comply with central government’s call to reduce carbon emissions;
- In the US Q2 GDP was revised 0.1% higher to +6.7%, while in the UK this was also revised higher to show +5.5% growth rather than the +4.8% original estimate;
- Both houses of US Congress passed a short-term funding bill to avoid a federal government shutdown on Thursday hours before the midnight deadline;
- BMW lifted its annual profit margin forecast to between 9.5% to 10.5% from 7% to 9%, as higher prices for new and used vehicles outweigh the effect of supply-chain issues;
- Shares of Bed, Bath and Beyond dipped by –22.18% yesterday as the company’s adjusted Q2 EPS came in at $0.04 vs $0.52 expected and they revised 2022 EPS estimates to $0.70-$1.10 per share, from its June forecast of $1.40-$1.55 per share. Management cited “unprecedented supply chain challenges” that have been impacting the whole industry and steeper cost inflation outpacing their plans to offset those particular headwinds;
- Japan and Australia made progress in their reopening strategy with Japan coming completely out of the state of emergency while Australia brought forward the lift-off on international travel to November.
The summary as at 30.09.21
Risk assets made a tentative recovery yesterday, with the S&P 500 up +0.16% and Europe’s Stoxx 600 up +0.59%. However, unless we get a big surge in either index today, both indices remain on track for their worst monthly performance so far this year.
- Overnight in Asia, equities have seen a mixed performance, with the Nikkei, and the Hang Seng both losing ground, whereas the Kospi and the Shanghai Composite have posted gains;
- Futures on the S&P 500 and those on European indices are pointing to a higher start later on, as markets continue to stabilise after their slump earlier in the week;
- Oil prices fell on Thursday, extending losses after official figures showed an unexpected rise in inventories in the US although prices seem to have stabilised following a recent run of gains;
- The US dollar continued its climb yesterday, with the dollar index increasing +0.61% to close at its highest level in over a year, exceeding its closing high from last November;
- Over in sovereign bond markets, the partial rebound saw yields on 10-year Treasuries down –2.1bps at 1.517%, marking their first move lower in a week;
- The September PMI data from China came out weaker than expected, with the manufacturing PMI falling to 49.6 (vs. 50.0 expected), marking its lowest level since the height of the Covid crisis. The non-manufacturing PMI held up better however, at a stronger 53.2 (vs. 49.8 expected);
- Central bankers were in no mood to panic yesterday as we saw Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda all appear on a policy panel at the ECB’s forum on central banking. The central bank heads all maintained that this current inflation spike will relent with Powell saying that it was “really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy – which is a process that will have a beginning, a middle and an end”;
- US lawmakers passed a bill to suspend the debt ceiling yesterday. The bill will now be voted upon in the Senate later today, where Republicans are expected to vote against it. The latter have opposed any effort to raise the borrowing limit and appear intent on making Democrats address it as part of their sprawling investment in social programs and climate policy;
- Former Japanese foreign minister Fumio Kishida was elected as leader of the governing Liberal Democratic Party, and is set to become the country’s next Prime Minister.
The summary as at 29.09.21
US markets sold-off sharply yesterday with the S&P and Nasdaq ending -2% and -2.8% lower, the largest fall in over four months. US 10-year Treasury yields saw another leg higher, up 3bps to 1.53% as market participants attribute the move to inflation fear. European stocks also saw sharp declines with the DAX down -2.1%, CAC down -2.2% and FTSE down -0.5%.
- The negative sentiment continued this morning in Asia, where the Kospi, Nikkei, Hang Seng and the Shanghai Comp are all trading lower;
- US stock futures are pointing to some stabilisation later while European markets are seen heading for a mixed open;
- Oil prices extended losses on Wednesday amid renewed concerns over the global recovery from the pandemic after both Goldman Sachs and Nomura revised down projections for Chinese economic growth for this year;
- Fed Chair Powell and his predecessor Treasury Secretary Yellen appeared jointly before the Senate Banking Committee yesterday. The most notable moment was when Senator Warren criticized Chair Powell for his track record on regulation, saying he was a “dangerous man” and then saying on the record that she would not support his re-nomination. Both Yellen and Powell maintained their stances that the current high level of inflation was temporary;
- Elsewhere, ECB President Lagarde warned against withdrawing stimulus too rapidly as a response to inflationary pressures. She contested that there are “no signs that this increase in inflation is becoming broad-based across the economy,” and continued that the “key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term”;
- US consumer confidence dropped for a third consecutive month to a seven-month low of 109.3 in September from 115.2 in August and lower than economic expectations of 115;
- Reuters sources reported that China has asked state-backed firms to buy some of Evergrande’s assets with the central government being unlikely to directly intervene with a bailout. Meanwhile, the company announced that it will be selling its stake in a regional bank at $1.55bn as a step to resolve its debt crisis while overnight Fitch Ratings downgraded Evergrande to C from CC;
- Brazilian state-owned oil major Petroleo Brasileiro has been upgraded to Ba1 from Ba2 by Moody’s given the company’s strong operating and financial performance coupled with solid credit metrics.
The summary as at 28.09.21
Interest-sensitive growth stocks struggled yesterday while cyclicals broadly posted fresh gains on the back of higher yields and growing inflationary pressures. The Nasdaq underperformed the S&P 500, which was down only –0.28%. European equities were also pretty subdued, with the Stoxx 600 down –0.19%, though the Dax was up +0.27% following the results of the German election.
- Overnight in Asia, equity indices are seeing a mixed performance. On the one hand, most of the region including the Nikkei and Kospi are trading lower as investors begin to price in tighter monetary policy form the Fed. However, the Hang Send, Shanghai Comp and CSI have all advanced after the People’s Bank of China (PBoC) said that they would ensure a “healthy property market”;
- US equity futures are pointing to little change while Europe is heading for a positive open;
- Oil markets rose on Tuesday, reversing earlier losses and extending their rally into a sixth session, amid continued concerns over tight supply at a time when demand is picking up with the easing of restrictions;
- US Sovereign bond yields moved higher once again yesterday amid a sharp rise in inflation expectations, with those on 10-year Treasury rising to 1.487%, their highest level in over 3 months. Meanwhile the 2-year yield rose to 0.278%, its highest level since the pandemic began, which comes on the back of last week’s Fed meeting that prompted investors to price in an initial rate hike from the Fed by the end of 2022;
- With less than 72 hours away from a potential US government shutdown, Republicans in the Senate blocked the House-passed measure to fund the government for another 2 months and raise the debt ceiling for 2 years. The Democrats only option is now to attach it to the budget reconciliation plan that currently makes up much of the Biden economic agenda;
- Goldman Sachs economists cut their forecast for China’s economic growth in 2021 from 8.2% to 7.8%, following similar moves by Nomura and Fitch;
- Durable goods orders jumped 1.8% in August beating expectations of 0.7%, showing signs of economic strength;
- Rolls-Royce agreed to sell its Spanish unit ITP Aero to a consortium led by Bain Capital for €1.7bn. The transaction will help Rolls-Royce meet it £2bn asset disposal target and comes just over a week after it announced a sale of its 23.1% stake in UK military refueling jet owner Air Tanker Holding for £189mn. Investor confidence in Rolls-Royce is likely to grow as the company announced on the same day that it beat competitors to win a contract worth $2.6bn to supply the US B-52 bombers with replacement engines.
The summary as at 27.09.21
Wall Street ended Friday’s session little changed, with the Dow Jones and the S&P 500 extending gains for the third day while the Nasdaq Composite closed virtually unchanged. In Europe shares mostly fell on Friday as investors booked some profits after a mid-week rally.
- Major bourses in Asia mainly traded in the green on Monday, amid reports that the PBoC today injected a total of CNY 100 billion into the banking system, adding to the net CNY 320 billion last week, the most since January;
- Stocks in China sank over 1% and traded at a near 1-month low, however, dragged down by PBoC’s move to ban cryptocurrencies and uncertainty surrounding China Evergrande;
- Meanwhile US stock futures are trading markedly higher on Monday while European equities are also set to rise, with German election results seen eliminating a key market risk for investors in the region;
- Oil prices jumped over 1% on Monday following the fifth straight gains last week, boosted by growing fuel demand and falling US crude inventories;
- In Germany, preliminary results on Monday morning showed the center-left Social Democratic Party gaining the largest share of the vote with 25.7%. Angela Merkel’s right-leaning bloc of the Christian Democratic Union and Christian Social Union was seen with 24.1% of the vote. That’s a bit narrower than the final polls had suggested but fits with the slight narrowing we’ve seen over the final week of the campaign. Behind them, the Greens are in third place, with a record score of 14.8%, which puts them in a key position when it comes to forming a majority in the new Bundestag, and the FDP are in fourth place currently on 11.5%;
- The situation in the Taiwan Strait is “complex and grim”, Chinese President Xi Jinping wrote in a congratulatory letter on Sunday to the newly elected leader of Taiwan’s main opposition party, who has pledged to renew talks with Beijing;
- BP said nearly a third of its British petrol stations had run out of fuel on Sunday after panic buying over the weekend due to a truck driver shortage;
- Evergrande’s electric vehicle unit Evergrande New Energy Vehicle Group will not go ahead with its domestic Shanghai IPO plan in view that the group was facing a serious shortage of funds and suspended paying some of its operating expenses and some suppliers have suspended supplies for projects;
- Pfizer CEO Albert Bourla predicts there will be a return to normal life within a year, and that it’s likely annual Covid vaccination shots will be necessary;
- Australia’s New South Wales government plans to unveil its roadmap on Monday for reopening the state from Covid-19 shutdowns, detailing the differing levels of freedoms to be afforded to citizens based on their vaccination status;
- Attention this week will be on US fiscal policy as the House will vote on a $1 trillion infrastructure bill later this week, while a September 30th deadline on funding federal agencies could force the second partial government shutdown in three years.
- Finally on the data front, there will be further clues about the state of inflation across the key economies, as the Euro Area flash CPI estimate for September is coming out on Friday. Otherwise, there will also be the manufacturing PMIs from around the world on Friday given it’s the start of a new month, along with the IS reading from the US.
The summary as at 24.09.21
Wall Street ended higher again yesterday as the S&P and Nasdaq closed 1.2% and a 1% higher with clear signs of a risk-on sentiment. European stocks broadly rose with the DAX and CAC rallying 0.9% and 1% while the FTSE ended marginally lower by 0.1%.
- Markets are mostly higher in Asia this morning, with the Nikkei, CSI and India’s Nifty up while the Hang Seng, Shanghai Comp and Kospi have all made small moves lower;
- Futures on the S&P 500 are fractionally higher this morning while those on the Stoxx 50 and pointing in the opposite direction;
- Oil prices rose for a fourth day on Friday, taking Brent towards three-year highs, as investors focused on tighter supplies amid strong appetite for riskier assets like crude and high hopes for recovery from the pandemic;
- Yields on 10-year Treasuries were up +13.0bps to 1.43% yesterday in their biggest daily increase since 25 February. The large selloff in US bonds saw the yield curve steepen with the gap between the 2-year and 10-year yield reaching 116bps, the steepest level since the first week of July;
- Eurozone PMIs came in softer than expected with the Manufacturing and Services PMIs at 58.7 and 56.3, lower than expectations of 60.3 and 58.5 respectively;
- Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its slowest level in a year, while the UK’s composite PMI at 54.1 was the lowest since February when the country was still in a nationwide lockdown;
- US weekly jobless claims were at 351k for the prior week, higher than expectations of 320k and up 16k from the week before;
- The latest policy decision by the Bank of England pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risk to their inflation projections, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE;
- The Turkish Central Bank cut rates by 100bps to 18% in a surprise move with the Lira tumbling in response. The latest rate cut comes after Erdogan said that interest rates will drop as “from now on it’s not possible for inflation to go higher.” Headline inflation however continued to rise in September to 19.25%;
- The Evergrande group missed its dollar bond coupon payment yesterday and so far, there has been no communication from the group on this. This follows instructions from China’s Financial regulators in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors.
The summary as at 23.09.21
The S&P 500 was up just shy of 1% yesterday as markets reacted positively to a somewhat more hawkish tone from the Fed. Meanwhile in Europe, the Stoxx 600 gained 1% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the Stoxx 600 having outpaced the S&P 500 for 5 consecutive sessions now.
- Major bourses in Asia traded higher on Thursday, after the People’s Bank of China (PBoC) today injected CNY 120 billion into the banking system following the injection of CNY 90 billion a day earlier. Some positive news from struggling developer China Evergrande also lifted sentiment, with the company saying today it will help investors redeem their products;
- US stock futures moved modestly higher on Thursday while European stocks are likely to extend gains for the 3rd straight session;
- WTI crude futures were positive this morning, extending strong gains overnight, amid tight US supply after hurricane Ida and storm Nicholas. As of Wednesday, around 16% of US Gulf of Mexico oil production remained offline;
- Yesterday’s FOMC meeting turned out to be a little more hawkish than originally expected. The Federal Reserve said the economy has made progress toward employment and inflation goals and that if progress continues broadly as expected, a moderation in the pace of asset purchases may soon be warranted. The Fed also signalled interest rate may need to rise faster than initially expected, with 9 of 18 policymakers projecting borrowing costs to rise in 2022;
- Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 vs. 52.0 last month;
- On the data front, the highlight today is the September flash PMIs from around the world. On the monetary front, there is the monetary policy decision from the Bank of England.
The summary as at 22.09.21
Markets were a little bit more stable yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged as investors remained vigilant as to the array of risks that continue to pile up on the horizon. Europe saw a much stronger performance though as much of the US decline came after Europe had closed.
- In Asia, all eyes were on China this morning as it reponed following a 2-day holiday. As expected, the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing short term cash injections into the economy. Other Asian markets were mixed, with the Nikkei down and, the Hang Seng and Asx up. South Korean markets continue to remain closed for a holiday;
- Futures on both the S&P 500 and the Euro Stoxx 50 are up this morning;
- Oil prices rose on Tuesday, after sharp losses the previous session, amid tighter US supplies;
- There were some positive headlines on Evergrande, as its main unit Hengda Real Estate Group said it will make coupon payment for an onshore bond tomorrow after negotiations with bondholders off the clearing house. This is a bit vague and doesn’t mention the dollar bond at this stage. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks;
- A magnitude 6.0 earthquake struck near Melbourne on Wednesday, one of the country’s biggest quakes on record;
- Today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November;
- On the pandemic, President Biden announced yesterday that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world.
The summary as at 20.09.21
Global equity markets slid last week for a second consecutive week for the first time since the Spring. Notably the S&P 500 closed below its 50-day moving average on Friday for the first time since mid-June and only the second time since early-March. European equities similarly fell back, with the Stoxx 600 index also trading under its trailing 50-day average for the first time since mid-July.
- In Asia, the Hang Seng led losses in the region, with shares of embattled Chinese developer China Evergrande Group continuing to drop. Markets in mainland China, Japan and South Korea are closed today for holidays;
- Futures on the S&P 500 are down significantly this morning while those on the Stoxx 50 are lower by an even larger percentage;
- Oil prices were also down on Monday, extending losses from Friday after the US dollar jumped to a three-week high and the US rig count rose, although nearly a quarter of US Gulf of Mexico output remained offline in the wake of two hurricanes;
- A Reuters report this morning is suggesting that China will target big property developers next in its crackdown over monopolistic behaviours;
- Lufthansa said on Sunday it would launch a rights issue that was expected to raise €2.14 billion to pay back part of a €9 billion state bailout the airline received during the coranavirus crisis;
- The economic and political agenda is quite busy this week, with three G7 central bank meetings and two G7 general elections but the conclusion of the Fed meeting (Wednesday) and German Federal election (Sunday) are the highlights. We also have the Bank of Japan and Bank of England meetings, alongside the equivalent for a number of EM central banks, including in Turkey, South Africa and Brazil. Elsewhere Canada’s general election takes place today.
The summary as at 17.09.21
Prospects of less monetary stimulus weighed on US equities yesterday with the S&P 500 falling back -0.16% after moving between gains and losses for much of the session. European equities topped their US peers, with the Stoxx 600 up +0.44% as bourses across the continent moved higher.
- Asian markets are mostly trading higher this morning. Chinese bourses are a bit mixed though which comes in spite of the PBoC increasing its cash injections into the financial system;
- US stock futures were muted in early premarket trading while European markets are set to nudge higher at the open;
- Oil prices barely moved on Friday even as more supply came back online in the US Gulf of Mexico following two hurricanes;
- US retail sales unexpectedly rose +0.7% in August (vs. -0.7% expected) but the July figure was revised lower to -1.8% compared to a contraction of -1.1% previously;
- The UK announced that it will be easing travel restrictions on at least 30 countries currently on the UK’s “red list”;
- Ryanair shares jumped 7.9% yesterday after it raised its five-year traffic growth forecast to 50% from 33% and announced that it will open 10 new bases in Europe this year;
- Shipping company Maersk revised upwards its forecast for the third quarter and for the full year 2021 after a significantly stronger performance in the first months of the quarter.
The summary as at 16.09.21
Wall Street gained more than 0.6% on Wednesday, further recovering from the recent losses as energy shares were boosted by a 3% jump in oil pirces while a slew of economic data somehow stabilised sentiment. Earlier, European markets closed in negative territory, after weak data out of China fan global growth worries while soaring inflation in the UK fueled taper fears.
- Sentiment is weak in Asia this morning with all major indices losing ground but with no new drivers behind the move;
- Futures on the S&P 500 are only a touch lower but those on the Stoxx 50 are up as they look to catch up with yesterday’s late move in US markets;
- Oil prices slipped in early morning trading but kept most of the previous day’s gains after a larger-than-expected drawdown in crude oil stocks in the United States;
- In the UK, Prime Minister Johnson reshuffled his Cabinet on Wednesday, replacing a number of senior ministers and urging his government to tackle economic inequality in the aftermath of the pandemic;
- Olaf Scholz, the front runner to succeed Angela Merkel as German Chancellor was yesterday summoned before German parliamentarians in a money laundering scandal.
The summary as at 15.09.21
The S&P 500 snapped a 5-day losing streak on Monday and Europe’s Stoxx 600 alThe S&P 500 sold off steadily throughout yesterday’s session to reverse Monday’s slight gain and end -0.6%, at its lowest level in just over three weeks. Europe’s Stoxx 600 was largely unchanged as it close before US equities took a second leg lower.
- Asian markets are trading lower this morning on weak Chinese data, with the only exceptions being the Shanghai Comp and Kospi in Korea;
- Elsewhere, US stock futures are trading flat this morning while European markets are similarly posed for a muted open;
- Oil prices climbed on Wednesday after industry data showed a larger than expected drawdown in crude oil stocks in the US, and on expectations that demand will recover as vaccine roll-outs widen;
- There was a huge miss overnight in Chinese retail sales for August which came in at +2.5% yoy as against expectations of +7.0% yoy and +8.5% yoy last month. The miss came as covid-19 restrictions hit consumer spending and travel during the peak summer holiday break. Industrial production also came in below expectations albeit the miss was smaller;
- The US CPI data came in below expectations for the first time since November last year. The month-on month reading came in at just +0.3% with used cars and trucks seeing their first decline in 6 months. This meant that the year-on-year reading ticked down to +5.3% as expected, having peaked at +5.4% back in June while core inflation saw a larger downside surprise, increasing by just +0.1 on a monthly basis and +4.0% from a year earlier;
- Meanwhile British inflation surged last month to its highest level since March 2012 as the CPI rate rose to 3.2% in annual terms after a 2.0% rise in July;
- Natural gas prices spiked +7.3% yesterday, bring their gains since the start of August to +63.8%, and up an astonishing +514$ relative to a year ago. In the meantime, Spain has announced a windfall tax on utilities and a cap on consumer bills while in Italy, the government is readying public funds to subsidise consumers’ bills;
- Apple Inc on Tuesday launched a new series of iPhones and iPads, featuring a faster processor and better cameras. It also redesigned its Apple Watch to have a larger display, with softer and more rounded corners;
- On the pandemic front, the UK government announced that millions would be offered a booster vaccine from next week. These include all of the over-50s, other adults with underlying health conditions, and health and social care workers. Elsewhere in Russia, President Putin is now in self-isolation after he was exposed to a number of positive cases among his immediate staff.
The summary as at 14.09.21
The S&P 500 snapped a 5-day losing streak on Monday and Europe’s Stoxx 600 also recovered its poise after a run of 4 declines. Energy stocks were the biggest winners on both sides of the Atlantic given fresh moves higher for commodities.
- Asian markets are following Wall Street’s lead this morning, with the Nikkei on track for its highest close since 1990;
- US stock futures rose modestly on Tuesday with European markets following a similar path ahead of the opening;
- Crude prices are up this morning as supply in the US is constrained by extreme weather with Tropical Storm Nicholas likely to hit hurricane strength before it makes landfall in Texas, although it’s expected to mostly bypass offshore oil and natural gas platforms;
- US House Democrats proposed new tax hikes to pay for the $3.5 trillion spending package. A summary from the Ways and Means Committee showed that the plan calls for top corporate and individual tax rates of 26.5% and 39.6%, respectively;
- A South Korea’s antitrust regulator fined Alphabet Inc’s Google $176.6 million for blocking customised versions of its Android operating system;
- A cyber surveillance company based in Israel developed a tool to defeat security systems designed by Apple that has been in use since at least February. Apple said it fixed the vulnerability in a software update on Monday;
- Meanwhile, China fired a fresh regulatory shot at its tech giants on Monday, telling them to end a long-standing practice of blocking each other’s links on their sites or face consequences;
- China’s second largest property developer, China Evergrande said this morning its property sales will likely continue to drop significantly in September, resulting in a further deterioration of its cash situation. The firm reiterated it could default on its debt, repeating a warning it issued two weeks ago;
- Today’s main economic release is the US CPI for August which is expected to decelerate on month-to-month bases for both headline CPI and core CPI as demand continues to soften in Covid-affected sectors. For completeness, the year-on-year print is still expected to be 5.3% and 4.2% for headline and core inflation respectively.
The summary as at 13.09.21
The sell-off on Wall Street accelerated on Friday with the S&P falling for the 5th straight session and down 1.7% for the week amidst high valuation worries and ongoing concerns that the delta variant could slow down economic growth. European equities similarly fell back, despite a dovish ECB meeting, as the Stoxx 600 ended the week -1.2% lower.
- Major bourses in Asia mainly fell on Monday, as concerns over Beijing’s regulatory crackdowns lingered while maritime tensions in the Pacific resurfaced;
- US stock futures traded modestly higher on Monday, amid US-China optimism while European markets are expected to open flat to lower;
- Oil prices rose to a one-week high on Monday, extending Friday’s gains, amid signs of supply tightness in the US due to Hurricane Ida as about three-quarters of the US Gulf’s offshore oil production has remained halted since late August. At the same time, hopes for higher demand grew following President Joe Biden’s plan to boost Covid-19 vaccination rates in the US;
- In the oil market, market attention will focus this week on potential revisions to the oil demand outlook for 2022 from the OPEC and the EIA;
- A report from the Financial Times said that China is seeking to break up Ant Group’s Co.’s Alipay and create a separate app for its loan business. Under the plan, Ant will turn over user data underpinning its lending decisions to a new credit scoring joint venture, which will be partly state-owned;
- Apple shares took a hit on Friday after a federal judge ruled that the tech giant can no longer force developers to use in-app purchasing;
- This coming week, global investors will be keeping an eye on the US consumer price index for August, set to be released tomorrow. Retail sales data will be released later in the week.
The summary as at 10.09.21
Markets maintained the risk-off sentiment yesterday even after investors got reassurance that the ECB wasn’t in a rush to withdraw stimulus and with some positive data releases from the US.
- Overnight in Asia, equity markets have moved higher this morning, with the Nikkei, the Hang Seng, the Shanghai Comp and the Kospi all posting solid advances;
- Futures of both the US and European markets are modestly higher this morning;
- Oil prices dipped on Friday, heading for weekly losses of nearly 2%, after China announced it would release oil from its strategic reserves and some US airlines warned of a slowdown in ticket sales;
- One of the main pieces of news overnight was a second call between US President Biden and Chinese President Xi, following unproductive talks between senior officials in recent months;
- The ECB announced that it will be recalibrating the pace of bond purchases under the PEPP due to improved economic and financial conditions. While reiterating the PEPP envelope amount of €1.85 trillion until at least end March 2022, the bank said it will purchase flexibly according to market conditions and with a view to prevent tightening policy too quickly;
- The ECB staff upgraded their assessment of the economy in 2021, which they now see growing by +5.0% (vs. +4.6% in June). Meanwhile, the inflation projections saw upgrades in every year of the forecasts, now at +2.2% in 2021 (+1.9% in June), and +1.7% in 2022 (vs. +1.5% in June);
- In the US, the weekly initial jobless claims for the week through September 4 fell to a post-pandemic low of 310k;
- On the pandemic side, President Biden outlined Thursday a broad plan to boost Covid-19 vaccination rates in the US, pressuring private employers to immunize their workforce as well as mandating the shots for federal employees, contractors, and health-care workers;
- Meanwhile shares on Moderna rose Thursday after the company announced it is developing a two-in-one vaccine booster shot protects against both Covid-19 and the seasonal flu.
The summary as at 09.09.21
Markets had another risk-off session yesterday as investors cast increasing doubt on the sustainability of current valuations. Upcoming central bank meetings (including today’s ECB decision) have added to these jitters, given the prospect that monetary stimulus might start to be withdrawn. By the close of trade, both the S&P 500 and Europe’s Stoxx 600 had fallen back, thanks to an underperformance among cyclicals on both sides of the Atlantic.
- Risk appetite has continued to remain weak overnight in Asia with all major indices losing ground;
- Elsewhere US and European stock futures point to further losses at the open;
- Oil prices rose for a second session on Thursday, recovering from earlier losses as a decline in US Gulf of Mexico output following damages from Hurricane Ida underpinned the market;
- In terms of overnight data releases, China’s August CPI printed at +0.8% yoy (vs. +1.0 yoy expected) while PPI came in at +9.5% yoy (vs. +9.0% yoy expected);
- Chinese gaming and media stocks including Tencent Holdings and NetEase fell by 4% to 6.4% on Thursday a day after authorities summoned them and other gaming firms to ensure they implemented new rules for the sector;
- Today’s main highlight will come from the ECB policy decision, where investors will be focused on what the Governing Council will decide about the pace of purchases under the Pandemic Emergency Purchase Programme. Comments from ECB Chief Economist Lane that didn’t rule out a move in September, along with a rise in inflation to +3.0% in August, have brought today’s decision into focus;
- The Wall Street Journal reported overnight that a split in the Democrat camp is deepening over current Fed Chair Jerome Powell’s reappointment. The report added that progressive Democrats are pushing to replace him;
- On the data front, the US job openings for July rose by more than expected to a record 10.934m which goes to illustrate the supply constraints firms are facing as the economy reopens from the pandemic. Job vacancies outnumbered hires by 4.3 million, the most since the data series began in in 2000.
The summary as at 07.09.21
Day thanks to hopes that, the weak US jobs data, would reduce the likelihood that the Fed would shortly begin to withdraw their monetary stimulus.
- In Asia, risk has continued to remain firm with the Nikkei, Hang Seng and Shanghai Comp all up. Bucking the trend is once again the Kospi in South Korea;
- US stock futures are pointing slightly higher this morning while European markets are heading for a mixed open;
- Oil prices were mixed on Tuesday in quiet trade as some investors scooped up bargains following the recent losses while growing fears over slower demand after Saudi Arabia’s sharp cuts to crude contract prices for Asia weighed on sentiment;
- Sentiment this morning is being aided by positive trade data out of China as exports came in stronger than expected at +25.6% (vs. +17.3% expected) while imports came in at +33.1% (vs. +26.9% expected);
- The Reserve Bank of Australia (RBA) stuck to its decision to taper bond purchases to AUD 4bn a week and added that it will continue the purchases at this rate until at least mid-February 2022. The RBA left its policy rate unchanged and committed to lower rates for longer as it said that conditions for rate rises will not be met before 2024 under its central scenario;
- Aluminum prices hit their highest level in over a decade yesterday as the coup in Guinea raised concerns that the supply of bauxite (which is used to make aluminum) could be affected. The country supplies around a quarter of the world’s bauxite, so any disruption there could have profound effects on the global market;
- El Salvador today became the first country in the world to adopt bitcoin as legal tender, a real-world experiment proponents say will lower commission costs for billions of dollars sent home from abroad but which critics warned may fuel money laundering;
- German regulators have launched an investigation into Allianz, after the demise of some of its US investment funds last year;
- Ryanair announced yesterday that it had ended talks with Boeing over a purchase of 737 MAX 10 jets worth tens of billions of dollars due to differences over price;
- The picture on the pandemic has started to brighten globally as the latest data from John Hopkins University is showing that last week saw the first weekly decline in new cases since early June.
The summary as at 06.09.21
Global markets saw some divergence last week as ECB members grew more hawkish and Fed officials stuck to their more dovish tones, with economic data partially reinforcing both views. US equities finished the week just off their highs with the S&P 500 just worse than unchanged on Friday but finishing up +0.58% over the course of the week. European equities, which are more cyclically focused, underperformed as the Stoxx 600 ended the week marginally lower. ill today be on the US employment report particularly after last week’s Fed chair Powell’s comment at the Jackson Hole symposium.
- Asian markets have started the week on the front foot with the Nikkei, Hang Seng, Shanghai Comp and India’s Nifty all gaining ground. The Kospi is flattish;
- Euro Futures are pretty flat this morning while US markets are closed today for the Labour Day holiday;
- Oil prices are down this morning after Saudi Arabia slashed crude prices for Asian buyers, raising the prospect of competition between OPEC+ producers to gain/maintain market share;
- US August jobs report came in short of expectations, with nonfarm payrolls increased by 235,000 in August compared to expectations of 720,000 jobs. The report marked a significant slowdown from July’s revised number of 1.053 million;
- Singapore’s aviation regulator said on Monday it would approve the return to service of the Boeing Co 737 MAX more than 2 years after the plane was grounded.
The summary as at 03.09.21
It was a familiar story for markets yesterday as the major US indexes edged ever higher to fresh records while Europe’s Stoxx 600 closed less than 0.3% away from its own record high. Meanwhile, all eyes will today be on the US employment report particularly after last week’s Fed chair Powell’s comment at the Jackson Hole symposium.
- Asian markets were mostly trading up early Friday morning with the Nikkei leading the advance. Elsewhere the Asx and Kospi are also up while the Shanghai Comp and Hang Seng are both down on weakness in Chinese technology stocks;
- Futures on the S&P 500 are pointing to a higher open while those in Europe are pointing more towards a muted open;
- Oil prices dipped on Friday after posting strong overnight gains on a weaker dollar and a bigger-than-expected fall in US crude stocks and were headed for small gains on the weak ahead;
- Overnight in Asia, one of the key headlines is that Japanese PM Suga intends to resign from his post. The announcement came at a time when Suga’s approval ratings has taken a severe beating due to the rise in coronavirus cases in the country;
- Also this morning, China released the August services PMI which came in at 46.7 (vs. 52.0 expected and 54.9 last month), the weakest reading since April 2020. Meanwhile, there were also negative revisions to the flash services PMI for both Japan and Australia;
- Today’s key data point is the US employment report with economists seeing nonfarm payrolls growing north of 700k in August, which follows an 11-month high of +943k in July;
- Yesterday we saw the release of some positive numbers from the weekly initial jobless claims for the week through August 28, which fell to their own post-pandemic low of 340k (vs. 345k expected);
- Senator Manchin put fresh doubts around Biden’s $3.5 trillion economic/infrastructure package when he said that he wanted the party to “hit the pause button” on the stimulus package, citing “runaway inflation” and uncertain geopolitics. It will require every Democrat in the Senate to vote in favour for the legislation to pass, giving Manchin power over the final result;
- In terms of the latest on the pandemic, Israel – one of the most inoculated nations in the world – recorded another record number of new cases, at 11,187, as the country increased testing capacity ahead of the start of the school year. The rise in infections has prompted the government to extend the use of booster jabs in order to improve the population’s immunity.
The summary as at 02.09.21
Markets continue to creep higher as we await the all-important US jobs report tomorrow. That was in spite of a mixed bag of data releases yesterday. By the close of trade, the MSCI World index reached all-time highs once again, even though the S&P 500 sold off late in the session to close only +0.03% higher – just short of its record. Meanwhile the dollar weakened for the 8th time in the last 9 sessions, as the greenback has had to deal with Fed Chair Powell’s dovish Jackson Hole speech last week, alongside more hawkish rhetoric from the ECB and the domestic impact of the delta variant.
- Overnight in Asia, all major indices are posting gains this morning with the Kospi in South Korea being the only exception;
- China’s markets outperformed in Asia this morning supported by the PBoC move to provide CNY 300bn of low-cost funds to banks so they can lend to small and medium-sized companies. Besides this the PBoC has also announced other measures such as interest subsidies to firms hit hard by the pandemic and a bigger role for local special bonds in driving investment;
- Meanwhile, Chinese regulators have summoned 11 ride-hailing firms, including Didi asking them to rectify non-compliant behaviour including recruiting unapproved drivers and vehicles;
- Futures on both the S&P 500 and the Stoxx 50 are struggling for direction as September gets off to a slow start;
- Oil prices fell on Thursday after the OPEC+ group yesterday agreed to continue with their planned production increases that will see a further 400k barrels per day added to supply;
- The ADP’s report of US private payrolls for August strongly underwhelmed at +374k (vs. 625k expected). The ADP’s reports have missed the actual number of private payrolls significantly in recent months, with last month’s initial reading also coming in beneath expectations at 330k (vs. 690k expected), before private payrolls then rose by +703k;
- The ISM manufacturing print for August unexpectedly rose to 59.5 (vs. 58.5 expected), with new orders up to 66.7 (vs. 61.0 expected), but the employment reading came in at a contractionary 49.0, so again not a great sign ahead of the jobs report tomorrow;
- On the pandemic front, the weekly average US hospitalisations fell for the first time since late-June yesterday in a sign that the current surge may be declining.
The summary as at 01.09.21
ck yesterday on both sides of the Atlantic as a strong inflation figure in the Euro Area and disappointing macro-economic data in the US weighed on sentiment.
- Asian markets are generally trading higher this morning with the Nikkei, Hang Seng, Shanghai Comp and Kospi all advancing;
- Futures on the S&P 500 and the Stoxx 50 are both pointing to a strong open;
- Oil prices are also up this morning ahead of today’s OPEC+ meeting;
- Overnight China’s Caixin manufacturing PMI came in at 49.2 (vs. 50.1 expected and 50.2 last month). This was in contrast to yesterday’s official manufacturing PMI reading of 50.1 which was relatively stable. The Caixin PMI is more representative of smaller and private companies while the official PMI coves larger, state-owned enterprises;
- In other overnight new, the Bank of Japan Deputy Governor Masazumi Wakatabe indicated in a speech that the central bank may revise down its economic assessment at this month’s policy meeting as the spread of the delta variant has caused the expansion and extension of the state of emergency;
- In the Euro Area, the flash CPI estimate for August came in at a far stronger-than-expected +3.0% (vs. +2.7% expected), which is the highest since November 2011, and was also above every economist’s estimate of Bloomberg. Core inflation came in at +1.6%, broadly in line with expectations but still marking its highest reading since July 2012;
- Meanwhile we had some hawkish comments out of the block with the Dutch central bank governor not saying that he believes in an immediate slowdown in ECB purchases and supports ending the pandemic emergency purchase programme in March. Furthermore, Austrian governor Holzmann said that he was in favour of reducing the pace of purchases in Q4;
- There was some positive news on the pandemic as European Commission President von der Leyen confirmed that 70% of adults in the EU were now fully vaccinated. Meanwhile vaccine “passports” are becoming more widespread with Italy requiring travellers on planes, ferries and long-haul trains show proof of vaccinations or a negative Covid-19 test.
The summary as at 31.08.21
Markets continued to power ahead yesterday will global equity indices reaching new heights thanks to dovish remarks from Fed Chair Powell at Jackson Hole last Friday. All eyes this week will be on Friday’s US August jobs report after Powell said in his speech that there has been “clear progress toward maximum employment” and that he has in favour of beginning to taper the Fed’s asset purchases this year.
- Overnight in Asia, sentiment has been weighed down by weaker-than-expected August PMIs from China with the Hang Seng and Shanghai Comp having lost ground this morning while the Nikkei and Kospi have both moved higher;
- Futures on the S&P 500 are pointing to a higher open while European markets are seen opening in the opposite direction;
- Oil prices slipped on Tuesday amid concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output;
- China’s non-manufacturing PMI for August fell to a contractionary 47.5, which is below the 52.0 reading expected and down from 53.3 in July. Although the manufacturing reading was relatively resilient at 50.1 (vs. 50.4 last month and 50.2 expected), the composite PMI was below 50 as well at 48.9, which marks the first sub-50 reading since February 2020;
- Meanwhile China’s regulators announced that children below 18 years old will only be allowed to play online games for up to three hours per week and only during specific times. The ruling significantly reduced game time for minors who, under 2019 rules, were allowed to play for up to 90 minutes a day for most parts of the day;
- The US finished its withdrawal efforts from the airport in Kabul on Monday, effectively ending a two-decade conflict that began not long after the terrorist attacks of September 11, 2001. Meanwhile, President Joe Biden is expected to address the nation Tuesday afternoon to explain his decision not to prolong the US mission in Afghanistan beyond August 31;
- The EU yesterday voted to reimpose restrictions on non-essential travel from the US;
- Zoom Video Communication Inc posted its first billion-dollar revenue quarter but signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom, sending its shares tumbling 11%;
- Share of Robinhood also crashed on Monday on news that PayPal Holdings Inc may start an online brokerage and a report saying regulators were looking at a possible ban on a practice that accounts for the bulk of the company’s revenue;
- On the economic front, today we have the release of the Euro Area flash CPI estimate for August. That follows yesterday’s inflation reading from Germany, which showed HICP rising to +3.4% as expected, which is the highest reading since July 2008.
The summary as at 30.08.21
US equity indices closed at yet another record high on Friday as the much-awaited Fed chair’s speech at Jackson Hole didn’t provide much in terms of new information. The economy is recovering, substantial progress has been made and the labour market is showing some “clear progress”. Given these conditions, the Fed could consider a tapering starting this year but made it extremely clear that it won’t be associated to a rate hike story which is completely separate and not on the table.
- Asian shares perked up on Monday after US Federal Reserve Chairman Jerome Powell struck a dovish tone at the cental bank’s long-awaited symposium, although investors remained cautious about prospects in China;
- Outside of Asia, futures on the S&P were trading around the flatline while European indices were heading for a slightly higher open. Meanwhile UK markets will be closed today for a bank holiday;
- Oil prices pared early gains on Monday, off more than three-week highs reached earlier in the session as Hurricane Ida forced shutdowns and evacuations of hundreds of offshore oil platforms in the Gulf of Mexico;
- US Fed chair indicated Friday that the central bank is likely to begin tapering before the end of the year, though there is still “much ground to cover” before rate hikes;
- Hurricane Ida made landfall in Louisiana on Sunday as a Category 4 storm with winds of 150 miles per hour, one of the strongest storms to hit the region since Hurricane Katrina. It has since dropped to a Category 1 storm;
- The campaign over who will replace German Chancellor Angela Merkel heated up on Sunday after a new opinion poll showed the center-left Social Democrats (SPD) opening up a bigger lead over Merkel’s conservatives.
The summary as at 27.08.21
Ahead of Fed Chair Powell’s speech at the annual Jackson Hole symposium later today, global equities slipped back yesterday after a succession of fresh highs, courtesy of hawkish remarks from a number of Fed officials alongside further turmoil in Afghanistan. However, those moves were fairly contained overall, with the major indices still just shy of
- Overnight in Asia, markets are mostly trading higher with the Hang Seng, Kospi and Shanghai Comp all advancing, though the Nikkei has lost ground this morning. Chinese stocks have been supported by a statement from the PBoC that it will use its monetary policy tools to support the rural sector, with measures including the reserve requirement ratio, along with relending and rediscounting measures;
- Outside of Asia, futures on the S&P are pointing to a higher open while European markets are set to open flat;
- Oil prices rose on Friday, on track to post big gains for the week, on worries about near term supply disruptions as energy companies began shutting in production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend;
- In terms of Fed talk, we heard yesterday from three of the more hawkish Fed officials, who all called for tapering to commence sooner rather than later. Kansas City Fed President George said that the Fed should begin tapering this year, followed by St Louis Fed President Bullard who say that the Fed should finish its tapering in Q1 2022. Finally, Dallas Fed President Kaplan said that he remains in favour of announcing tapering at the September meeting;
- Over in Afghanistan, there were further negative developments yesterday as two bombs exploded close to Kabul airport and led to a number of casualties, including 13 US troops. Amidst all this, President Biden stood firm to his plans to withdraw American forces by August 31, though he said that “We will hunt you down and make you pay” in reference to those who carried out the attack;
- Running through yesterday’s economic data, the second estimate of Q2 GDP growth in the US was revised down to a tenth to show an annualized rate of +6.6% (vs. +6.7% expected);
- The main highlight for the day will be Fed Chair Powell’s speech at the Jackson Hole symposium which is scheduled for 4pm CET. His speech is expected to largely mirror his remarks at the July FOMC press conference, and so the market isn’t expecting a strong signal on the Fed’s September meeting. Instead, a tapering announcement is expected to come at the following meeting in early November.
The summary as at 26.08.21
Risk assets put in another strong performance yesterday that saw a number of equity indices hitting all-time highs once again as investors looked forward to Fed Chair Powell’s speech tomorrow at the Jackson Hole symposium. On Wall Street it was the cyclical industries and small caps which powered the advance in clear evidence of a risk-on move. In Europe, it was a far more subdued story for equities, with the Euro Stoxx 50 having barely moved by the end of the session.
- Overnight in Asia, markets in the region are continuing to struggle as concerns over China’s ongoing regulatory crackdown came back to the fore with the Hang Seng, Shanghai Comp, Kospi and the Nikkei all moving lower;
- Elsewhere, futures on the S&P 500 are fractionally lower this morning as are expectations at the start of trading on European markets;
- Oil prices fell on Thursday for the first session in four amid renewed concerns about demand recovery as more restrictions are imposed to curb Covid-19 infections;
- South Korea’s central bank raised its policy rate by 25 basis points to 0.75% for the first time in nearly three years, becoming the first developed economy to raise interest rates during the pandemic era;
- European Central Bank Chief Economist Philip Lane said on Wednesday that the economic impact from the spread of the delta Covid-19 variant is likely to be limited across the euro zone, which remains on course for a robust recovery through 2022;
- Deutsche Bank’s asset management arm DWS Group is under investigation by US regulators over allegations that it misrepresented its sustainable investing criteria;
- On the political front, there’s exactly one month to go until the German federal election which is now looking incredibly tight based on current polls. The fact that the pools are indicating that 3 parties will be needed to form a majority coalition after the election, raises the prospect that there could be lengthy negotiations on forming a new administration;
- On the pandemic, there were further developments on booster jabs as Johnson & Johnson said that a second dose of their vaccine was found to trigger a strong jump in the number of antibodies;
- Delta Air Lines announced that they will impose a $200 monthly surcharge on employees who weren’t vaccinated, which will take effect from November 1. Meanwhile, the EU is expected to discuss toady whether travel restrictions should be brought back on visitors from the US as Covid-19 cases continue to rise there.
The summary as at 25.08.21
Risk assets had another strong performance yesterday, and the S&P climbed to yet another all-time high as markets continued their reversal after last week’s delta-related selloff. Further positive Covid developments have been part of the story, with investors taking comfort from the plateauing number of cases at the global level. In addition to that, we’ve also had some interesting developments on the policy front, with hopes for further fiscal spending bolstered by progress in the US House of Representatives on the Democrats’ economic agenda and an announcement by the PBoC yesterday that it shall continue to improve credit support for the real economy.
- Overnight in Asia, risk appetite has weakened with markets trading lower for the most part;
- Outside of Asia, US stock futures are pointing towards a flat open on Wall Street while European markets are set for a slightly lower open;
- Oil prices fell this morning, taking a breather after a strong rally this week spurred by the loss of a quarter of Mexico’s production and signs that China has curbed a recent coronavirus outbreak;
- The US House of Representatives moved to adopt the $3.5 trillion budget resolution while also starting the process of a floor debate on the bipartisan infrastructure bill. Speaker Pelosi committed to passing the infrastructure bill by September 27;
- President Biden announced that the US would stick to its August 31 deadline for evacuations from Kabul airport, which went again the calls to extend the withdrawal deadline at the G7 yesterday;
- A poll from Forsa in Germany showed the centre-left SPD (23%) taking an outright lead over Chancellor Merkel’s CDU/CSU (22%) bloc, which is the first time that’s happened since 2017. This continues the trend of steadily-increasing SPD support over recent weeks, and brings into play the prospects that Merkel’s party could be out of power soon for the first time since 2005.
The summary as at 24.08.21
After a fairly poor performance for risky assets last week, yesterday saw a sizeable rebound as optimism returned to markets once again, with the S&P 500 finishing just short of its all-time high. In some ways it was a surprising outcome, particularly given the weaker-than-expected numbers from the flash PMIs, but there seemed to be increasing optimism that the weakening outlook might actually lead to a more cautious attitude by central bankers when it comes to withdrawing monetary policy support. It was not surprising then to see tech stocks outperform, sending the Nasdaq to a fresh record high.
- Overnight in Asia, markets have taken Wall Street’s lead with the Nikkei, Hang Seng, Shanghai Comp and Kospi all moving higher in excess of 1.0%. Sentiment there has been further supported by a PBoC statement overnight that they’re going to improve credit support for the real economy and also make overall credit growth more stable;
- Outside of Asia, futures on the S&P 500 were up this morning and European markets are also set to inch higher;
- Oil was lower in a likely technical correction in Asian trade, after posting the largest daily percentage gain since March on Monday;
- The flash PMIs in August pointed to fading momentum across a number of key economies. Numbers for France, Germany and the UK all came in beneath expectations. The US number similarly pointed to sagging momentum as their composite PMI fell to an 8-month low. One bright spot was the Euro Area as a whole, where the composite PMI was basically in line with the consensus, pointing to a stronger performance among the European periphery countries;
- Yesterday saw confirmation from the US FDA that the Pfizer-BioNTech vaccine had become the first to receive full approval, as opposed to the emergency use authorisation it was previously being issued under. For now however, that full approval only applies to those 16 and over, with those aged 12-15 still only receiving the vaccine under the emergency use authorisation.
The summary as at 23.08.21
There was a reversal of fortunes on the US market on Friday as the S&P 500 recorded a gain that pared back the index’s weekly loss to just –0.6%. On the other side of the Atlantic, the Euro Stoxx 600 ended the week down –1.5%, a noticeably underperformance. Meanwhile in Asia, ongoing headlines about Chinese regulation coupled with slowing economic data left both the Nikkei and Shanghai Composite negative on an YTD basis.
- Asian shares bounced on Monday as a wave of bargain hunting swept beaten-down markets and China reported no new locally acquired Covid-19 cases for the first time since July, though the mood remained brittle overall;
- Futures on both the S&P 500 and the Eurostoxx 50 are firmly up this morning as well;
- Oil pared some losses on Monday, after suffering its worst week in more than nine months as investors anticipated weakened fuel demand worldwide due to a surge in Covid-19 cases;
- On the data front, we have the release of the August PMIs to look forward to today, which will give us an initial indication of how the global economy has fared into the month;
- Bloomberg reported over the weekend that Treasury Secretary and former Fed Chair Yellen had told senior White House advisors that she was in favour of reappointing Chair Powell for a second term. According to the article, President Biden was likely to make his decision around Labour Day (September 6);
- Meanwhile it was announced that this week’s Jackson Hole symposium would be moving over to a virtual format rather than the in-person gathering that was originally planned;
- Bitcoin hit $50,000 over the weekend to reach a more than 3-month high. The surge in price follows news last week that Coinbase will buy $500 million in crypto on its balance sheet and allocate 10% of profits into a crypto asset portfolio. Moreover, PayPal announced it will launch its service to let people buy, hold and sell digital currencies, in the UK.
The summary as at 20.08.21
Risk appetite continued to evaporate in yesterday’s session as an array of concerns gathered pace. The delta variant remains the biggest worry for investors along with the question of waning vaccine efficacy. Moreover, nervousness about possible tapering by the Fed ahead of next week’s Jackson Hole speech by Chair Powell, along with a potential Chinese growth slowdown have further played on investors’ minds. In the US, the S&P did manage to pare back its earlier losses to move into positive territory by the close, but other indices on both side of the Atlantic, moved lower on the day.
- Asian equity markets have taken yet another leg lower overnight, with the Nikkei, Hang Seng, Shanghai Comp and Kospi all losing ground this morning;
- Future on the S&P 500 are down while European markets are set to open flat;
- Oil prices continued their slump yesterday with prices having fallen for 6 successive days now, which is the longest run of declines in a month as investors moved to price in a more negative outlook. Prices were a bit steadier this morning;
- European Luxury goods stocks such as LVMH and Kering registered hefty losses yesterday following a speech from Chinese President Xi earlier in the week about growth wealth inequality. Those comments prompted concerns on whether the super-rich could have to pay higher taxes;
- Elon Musk announced at Tesla’s AI Day that the company will probably launch a “Tesla Bot” humanoid robot prototype next year, designed for dangerous, repetitive, or boring work that people don’t like to do;
- Estee Lauder Cos Inc forecast fiscal 2022 sales largely above estimates boosted by a rebound in demand for makeup products at its brick-and-mortar stores as people start venturing out following the easing of Covid-19 curbs;
- Adyen reported earnings for the first half that more than doubled over a year ago period, citing higher volumes and strong growth in North America.
The summary as at 19.08.21
The lingering concerns about the delta variant meant that the risk-off tone continued yesterday, with investors contemplating a sharp rise in cases across a number of key economies that’s increasingly clouding the outlook for the rest of the year. By the close of trade, the S&P 500 had posted its largest one-day loss in nearly a month after the July FOMC minutes showed that most officials were in favour of tapering bond purchases by the end of 2021.
- Overnight Asian markets are following Wall Street’s lead with the Nikkei, Hang Seng, Shanghai Comp and Kospi all lower this morning;
- Outside of Asia, futures on the S&P 500 are also pointing a touch lower as are European markets;
- Oil prices are down over 1.0% this morning after falling again yesterday following an EIA report that showed US gasoline stockpiles were up +696k barrels in the week ending 13 August;
- Minutes from the July FOMC meeting showed that members thought “that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year.” The minutes noted that the economy had reached its goal on inflation and was “close to being satisfied” with the progress of job growth;
- UK CPI for July came in beneath every forecast on Bloomberg at +2.0% (vs. +2.3% expected), with core CPI similarly underwhelming with a +1.8% reading (vs. +2.0% expected);
- Nvidia reported Q2 earnings on Wednesday, beating estimates on the back of strong graphics card sales. However, the company’s cryptocurrency chip product, CMP, had lower sales than the company predicted in May. It also mentioned that talks with regulators to clear its $40bn proposed acquisition of British semiconductor technology firm Arm Ltd are taking longer than expected;
- Cisco’s quarterly earnings and revenue came in above analysts’ expectations but its earnings guidance was slightly disappointing;
- Shares of Robinhood tumbled more than 5% in after-hours trading after its first earnings report as a public company. The company reported a net loss of $502mn, within the expected loss of $487mn to $537mn forecast by the company. Its revenue more than doubled, boosted by a massive surge in crypto trading;
- On the pandemic, we got confirmation yesterday from US public health officials that booster shots would commence from next month, with a plan to begin offering them from the week of 20 September, subject to an FDA evaluation and a CDC recommendation.
The summary as at 18.08.21
Global equity markets continued to lose ground yesterday as investors angst ratcheted up further about the spread of the delta variant and the economic consequences of further virus outbreaks. Amidst these jitters, the S&P 500 fell back from its all-time high the previous day and roughly erased the gains of the past three sessions, with cyclicals leading the declines as part of a broad risk-off move. Meanwhile European equities proved a little more resilient even though this masked a sharp regional divergence as southern European assets struggled in particular, with Italy’s FTSE MIB and Spain’s IBEX 35 both moving lower.
- The risk-off sentiment has eased up this morning in Asia, with the Nikkei and the Hang Seng on track to end a run of 4 successive declines, the Shanghai Comp poised to end a run of 5 declines, and the Kospi looking to end a run 0f 8 declines;
- Futures on the S&P 500 are looking fractionally higher while European bourses are also set for a higher open;
- The decline in risk appetite was also reflected in oil prices which continued to fall as delta fears saw increasing questions being asked about the strength of economic demand over the coming months. Prices continued to dip further this morning;
- Overnight, one of the big pieces of news came from the Reserve Bank of New Zealand, who maintained their Official Cash Rate at 0.25% given the imposition of a nationwide lockdown;
- On the earnings front, Home Depot saw the largest decline in the Dow Jones after weaker-than-expected results, though Walmart was just flat even after the company raised their full-year outlook;
- Looking at yesterday’s economic data, there was a mixed bag of releases from the US with retail sales falling by –1.1% in July (vs. -0.3% expected) while industrial production was more resilient with growth of +0.9% (vs. +0.5% expected);
- There was more positive news on the UK labour market however, where the unemployment rate in the 3 months to June unexpectedly fell to 4.7% (vs. 4.8% expected). That leaves the focus on this morning’s CPI report, with the last couple of releases surprising to the upside;
- According to Reuters, the US government is planning to extend mask mandates for travellers on airplanes, trains, and buses through January 18 at the earliest.
- Separately on the US, we’re expecting to hear from President Biden today on booster shots, with the New York Times reporting that the recommendation will be that vaccinated individuals get a booster shot 8 months after their second dose;
- On the ongoing crisis in Afghanistan, NATO chief Stoltenberg said the US, UK, Turkey, Norway, and other allies are working to securing Kabul airport and continue evacuations. The US announced they are aiming for a flight every hour, eventually hoping to fly 5-9k people out of the country per day, and that the operation could continue for a few weeks.
The summary as at 17.08.21
The S&P 500 reversed course late into the session yesterday to finish at yet another record close, in spite of a number of global risks on the horizon that sent European equities lower earlier in the session. This gain means that the S&P now sits at double its pandemic low from March 2020.
- Asian equity indices took another leg lower overnight, with Chinese internet stocks in Hong Kong falling again as regulatory fears resurfaced;
- US stock index futures were slightly lower overnight as were European markets before the opening;
- Oil prices rose this morning, recovering from the previous day’s losses, as investors sought bargains and on reports from OPEC+ sources the markets didn’t need further oil supplies than planned in spite of US pressure to increase output;
- China’s market regulator issued draft rules on Tuesday aimed at stopping unfair competition on the internet. Chinese listed technology stocks in Hong Kong, the likes of Tencent and Alibaba fell sharply on the news;
- President Joe Biden defended his decision to pull US troops out of Afghanistan, saying that “American troops cannot and should not be fighting in a war and dying in a war that Afghan forces are not willing to fight to themselves”;
- Elsewhere, the UK House of Commons is being recalled tomorrow from its summer recess to discuss the situation, and a statement from Prime Minister Johnson’s office said that he plans to host a virtual meeting of G7 leaders on the issue in the coming days;
- Boston Fed President Rosengren said that the Fed has met its objectives on the inflation side and that the labour market was likely to meet their goal by the September meeting. As a result, he indicated that he’d be supportive of announcing a start to the taper in September if the US gets another “strong” jobs report and repeated that he would favour reducing purchases of mortgage-backed securities and Treasuries by equal amounts, ending the taper by mid-2022;
- Faurecia agreed over the weekend to buy a majority stake in Germany’s Hella for €6.7bn with the shares jumping over 12% on Monday;
- Germany’s finance agency announced plans to sell up to a quarter of its 20% stake in Lufthansa over the coming weeks following positive developments at the bailed-out airline;
- US experts are expected to recommend Covid-19 vaccine boosters for all Americans, regardless of age, eight months after they received their second dose of the shot.
The summary as at 16.08.21
Global equity markets continued their ascent to fresh records last week even as the daily moves became smaller. The S&P 500 finished at yet another record, its 48th this year, which is the most at this point of the year since 1995. Similarly European equities rose to their own record close on Friday – its tenth in a row, with the Stoxx 600 marking its longest run of consecutive gains since 2006.
- Amidst weak data out of China, rising geopolitical risks and the continued spread of the delta variant, Asian markets are mostly trading lower this morning with the Nikkei, Hang Seng, Kospi and Asx all losing ground. Chinese bourses have fared somewhat better however, with the CSI 300, Shanghai Comp and Shenzhen Comp holding their ground thanks to support from an overnight operation by the PBoC that saw the central bank roll over much of its medium-term policy loans coming due;
- Elsewhere, S&P 500 futures are also pointing lower this morning similarly to European bourses;
- Oil prices fell more than 1% on Monday, dropping for a third session, after official data showed that refining throughput and economic activity slowed in China in an indicator that fresh Covid-19 outbreaks are crimping the world’s no. 2 economy;
- The main news of the weekend was in the geopolitical sphere as the Taliban reached the Afghan capital of Kabul and President Ashraf Ghani left the country. This follows a 3-week offensive by the Taliban that’s seen a major redrawing of the balance of power within the county;
- Chinese economic data for July came in below expectations across the board this morning. Retail sales grew by just +8.5% yoy (vs. +10.9% expected) while industrial production growth similarly underwhelmed at +6.5% yoy (vs. +7.9% yoy expected). Furthermore, fixed income investment was up +10.3% yoy in the frist seven months of the year (vs. 11.3% yoy expected), and the unemployment rate ticked up +5.1% (vs. +5.0% expected);
- Meanwhile there was somewhat stronger data from Japan, where their preliminary Q2 GDP came in at an annualised rate of 1.3% qoq (vs. +0.5% qoq expected), rebounding from an upwardly revised –3.7% qoq in the previous quarter.
The summary as at 13.08.21
Global stock markets hit record highs on Thursday while the dollar and US Treasury yields edged higher, building on recent strength, as the debate continued over when the Federal Reserve will start to ease stimulus. Meanwhile European stocks equaled their longest winning streak since 2017, closing marginally higher and extending gains for a ninth consecutive session.
- Asian shares dropped again overnight, dragged down by a fall in Chinese blue chips as weaker-than-expected China lending data triggered liquidity concerns. As major markets in the US and Europe have been hitting regular highs, the MSCI Asian benchmark is now down more than 10% from its February peak;
- Oil prices fell for a second day after the International Energy Agency (IEA) warned that demand growth for crude and its products had slowed sharply;
- US jobless claims for the week through August 7 were in line with expectations at 375k. That’s a –12k decrease from the previous week, and the fourth weekly decline in the last five weeks;
- Airbnb Inc said its current quarter bookings could be hit by the Delta variant and a slowing pace of vaccination in the US. Nonetheless, it expects the third quarter to be its strongest on record;
- Disney swung to a quarterly profit compared to a loss the same time last year after a 45% jump in revenues blew past forecasts. Disney theme parks returned to profit for the first time in five quarters and it had 116 million paying subscribers for its Disney+ streaming service;
- Adidas is selling off Reebok to Authentic Brands Group for up to $2.5 billion, some $1.3 billion below its original purchase cost in 2002;
- On the pandemic, China partly shut down the third busiest port in the world yesterday due to an infected worker;
- Separately, the US FDA has approved booster shots of Moderna and Pfizer vaccines for immunocompromised individuals and said in a statement that other fully vaccinated individuals do not need an additional vaccine dose right now.
The summary as at 12.08.21
There was a bit of a board rally yesterday as equities hit another record high even as bond prices increased on slightly moderating US inflation data. The S&P rose +0.25%, and has now traded in a less than 0.34% range in each of the last 4 sessions. In Europe, the Stoxx 600 reached a new high for an eighth straight session with cyclical largely driving the increase.
- Most Asian markets were down overnight with the Nikkei being one of the few exceptions;
- US stock futures are mixed this morning while European markets are headed for a higher open;
- Oil prices were steady on Thursday following two days of gains after a call from the United States for major producers to boost output reinforced supply concerns;
- US headline CPI rose +0.5% in July, in line with expectations and leaving year-over-year change steady at 5.4% (5.3% expected). Core inflation rose by +0.3% (+0.4% expected), which was the softest reading since March. The reopening-sensitive categories (autos, insurance, lodging, airfare, restaurants) made up just 13% of the overall monthly increase, after being over 50% of the previous 3 inflation prints;
- The UK’s gross domestic product rose about 4.8% in the second quarter after the country removed certain Covid-19 related restrictions, compared with a 1.6% decline in the first quarter;
- Nio, the Chinese electric carmaker posted a narrower than expected loss and a surge of 127.2% in revenue. Nio forecast revenue to increase between 96.9% to 112.8% in the third quarter;
- Vestas, the world’s biggest wind turbine maker, cut its 2021 outlook in response to higher costs and supply constraints as the company reported second-quarter operating profits that fell short of forecasts;
- Bloomberg reported overnight that the US FDA might clear vaccines from Moderna and Pfizer/BioNTech for booster doses as soon as today for people with compromised immune systems.
The summary as at 11.08.21
Equity markets were once again fairly steady yesterday, with the S&P 500 up +0.10% and the Eurostoxx 50 rising +0.26% as cyclical stocks took the lead again. Energy stocks gained both in Europe and the US as oil prices rebounded following their roughly 10% decline in the first handful of business days this month.
- Asian markets are mostly trading higher this morning outside of the Kospi as South Korea reported a record number of daily coronavirus infections. The Nikkei, Hang Seng, Shanghai Comp and Asx are all up;
- Futures on the S&P 500 are trading a touch weaker while European markets are heading for a positive open;
- Oil prices consolidated strong overnight gains as a bullish outlook for US fuel demand outweighed concerns about mobility curbs in Asia;
- The US Senate passed their $1 trillion bipartisan infrastructure package that includes a $550 billion of new spending over the next eight years;
- The big data item today is the US inflation print. Expectations are for a +0.5 m/m increase in headline CPI and a tick down to 5.3% y/y, after last month came in at +0.9% m/m, which took the y/y reading to +5.4%;
- Thyssenkrupp swung to an operating profit in the third-quarter on the back of high material prices and demand from the car sector, but cautioned the positive impact on its steel division would be delayed.
The summary as at 10.08.21
Equity markets were relatively stable yesterday with the S&P 500 down fractionally and the Stoxx 600 ending marginally higher as investors grappled with higher Covid-19 cases counts due to the delta variant and an imminent pullback in monetary stimulus.
- Asian markets are trading fairly mixed this morning with the Nikkei and Hang Seng up while the Shanghai Comp and Kospi are down;
- Futures on the S&P 500 are down as are those on the Stoxx 50;
- Oil prices edged up this morning after falling to a three-week low yesterday as rising covid-19 cases weighed on demand expectations;
- Two Federal Reserve officials said on Monday that the US economy is growing rapidly and that while the labour market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes;
- The US Senate voted in favour of a $1 trillion plan to renovate the nation’s infrastructure, with $450 billion already committed. A final vote will now be sought in the upper chamber;
- The latest US Job Openings and Labour Turnover Survey (JOLTS) showed a record high 10.07mn available jobs in June (9.27mn expected), up from the previous month’s record of 9.48mn. Job opening exceeded hires by 3.4mn in June, which is a narrower gap than in May but still high;
- BioNTech reported a solid rebound in sales and posted a profit in the second quarter, and now expects, the Covid-19 vaccine developed with Pfizer to bring in €15.9bn in sales;
- Meanwhile, Australia’s pharmaceutical regulator has granted Moderna provisional approval to the drugmaker’s Covid-19 vaccine. Shares of Moderna rose by 17.1% yesterday.
The summary as at 09.08.21
US markets closed mixed on Friday even as nonfarm payrolls beat estimates with the S&P inching up 0.2% to another record while the Nasdaq ended 0.4% lower.
- Asian equity markets have started the week on the front foot though with the Hang Seng, Shanghai Comp, Asx and Kospi all up. Japanese markets are closed for a holiday;
- Futures on the S&P 500 are down some –0.19% and those on the Stoxx 50 are down –0.12%;
- Oil prices fell nearly 2% on Monday, extending last week’s steep losses on the back of a rising US dollar and concerns that new pandemic curbs in Asia, especially China may set back the global recovery in fuel demand;
- China’s July CPI came in at +1.0% yoy (vs. +0.8% expected) while PPI printed at +0.0% yoy (vs. +8.8% expected);
- Gold was down as much as -4.15% this morning at one point on concerns over tighter Fed policy on the back of Friday’s strong jobs report. It was last down in around -1.3 while losses in Silver were a bit more amplified;
- ECB Governing Council member Jen Weidmann said that inflation in the euro area could pick up faster than expected and added that the PEPP must end when Covid-19 crisis is over;
- Saudi Arabian state oil producer Aramco reported a near four-fold rise in second-quarter net profit on Sunday, beating expectations and boosted by higher oil prices and a recovery in oil demand.
The summary as at 06.08.21
Equity markets in the US and Europe enter today’s important payroll report day at record highs as investors yesterday digested July PMI readings, relatively hawkish Fed and BoE comments, along with overall strong corporate earnings.
- Asian markets are trading on the weaker side this morning as the spread of the delta variant and the regions’ low vaccination rate are dampening sentiment;
- Futures on the S&P 500 are trading a touch weaker while European stocks are set for a muted open;
- US crude edged up on Friday, but remained on track for its biggest weekly decline since late October on demand concerns as top consumers impose travel restrictions to curb the spread of the Covid-19 Delta variant;
- US jobless claims for the week through July 31 were at 385k, representing a -15k decline from the previous week and the second consecutive weekly decline. Also notably, continuing claims through July 24 fell to 2.93m from 3.27m the previous week, which is the largest weekly decline in those receiving unemployment benefits since late November 2020;
- The Bank of England shifted slightly from their recent pledge of keeping policy loose in the short-to-medium term as the central bank indicated that it was concerned about inflation. The BoE acknowledged “some modest tightening of monetary policy over the forecast period was likely to be necessary to be consistent with meeting the inflation target sustainably in the medium term.” This comes as the MPC raised it expectations for near-term inflation, with the peak now projected to be closer to 4%.
- President Joe Biden took a step toward his goal of slashing greenhouse gas emissions with an executive order aimed at making half of all new vehicles sold in 2030 electric;
- Moderna published analysis of the company’s late-stage study of its Covid-19 vaccine and found that it’s 93% effective 6-months after the standard two-dose regimen;
- Uber recorded a quarterly net income for the first time as a public company in the second quarter of 2021. Net income of $1.1 billion during the period was largely driven by unrealized gains from the revaluation of Uber’s equity investments in Chinese ride-hailing firm Didi Chuxing and autonomous technology startup Aurora;
- Spaceship company Virgin Galactic opened ticket sales yesterday for space flights starting at $450,000 a seat. The company said it will have three consumer offerings – a single seat, a multi-seat package and a full-flight boy out;
- Allianz posted a better-than-expected 46% jump in second-quarter net profit and provided a rosier outlook for the full year;
- India’s top court handed Amazon.com a major victory in a case where it has sought to stall its partner Future Group’s $3.4bn retail assets sale to rival Reliance Industries;
- Economists are forecasting that non-farm payrolls will have risen by +1m in July, which would be the fastest pace of jobs growth since last August. In turn, this would bring the unemployment rate down to a post-pandemic low of 5.6%.
The summary as at 05.08.21
The S&P 500 ended lower yesterday as slightly hawkish comments by central bank officials and mixed data took the index down 0.5% from its previous day’s record high. Meanwhile European equities rose for a third straight day with the Stoxx 600 gaining 0.6% to hit another record.
- This morning in Asia, markets are slightly weaker with the Hang Seng, CSI, Shenzhen Comp and Kospi all down. The Nikkei is trading up. Sentiment in the region remains marred by the headlines in Chinese media pertaining to the ongoing regulatory crackdown in the country with the Securities Times reporting this morning that there is no need for the government to continue tax incentives for the gaming industry;
- Outside of Asia, futures on the S&P 500 are up this morning as are those in Europe;
- Oil prices edged higher on Thursday, supported by tensions in the Middle East, but failed to regain most of the previous day’s losses after a surprise build in crude stockpiles in the US;
- The July ADP employment report in the US was well below expectations at 330k compared with the consensus of 690k and at its lowest level since February;
- Fed Vice-Chair Clarida, said that the Fed remained on course to announce tapering bond purchases this year and then move on to raising interest rates as soon as early-2023. Overnight, we also heard from the San Francisco Fed President Mary Daly who said that the Fed may start tapering its asset purchases later this year or in early 2022;
- Siemens reported a rise in third-quarter profit and revenue that beat expectations, and raised its full-year outlook on the back of the global economic recovery;
- Adidas raised its outlook as demand soared in most of the world but took a hit in China where Western brands faced a call for a boycott of their products in late March;
- Bayer lifted its outlook for 2021, citing double digit growth rates at all divisions during the second-quarter, most notably its pharmaceuticals unit;
- Robinhood shares soared again on Wednesday as news emerged that on Tuesday, Ark Invest’s Cathie Wood took a big stake in the Company for her Ark Fintech Innovation ETF.
The summary as at 04.08.21
Markets were generally quiet for a second day yesterday though sentiment was somewhat improved as strong earnings announcements prompted European and US stocks to close at new record highs.
- Asian markets are mostly trading higher outside of the Nikkei, with the Hang Seng, Shanghai Comp and Kospi all up. Sentiment is being aided this morning by the toning down of criticism of the gaming/online entertainment industry by Chinese media outlets;
- Future on the S&P 500 are fractionally down while those on the Stoxx 50 are pointing in the opposite direction;
- Oil prices fell for a third day on Wednesday on mounting concerns that the increasing spread of the delta variant of the coronavirus in top consuming countries will cut fuel demand;
- Alibaba Goup Holding Ltd missed analyst estimates for first-quarter revenue on Tuesday, as its e-commerce business was hurt by rising competition from smaller players such as JD.Com Inc and Pinduoduo Inc. Alibaba’s results mirror those of Amazon, as the easing of pandemic-related restrictions has led to more consumers visiting physical stores rather than ordering online;
- Toyota Motor Corp reported on Wednesday a record quarterly operating profit as pandemic-hit sales rebounded and it weathered a global chip supply shortage better than many rivals;
- Commerzbank announced today that it swung to a second-quarter loss as the lender undergoes a major restructuring and after a write off to end an outsourcing project. The bank is carrying out a €2bn restructuring involving hundreds of branch closures and 10,000 job cuts to get back on a path to profit;
- Shares of Robinhood soared Tuesday, pushing the newly public stock trading app well above its IPO price of $38 per share last week. The stock closed at $46.80 per share, up 24.2% on Tuesday;
- From an economic data point of view, the main data highlight today will be the July service and composite PMIs from around the world. Overnight, we have already seen China’s Caixin services PMI which came in at a strong 54.9, the highest print since December 2020.
The summary as at 03.08.21
The first business day of August was slightly starved of newsflow but sentiment progressively weakened as the day developed with the S&P 500 last night. In Europe the Euro Stoxx 50 finished +0.67% as sentiment in Europe held up.
- Asian markets are trading on the weaker side with the Nikkei and Hang Seng down almost 1% while the Shanghai Comp is flat and Kospi slightly higher;
- Sentiment in Asia took a turn for the worse this morning after a commentary run by the Economic Information Daily called online gaming as “spiritual opium” and “electronic drugs” which in turn seems to be stoking concerns that China might target the online entertainment industry next in its regulatory crackdown;
- Outside of Asia, futures on the S&P 500 are up marginally while those on the Stoxx 50 are down as they try to catch up with yesterday’s late move in the US;
- Crude oil prices reversed course after an early bounce on Tuesday, as concerns over coronavirus curbs combined with slowing factory activity in key markets weighed on sentiment;
- The July ISM manufacturing report in the US came in at 59.5 which is the lowest reading since January and was down 1.1pts from June and also well below expectations for 61.0. However, the details were better than the headline suggested with both the new orders and the employment component bettering expectations;
- Societe Generale has beaten analysts’ expectations in the second quarter of this year, helped by a bounce back in retail banking in France and fewer loan defaults;
- Standard Chartered posted a higher than expected 57% jump in first-half pretax profit and announced a $250 million share buyback, with the bank also resuming dividend payments by unveiling a 3 cents per share interim payout;
- BP announced second-quarter earnings beat and expanded its dividend and share buyback program;
- BMW raised its profit forecast for 2021 after strong quarterly results, but warned that the global semiconductor chip shortage and rising raw materials prices would impact its performance in the second half of the year;
- Shares of Allianz declined 7% on Monday after the German insurer said that the US Department of Justice had begun an investigation following claims that it failed to safeguard investors’ interest during the coronavirus meltdown;
- In terms of pandemic related developments, the spread of the delta variant seems to be expanding in China as the country reported a total of 90 cases across several regions and in Beijing, where local authorities have discouraged people from travelling.
The summary as at 02.08.21
Global equity markets finished just off all-time highs on Friday with the S&P 500 down -0.37% for the week as growth industries underperformed their cyclicals counterparts. Undoubtedly one of the biggest stories of the week was in Asia where the Chinese government have recently embarked on a widespread regulatory crackdown. This soured sentiment, especially tech, and caused the Hang Seng and CSI 300 to fall sharply. European equities, which are more cyclically focused, outperformed as the Stoxx 600 ended the week marginally higher.
- Asian shares recouped some of their recent steep losses on Monday as beaten-down Chinese markets drew retail bargain hunters;
- Outside of Asia, future on the S&P 500 and those on the Stoxx 50 are also up by around 0.50%;
- Oil prices fell on Monday on worries over China’s economy, concern compounded by a rise in oil output from OPEC producers;
- The official Chinese manufacturing PMI released on Saturday fell from 50.9 to 50.4 in July – the lowest since February 2020 which was the peak of the pandemic related restrictions in China. The Caixin manufacturing PMI released overnight provided a similar message as it dipped to 50.3 from 51.3 last month. Other economies in the region also posted weak manufacturing readings as they grappled with a surge in infections;
- HSBC Holdings reported forecast-beating first-half pretax profit that more than doubled from a weak performance last year. The Bank reinstated dividend payments and released $700 million that had been set aside to cover potential bad loans;
- Square Inc reported a jump of more than 143% in its total net revenue for the second quarter while gross profit increased 91% from a year ago. Meanwhile the company announced plans to buy Australian fintech company Afterpay as it looks to expand further into the booming instalment loan market.
The summary as at 30.07.21
Global equities were once again at all-time highs yesterday, with the MSCI World and Europe’s Stoxx 600 both climbing to fresh records, whilst the S&P 500 closed less than 0.1% away. It was a broad-based advance on both sides of the Atlantic with cyclical industries leading the way, along with energy stocks on the back of a continued recovery in oil prices.
- Overnight in Asia, sentiment was weakened with most indices trading lower. The Nikkei, Hang Seng, Shanghai Comp and Kospi have all lost ground, capping of what’s been a relatively poor performance over the month as a whole for equities in the region;
- US futures are trading markedly lower this morning, amid disappointing economic data. Similarly European stocks are heading for a lower open as investors react to another deluge of corporate earnings and economic data;
- Oil prices declined on Friday, falling for the first time in three sessions amid rising Covid-19 cases globally;
- Economic data was a bit disappointing yesterday, with Q2 US GDP coming weaker than expected, weekly jobless claims falling less than forecast, and pending home sales unexpectedly declining for the first time in four months;
- Amazon saw its shares dip by over –7% in after-hours trading yesterday due to lower earnings forecast than expected and missing on analysts’ revenue expectations. There were also signs that consumers, especially in the US, were shifting back to in-store shopping at higher rates than expected;
- Robinhood Markets Inc’s shares closed more than 8% lower at $34.82 per share on their first day of trading after being priced at $38 in the IPO;
- L’Oreal on Thursday reported an acceleration in second-quarter sales growth in part due to a surge in US makeup sales as lockdowns eased;
- BNP Paribas reported a 26% annual rise in net profit for the second quarter to €2.9 billion, exceeding market expectations on the back of a rebound in business activity;
- Renault posted a quarterly net profit of €354 million for the first half of the year, up from a substantial loss of nearly €7.3 billion for the same period last year. The automaker forecast a full year profit in 2021 despite the challenges caused by the global semiconductor shortage;
- Israel will be the first country to widely disperse booster shots of the Covid-19 vaccine, with the country giving third Pfizer shots to those over the age of 60.
The summary as at 29.07.21
A non-eventful Federal Reserve meeting characterised yesterday’s trading session with the market ending toward the flat line.
- Overnight in Asia, markets have advanced strongly with the Hang Seng and Shanghai Comp posting robust gains, thanks to easing fears about China’s recent regulatory crackdown supporting the move;
- Futures on the S&P 500 are marginally down this morning while European markets are set for a muted open;
- Oil prices slipped but remained near $75 per barrel on Thursday as crude stockpiles in the US fell last week to their lowest since January 2020 and imports and production dropped;
- Bloomberg reported on Wednesday night that China’s securities regulator held a meeting with executives from major investment banks, with some leaving with the message that the crackdown on the private education industry wasn’t intended to hurt companies elsewhere;
- The Federal Reserve’s latest policy decision proved to be a much tamer event than the last meeting. Chair Powell did say however that the committee has taken a “first deep dive” into how to go about tapering asset purchases, but also that no decisions have yet been made;
- Facebook provided a beat on both sales and profits. However, the company forecasted that a new rule from Apple could hurt data collection on mobile devices that will ultimately hurt Facebook’s ad revenues. The company’s share price was down –3.5% in after-hours trading;
- PayPal shares fell as much as 8% in extended trading on Wednesday after reporting second-quarter earnings that were weaker than analysts had expected;
- Boeing announced a profit for the first time in two years with an EPS of $0.40 (vs. -$0.81 expected) as the company’s cash burn was far lower than expected – $705mn compared to the $2.76bn figure expected. The company has halted job cuts and forecasted increased production over the next few years;
- Airbus sharply raised its forecasts for full-year deliveries and earnings after reporting better-than-expected half-year results on Thursday;
- Pfizer reported Q2 revenues of $19bn, and raised their full-year 2021 revenue guidance to $78bn-$80bn, and anticipated 2021 revenue for their Covid vaccine of approximately $33.5bn. Meanwhile, according to CEO Albert Bourla, the effectiveness of Pfizer’s Covid-19 vaccine steadily declines over time, dropping to about 84% for vaccinated people about four to six months after getting their second dose;
- Today we have an array of date releases, including the advanced reading of Q2 GDP for the US, along with the weekly initial jobless claims and June’s pending home sales. Over in Europe, we’ll get the preliminary reading for German CPI in July and the final Euro Area consumer confidence reading for July;
- Earnings releases will today include Amazon and Mastercard.
The summary as at 28.07.21
Risk-off sentiment prevailed in the market yesterday as the effects of the rout in Chinese equities began to be felt more broadly. By the close of play the S&P 500 and Europe’s Stoxx 600 had both lost ground even if they were off their lows and broadly halved their losses. Meanwhile, it was tech stocks that saw the biggest declines, with the Nasdaq experiencing its worst daily performance since early-May.
- Asian markets are following Wall Streets’ lead this morning, with the Nikkei, Hand Seng, Shanghai Comp and Kospi all down. Various Chinese financial dailies like the China Securities Journal and the Securities Daily are carrying commentaries today to prop up sentiment in Chinese markets;
- Futures on the S&P 500 are marginally down this morning, while those on the Stoxx 50 are slightly up;
- Oil prices climbed on Wednesday after industry data showed US crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases;
- Google’s parent company Alphabet rose +3.0% in after-market trading as the company announced a significant EPS beat of $27.26 (vs. $19.35 est.) on the back of significant growth in three key business lines – YouTube, ads, and cloud services. In the press release, Alphabet cited a “rising tide of online activity in many parts of the world” during Q2;
- Microsoft originally saw a –3.0% loss in after-hours trading, possibly due to investors learning that Microsoft’s cloud-services business, Azure, saw slower growth than expected. However, at the end of afterhours trading, the stock was unchanged after investors were calmed by the company’s forecasts on the ensuing earning call;
- Apple warned that sales growth could be slowing and they are facing supply chains shortages, which could affect production of iPads and iPhones in the coming quarter. The stock was down –2.1% after hours, despite reporting a 50% growth in iPhone sales;
- Kering posted a surge in its attributable net income for the first half after a sharp rebound in total revenue, which was 8.4% higher compared with the same period of 2019;
- Deutsche Bank delivered a better-than-expected second-quarter profit despite a decline in its investment banking revenue and some unexpected costs;
- Banco Santander reported a return to profit in the first half on the back of good volume growth, with loans and deposits up 2% and 4% respectively;
- The IMF maintained their 2021 global growth forecast of +6.0% in their World Economic Outlook Update, whilst upgrading 2022’s growth to +4.9% (vs. +4.4% in April). That said, the maintenance of the overall global growth projection for this year came in spite of a downgrade in their forecasts for emerging market and developing economies, which are now forecast to grow by +6.3% (vs. +6.7% in April), contrary to the advanced economies where they upgraded their forecast this year to +5.6% (vs. +5.1% in April).
- The main highlight today will be the Federal Reserve’s latest decision, along with Chair Powell’s subsequent press conference. The meeting is expected to provide an update on the progress of the taper talks that will refine the likely timeline for an announcement in the coming months.
The summary as at 27.07.21
Markets were in something of a holding pattern much of yesterday as they awaited tomorrow’s Federal Reserve decision and a raft of corporate earnings releases this week. By the end of the session through the S&P 500 and the Dow Jones had both managed to grind out a gain to reach new all-time highs.
- Asian markets are trading mostly up this morning but the Hang Seng fell over 5% in afternoon trade seeing further losses after a more than 4% plunge on Monday on the back of regulatory fears surrounding China’s technology and private education sector;
- Futures on the S&P are marginally weaker while those on the Stoxx 50 are broadly unchanged;
- Oil prices were steady on Tuesday with investors betting tight supply and rising vaccination rates will help offset any impact on demand due to surging Covid-19 cases worldwide;
- Tesla Inc reported earnings well above consensus after the close last night. The company cited robust demand both domestically and abroad, but also added to the drumbeat of supply chain issues. It cited “port congestion” and the “global semiconductor shortage” as key risks that they expect to continue. The company also indicated they plan to keep production “running as close to full capacity as possible” for the immediate future;
- LVMH reported a surge in second-quarter sales after the bell on Monday, as coronavirus restrictions eased the pressure on retail outlets round the world;
- On the data front, the German Ifo’s business climate indicator unexpectedly fell in July, seeing a decline to 100.8, with the expectations measure falling to 101.2. Separately in the US, new home sales in June also fell unexpectedly, coming in at an annualised rate of 676k, which is the lowest number since April 2020;
The summary as at 26.07.21
Risk markets bounced back last week, albeit after a pretty poor Monday. Strong earnings seemed to help and global indices rose to new all-time highs by the end of the week.
- Asian markets started the week on a weaker footing with the exception of the Nikkei which is up more than 1% as it reopened post a pre-weekend holiday. Sentiment has come under pressure due to a widening tech crackdown in China;
- Futures on the S&P 500 are also down as are those on the Stoxx 50. Meanwhile, yields on 10-year US Treasuries are hovering around 1.26%;
- The Chinese government has decided to reform its education tech sector and the new regulations that were released over the weekend ban companies that teach school curriculums from making profits, raising capital or going public;
- Oil prices are lower this morning as concerns about fuel demand from the spread of Covid-19 variants and floods in China offset expectations of tight supplies through the rest of the year;
- Ryanair nudged up its forecast for full-year traffic on strong summer bookings but said fares remained well below pre-pandemic levels as it reported an after-tax loss of €273 million for the three months to the end of June;
- Philips beat analysts’ expectations with a jump in second-quarter core earnings to €532 million as the Covid-19 pandemic continued to spur demand for hospital equipment;
- Cryptocurrencies popped to the top of recent ranges as short sellers bailed out in the wake of a strong week and while traders hoped a handful of positive comments from influential investors might signal a turnaround in fragile sentiment;
- On the pandemic, Dr Anthony Fauci said that the US is moving in the “wrong direction” in combating a new wave of Covid-19, and a booster vaccine shot may be needed especially for the most vulnerable;
- Global PMI data was the main data highlight on Friday and showed a continued momentum in the economy recovery in Europe. The July Euro Area composite PMI came in at 60.6, its highest level in 21 years. The US composite reading was 59.7, which is the lowest since March and is the second monthly decline;
- Russia raised its key lending rate by 100bps in response to growing inflationary concerns after recently recording annual inflation of 6.5%, its highest level since August 2016;
- It will be a very busy week for the markets before the expected August exodus. Clearly the Federal Reserve’s decision on Wednesday is likely to the focal point. On top of that, there are a number of key data releases, including the first look at Q2’s GDP reading for the US (Thursday) and the Euro Area (Friday), whilst earnings reports will include Tesla (today), Alphabet, Apple, Microsoft (all tomorrow), and Facebook (Wednesday).
The summary as at 23.07.21
Investor risk appetite started to show signs of slipping back again after the recent bounce back. Although the EBC dominated attention, some weaker-than-expected US data served to dampen sentiment ahead of next week’s Fed meeting, whilst residual concern about the delta variant’s spread and the prospect of tighter restrictions remained in the background for a number of key economies.
- Asian markets have similarly put in a subdued performance overnight, with the Hang Seng and Shanghai Comp each losing ground, whilst the Kospi and India’s Nifty have made modest gains. In Japan, markets are closed for a public holiday, and outside of Asia, futures on the S&P 500 are also marginally higher;
- Oil prices eased on Friday but were poised to end the week largely steady after rebounding from a sharp drop earlier in the week, underpinned by expectations that supply will remain tight as demand recovers;
- The ECB announced that they expect interest rates to remain “at their present or lower levels until it sees inflation reaching two per cent”. As such, given that the ECB’s latest forecast in June pointed to headline HICP inflation at +1.5% in 2022 and +1.4% in 2023, it’s implying that there’s still a long way to go before rate hikes would be consistent with the inflation outlook;
- Press report indicated that there wasn’t complete consensus on the ECB Governing Council around the new approach, with Bloomberg saying that Bundesbank President Weidmann and Belgian Governor Wunsch were against the new forward guidance and were concerned about making an overly long-term commitment to keeping monetary policy loose;
- Bloomberg News reported Chinese regulators are planning a slew of punishments against Didi, including a fine likely bigger than the record $2.8 billion that Alibaba paid earlier this year. The penalties could also include suspension of certain operations, delisting or withdrawal of Didi’s shares;
- Twitter reported strong quarterly earnings after hours on Thursday, topping analysts’ estimates. Revenue grew 74% year over year in the second quarter, marking the company’s fastest growth since 2014;
- Snap’s second-quarter earnings also bet expectations and the company reported 293 million daily active users, up nearly 5% form the 280 million reported in April;
- Initial jobless claims in the US surprised noticeably to the upside for the week through 17th July, with a 419k reading compared to expectations for 350k. That marked the biggest weekly increase since March;
- The main economic highlight today will likely be the release of the flash PMIs from Europe and the US, which should give us an initial indication whether the growth momentum has been maintained, particularly given the recent uptick in Covid-19 cases and concerns about the delta variant;
The summary as at 22.07.21
The main story on the markets yesterday was the continued recovery after Monday’s rout, as decent corporate earnings releases outweighed investor concern about the rise in Covid cases and the more-infectious delta variant. In fact, by the close of trade, it was almost as though the slump at the start of the week had never happened.
- Overnight, Asian markets have taken Wall Street’s lead with the Hang Seng, Shanghai and Kospi all up. Japanese markets are closed for a holiday;
- Futures on the S&P 500 are marginally higher and those on the Stoxx 50 are registering more consistent gains;
- Oil prices were lower in the afternoon of Asia trading hours after rising more than 4% on Wednesday as improved risk appetite provided support despite data showing an unexpected rise in US oil inventories;
- Multiple sources yesterday reported that top White House advisers broadly support giving Fed Chair Jerome Powell another term. However, no formal decision is expected on the matter until September;
- One of the main highlights today will be the latest ECB decision and President Lagarde’s subsequent press conference. This meeting has assumed an unexpected importance following the release of their Strategy Review earlier this month, which saw the inflation target changed to a symmetric 2%, along with a commitment to forceful or persistent policy easing when the effective lower bound is nearby, as at the moment;
- BHP Group announced this morning that it will be supplying nickel to electric carmaker Tesla, a key raw material used in EV batteries;
- Meanwhile, Telsa will most likely start accepting bitcoin as payments once it conducts due diligence on the amount of renewable energy used to mine the currency, CEO Elon Musk said at a conference on Wednesday;
- ABB, maker of factory drives and robots, doubled its full-year sales outlook on Thursday, in the latest sign of a global manufacturing revival. The improved outlook came after double-digit percentage growth in orders across all its businesses in the second quarter;
- Johnson & Johnson on Wednesday forecast $2.5 billion in 2021 sales for its Covid-19 shot and set a lower production target for the vaccine as lengthy manufacturing problems took a toll.
The summary as at 21.07.21
US markets rebounded yesterday, making up most of Monday’s losses as the S&P and Nasdaq gained 1.5% and 1.6% respectively. Earnings reports continued with Netflix, UBS and United Airlines reporting their quarterly numbers. US 10-year Treasury yields were flat at 1.21%. European indies also climbed more than 0.5%.
- Sentiment has again turned a touch weaker in the Asian session this morning as the markets in the region are mixed. The Nikkei and Shanghai Comp are posting gains but are off their intraday highs while the Hang Seng and Kospi are down after erasing early gains;
- Futures on the S&P 500 are broadly flat but those on the Nasdaq are slightly down;
- Oil prices recovered some of their losses from Monday, managing to claw back a bit of ground after the losses following the OPEC+ agreement. Meanwhile prices are back down this morning;
- ASML, one of the biggest suppliers to semiconductor companies worldwide, reported on Wednesday a 38% jump in second-quarter net income to €1.03 billion, as sales continued to soar amid a global computer chip shortage. ASML hiked its outlook for 2021 sales growth to 35%, after already tripling it to 30% in April;
- White House officials yesterday announced that they are starting to get signals that the chip shortages may be easing, including commitments from some auto and semiconductor manufacturers. The chip shortage has been a large driver of the inflation story due to its impact on used car prices;
- Netflix’s quarterly forecast for paid subscriber additions was far below what analysts had expected. In the earnings call, the company management asked investors to use 2019 as a comparison for user growth rather than 2020 to avoid base effects;
- United Airlines reported its sixth consecutive quarterly loss on Tuesday due to the coronavirus pandemic, though revenue quadrupled from a year ago and topped estimates with a strong domestic travel rebound. The company said it will continue ramping up flying in the third quarter and forecast its total unit revenue for the period will be higher than the same quarter in 2019, a turning point for the airline;
- Jeff Bezos, founder of Amazon and three passengers reached the edge of space and safely returned after a flight of just over 10 minutes that the billionaire businessman hopes will kick-start an expansive new era for huma space travel;
- Tesla Inc plans to open its network of superchargers to other electric vehicles later this year, Chief Executive Officer Elon Mush said on Twitter;
The summary as at 20.07.21
US markets started the week with the biggest drop of the year amid a sell-off over concerns about rising Delta variant cases. The S&P and Nasdaq shed 1.6% and 1.1% respectively as the new Covid-19 numbers seem to be overshadowing strong earnings releases. European indices also nosedived, with overall loses in the region of 2.5%.
- Asian stocks were down early on Tuesday as growing fears the spreading Delta variant of the coronavirus would harm the global economic recovery sent riskier assets, including oil, skidding sharply. Meanwhile stock futures climbed in early morning trading on Tuesday;
- Oil prices stabilised after slumping around 7% on Monday amid worries about future demand and after an OPEC+ agreement to increase supply;
- China kept unchanged its benchmark lending rate for corporate and household loans despite growing expectations for a cut after a surprise lowering of bank reserve requirement;
- UBS posted a 63% rise in second-quarter net profit, as buoyant markets continued to help the world’s largest wealth manager generate higher earnings from managing money for the rich;
- Apple has decided to push back its return to office deadline by at least a month to October at the earliest, due to rise in the Covid infections across many countries;
- On the pandemic front, the US raised its travel warning to the UK, asking residents not to travel to the nation on back of the rise of cases in the UK.
The summary as at 19.07.21
Risk markets took a step back last week as the highest US inflation reading in nearly 13 years weighed on investors as they wait to see what messages corporates convey during earnings calls over the next few weeks. Overall, the S&P 500 fell -1% over the week while tech experienced larger losses as the Nasdaq decline -1.9%, however, the real laggard were small caps with the Russell 2000 decreasing -5.12%. European equities traded similarly as the Stoxx 600 ended the week –0.64% lower, with bourses such as the IBEX, FTSE 100, CAC and FTSE MIB all underperforming.
- In Asia, sentiment is continuing to be weighed down by concerns surrounding the spread of the delta variant and inflation risks. The Nikkei, Hang Seng, Shanghai Comp and Kospi are all trading lower. Future on the S&P 500 and Stoxx 50 are also trading weak;
- Oil prices are down around 1% this morning after OPEC+ came to an agreement on supply increases after Saudi Arabia and UAE in particular bridged their differences, with the UAE allowed to boost output more than originally anticipated whilst production cuts for several other countries planned from May 2022 will be done from a higher base;
- The UK will today lift all legal covid restrictions with cases surging through the population. This UK experiment could show a pathway back towards normality or it could be a warning to even heavily vaccinated countries that covid will be a problem for a decent length of time still;
- Turning to the latest on the Pandemic, Singapore reported cases at an 11-month high yesterday while Thailand reported 11,784 new infections, the highest single-day increase since the pandemic began. In Australia, Sydney has paused work at construction sites as it tries to bring the current outbreak under control. The list of athletes and support staff infected with the virus is also increasing at the Tokyo Olympics with the number now standing at 55;
- Zoom Video Communications Inc announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 Inc in its largest ever acquisition, as competition intensifies in its core videoconferencing sector;
The summary as at 16.07.21
US markets dropped even as labour markets and earnings signalled a recovery. The S&P posted a loss of 0.3% while Nasdaq slid 0.7%. European indices also closed in deep red with the FTSE, DAX and CAC down approximately 1% each.
- Asian markets are following the US markets lower this morning, with equity markets for the most part in red and the Nikkei in particular down close to 1%. Futures aren’t offering much help in the way of direction meanwhile, wrapped around unchanged on both sides of the pond;
- Oil prices were little changed in the morning of Asia trading hours after falling by over 2% yesterday;
- Initial jobless claims for the week ending July 10 fell to a post-pandemic low of 360k, though this was slightly above the 350k expected and the previous week saw an upward revision of +13k;
- St Louis Fed President Bullard said in an interview that the economy is red hot and inflation is more persistent than it should and that at this point it makes no sense to continue with the exceptional easing measures. Meanwhile Treasury Secretary Janet Yellen cautioned that prices could continue to rise for several more months, though she expects the recent startling inflation run to ease over time;
- Japan’s central bank downgraded its real GDP forecast for 2021 to 3.8% growth, as compared with the 4% growth forecast made in April;
- Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract chipmaker and a major Apple Inc supplier signalled on Thursday plans to build new factories in the United States and Japan, riding on a pandemic-led surge in demand for chips that power smartphones, laptops and cars;
- Morgan Stanley joined peers beating earnings expectations on Thursday, as the Wall Street bank got a boost from record investment banking activity even as the trading bonanza that supported results in recent quarters slowed down;
- Moderna Inc will join the S&P 500 index as of the start of trading on July 21, replacing Alexion Pharmaceuticals. The Covid-19 vaccine maker’s stock has surged over 150% this year, elevating its market capitalization to about $100 billion.
The summary as at 15.07.21
Equities were fairly subdued yesterday as they hovered around their record highs, with the S&P 500 and Europe’s Stoxx 600 both within 0.25% of their all-time highs.
- Asian markets have seen a divergent performance this morning, with the Shanghai Composite, the Hang Seng and the Kospi advancing, whereas the Nikkei has lost ground overnight. Futures on both US and European equities are also pointing slightly lower;
- Oil prices eased following news that the OPEC+ group is moving towards a new agreement that would allow the UAE to increase its output limit next year and allow the entire group to increase supply this summer;
- China’s second–quarter economic growth fell just short of forecasts on an annual basis, with GDP growth slowing to 7.9% form a year earlier. That said, data for June specifically surprised to the upside, with retail sales coming in a ta year-on-year growth rate of +12.1% (vs. +10.8% expected), while industrial production was up +8.3% (vs. +7.9%) expected, so that should help to alleviate concern among investors that there’s a slowdown in growth taking place;
- In testimony to the US House of Representatives Financial Services Committee, US Federal Reserve Chairman Jerome Powell said the US economy was “still a ways off” from levels the central bank wanted to see before tapering its monetary support. He also reiterated his confidence that recent price hikes are associated with the country’s post-pandemic reopening and will fade;
- In the UK, the CPI reading for June came in at +2.5% (vs. +2.2% expected), which is the fastest inflation has been in nearly 3 years. Following the release, gilts underperformed other European sovereign bonds as investors brought forward the timing of a potential BoE rate hike;
- Earnings season continued on Wednesday with strong results of banks like Bank of America and other corporations. However, stock reactions remained tempered;
- On the pandemic, the UK government successfully hit its target of fully vaccinating two-thirds of the adult population by July 19, with 66.7% having now received both doses;
The summary as at 14.07.21
The S&P 500 and Nasdaq ended lower on Tuesday after hitting record highs earlier in the session, with investors digesting a jump in consumer prices in June and earnings from JPMorgan and Goldman Sachs that kicked off the quarterly reporting season.
- Equity markets in Asia have lost ground this morning with the Nikkei, the Hang Seng, the Shanghai Composite and the Kospi all moving lower, as are futures in the US;
- Oil prices steadied after data showed that China’s first-half crude imports dropped 3% from January to June versus a year earlier. They surged more than 2% on Tuesday after the International Energy Agency said the market should expect tighter supply due to disagreements among major producers;
- The US CPI reading for June came in at an incredibly strong +0.9% month-on-month which is the fastest monthly gain in prices since 2008, and above every economist’s expectation on Bloomberg. In turn, that sent the year-on-year CPI print up to +5.4% which is also the strongest since 2008;
- The Reserve Bank of New Zealand on Wednesday became the latest central bank to plot an end to pandemic-era policy, as it surprised markets by announcing it would end its bond purchase programme from next week;
- Goldman Sachs Group Inc & JPMorgan Chase reported higher-than-expected quarterly earnings. The latter suffered from a well-flagged slowdown from last year’s record-breaking trading results. Citigroup, Wells Fargo & Co and Bank of America are due to report their quarterly results later today;
- PepsiCo Inc raised its full-year earnings forecast, betting on accelerating demand as Covid-19 restrictions continue to ease;
- The Federal Aviation Administration said late on Monday that some undelivered Boeing 787 Dreamliners have a new manufacturing quality issue;
- Apple Inc is working on a service that will let users pay for purchased in instalments.
- Volkswagen raised its long-term profitability target in a sign of the German automaker’s growing confidence in managing the shift to electric and self-driving vehicles;
- Nokia OYJ said it planned to raise its full-year outlook as business picked up pace in the second quarter.
The summary as at 13.07.21
Global equities put in another strong performance yesterday ahead of today’s US CPI release and the start of the latest earnings season, with an advance across multiple regions sending the S&P 500, the Stoxx 600 and a number of other indices up to fresh all-time highs.
- Overnight in Asia, equity indices have followed the US and Europe higher for the most part;
- US futures are pointing modestly lower following yesterday’s record highs, while in Europe markets are heading for a muted open;
- Oil prices climbed on Tuesday, reversing some of the previous day’s losses, as tight supply and expectations of a further draw in US crude inventories provided support, although fears over the spreading Covid-19 variant capped gains;
- China reported a set of stronger-than-expected trade data, with exports up by 32.3% in USD terms in June (vs. +23.0% expected), which in turn sent the country’s trade surplus up to its highest since January, at $51.53bn (vs. $44.75bn expected);
- The EU announced yesterday that they shall put their proposed digital levy on hold as they work to reach a broader agreement on a global corporate minimum tax. That follows the meeting of G20 finance ministers over the weekend in which they endorsed the OECD proposals for a global minimum rate, but there still remain a few holdout countries inside the EU;
- Lumber prices fell to their lowest levels since late-January, with prices down over 60% since their May highs. This comes after a +96.9% ytd gain to those May highs;
- The UK confirmed that the restrictions in England would be eased next week, with legal limits on social contact removed, in spite of the fact that cases are continuing to rise with the delta variant now dominant;
- The US Food and Drug Administration revised its fact sheet on the Johnson & Johnson vaccine to include a warning on the risk of a rare condition in which the immune system attacks the nerves;
- The main economic highlight today will be the June CPI release from the US.
The summary as at 12.07.21
A +1.13% gain on Friday led the S&P 500 to finish the week up +0.40% at a new record high. The Nasdaq Composite rose +0.43% on the week, having now gained in 7 of the last 8 weeks. In Europe, equities were similarly subdued until Friday with the end-of week-rally helping the Stoxx 600 increase +0.19%. Asian equities struggled for a second straight week as the CSI 300 index and the Hang Seng in particular lagged as China proposed new rules to regulate companies seeking to IPO abroad.
- Overnight in Asia, equity markets have started the week on the front foot with the Nikkei, Hang Seng, Kospi and Shanghai Comp all moving higher, although S&P 500 futures have lost ground somewhat. Meanwhile European markets are set for a mixed open;
- Oil prices steadied on Monday after ending a volatile week with a bounce as U.S. inventories tightened. Dealers are still uncertain about the outlook for supplies after OPEC talks on restrictions broke down;
- Earnings season will begin to get going this week, with a number of US financials reporting, among others. Among the highlights include JPMorgan Chase, PepsiCo and Goldman Sachs tomorrow;
- China releases figures this week on economic growth, trade, retail sales and industrial output amid concerns they could underwhelm given the sudden easing in policy last week;
- In terms of the virus, the UK will continue to be watched closely today as we’ll get formal confirmation later as to whether the planned easing of restrictions will go ahead on July 19. Attention will also focus on the Netherlands with a remarkable 800% rise in weekly cases on Saturday and to the highest levels since Christmas;
- European Central Bank President Christine Lagarde caught markets by surprise on Monday, saying the bank will change its guidance on policy at its next meeting and show it is serious about reviving inflation.
The summary as at 09.07.21
US markets tumbled more than 1% from their record levels on a possible risk-off sentiment before staging a small comeback. Treasury yields dipped to 1.25% before recovering to end flat at 1.32%. In Europe, the ECB approved a new monetary policy strategy in which it set a symmetric 2% inflation target over the medium term.
- Shares in Asia-Pacific fell in Friday trade as Covid worries resurfaced in the region. Japan declared its fourth state of emergency and banned spectators from most Olympics events while in South Korea, the greater Seoul area will be placed under the toughest social distancing rules;
- US stock futures were flat in overnight trading Thursday after the major indexes fell amid concerns of a slowdown in economic growth;
- Oil prices were mixed on Friday after a boost from a drop in US crude inventories, but were still set for a weekly decline on concerns that an OPEC+ impasse could swell global crude supplies;
- The ECB changed their inflation goal from the earlier “below, but close to 2%” to a “symmetric 2% inflation target” over the medium term meaning that both negative and positive deviations from the target are equally undesirable. It also said that it would allow consumer prices to overshoot when deemed necessary;
- The latest US jobless claims report released Thursday also indicated a potential slowdown in the labour sector as first-time applicants for unemployment benefits unexpectedly jumped to 373,000 in the week ending 3rd July;
- Airbus delivered 297 airplanes in the first half of the year after a surge of handover activity in June. Deliveries rose 52% in the first six months from 196 at the mid-way point of 2020, and compared with a total of 389 in the first half of 2019.
The summary as at 08.07.21
The main story for markets yesterday was once again the continued retreat of the reflation trade which led to another big rally for sovereign bonds. For equities it was a mixed picture, but in keeping with concerns about the recovery from the pandemic, some of the most Covid-sensitive assets were among the worst hit.
- Asian stocks fell to a six-week low on Thursday as an extended selloff in tech shares in Hong Kong and rising virus cases added to a broad risk-averse mood, pressuring oil prices and lending support to bonds and the dollar;
- Futures contracts tied to the major US stock indexes fell in early morning trading Thursday after both the S&P 500 and Nasdaq Composite closed at records. The same pattern was observed in European markets ahead of the open;
- Oil was weak for a third day amid anxiety about a rise in supply after talks among producers collapsed this week;
- Minutes from the June Federal Reserve meeting confirmed that the central bank has a wary eye on inflation and is prepared to act, if necessary, even if it still thinks that is a long way off;
- ECB policy makers have agreed to increase their inflation goal to 2.0% and allow prices to overshoot when needed. This in some ways mirrors the Fed announcement at Jackson Hole last summer, and comes as a result of some ECB policy makers fearing that the current phrasing of “close to 2%, over the medium term” was vague and led to tighter policy expectations sooner;
- China could cut its reserve requirement over the next few weeks amid some recent data surprising on the downside, including the June PMIs;
- On the virus front, the global death toll from Covid-19 exceed 4 million late Wednesday as infections worldwide crossed 185 million, according to data compiled by John Hopkins University.
The summary as at 07.07.21
The S&P 500 (-0.20%) fell back from its all-time high on Friday. However, the intraday moves were somewhat worse with the Index down as much as -0.87% at one point on the back of losses in cyclical industries. Tech firms were a bright spot with the Nasdaq outperforming the S&P and finishing up +0.17%. Over in Europe, all major indexes all witnessed even larger losses than the US.
- Sentiment has failed to improve in Asia this morning, with all major indexes all taking a leg lower. In contrast all Chinese bourses are up this morning. Futures on the S&P 500 are broadly flat while those on Stoxx 50 are marginally up;
- It was another topsy-turvy day for oil yesterday with the commodity initially higher in the morning London session, and WTI futures at their highest levels since November 2014, before collapsing into the NY open and eventually closing just off their lows of the day. Oil prices are largely unchanged in early morning trading;
- There was a strong rally in US bonds yesterday with 10yr yields down –7.6bps to 1.348% by the close. That left the 10yr yield at a 4-month low and follows on from the 5 successive moves lower we saw last week;
- The US services ISM came it at a weaker-than-expected 60.1. In fact, the decline of –3.9pts on the previous month was actually the biggest monthly decline since the height of the pandemic last year, though the reading is still above its levels throughout all of 2019 and 2020, so this is hardly a move towards contraction;
- Shares in ride-hailing giant Didi Chuxing closed down more than 19% on Tuesday, less than a week after the Chinese app listed on the New York Stock Exchange. The fall comes after China announced last Friday that new users in the country would not be able to download the app while it conducts a cybersecurity review of the company;
- Samsung Electronics on Wednesday reported a 53% jump in second-quarter operating profit, beating market estimates on the back of strong chip prices and demand despite lower smartphone sales;
- In terms of the latest on the pandemic, the number of UK Covid-19 cases hit its highest so far of the latest wave, at 28,773, which comes as the government remain on track to lift pretty much all the remaining restrictions in England on July 19. The new health secretary even warned that cases could jump to 100k per day as the country opens up over the summer.
The summary as at 06.07.21
It was a fairly subdued session for markets yesterday with the US out on holiday, though risk assets generally performed strongly as investors reacted positively to the latest services and composite PMI readings from Europe.
- Shares in major Asia-Pacific markets struggled for direction in Tuesday trade as investors reacted to the Australian cental bank’s decision to keep interest rates unchanged. Meanwhile, stock futures on both sides of the Atlantic were hovering around the flat line;
- Oil prices remain in focus, having surged to multiyear highs on Monday, after talks between OPEC and its oil-producing allies, known as OPEC+, were postponed indefinitely. The postponement came as the United Arab Emirates rejected a proposal to extend oil production increase for a second day;
- The Reserve Bank of Australia left the key interest rate unchanged at 0.10% at today’s meeting while indicating that it will do a mild taper of its QE programme after September. However, they are indicating that they don’t expect to hike rates until 2024 which is more dovish;
- The final PMI readings from Europe were generally a little stronger than the flash signal, and the Euro Area Composite PMI hit a 15-year high of 59.5, so no sign yet that growth momentum is slowing down;
- UK Prime Minister Boris Johnson said that he was planning to end legal limits on social contact in England on July 19, with the full confirmation not taking place until Monday July 12 after they review the latest data. Furthermore, he said that the legal obligation to wear a face covering would be taken away, and it would no longer be necessary for the government to instruct people to work from home;
- China’s cybersecurity watchdog suggested Didi Global Inc delay its IPO and urged it to review its network security, weeks before the Chinese ride-hailing giant went public, according to an article in The Wall Street Journal. Meanwhile on Sunday, the agency ordered a suspension of app downloads for Didi after it found the company illegally collected personal user data;
- The $8.7 billion battle for Britain’s Morrisons intensified on Monday when a third private equity group entered the field sending the supermarket group’s share price racing ahead of the value of an offer it recommended on Saturday;
- Today’s data releases include German factory orders for May, the ZEW survey for July, the German and UK construction PMIs for June, Euro Area retail sales for May, and the final June US services and composite PMIs, along with June’s ISM services index.
The summary as at 05.07.21
US markets carved another day and week of gains last Friday on better-than-expected June Non-Farm Payroll data before closing in for a long weekend to celebrate US Independence Day.
- Asian markets are a bit directionless this morning, ahead of the US holiday with the Nikkei and Hang Seng down while the Kospi and Shanghai Comp are up. Futures on the S&P 500 are down slightly while European stocks are expected to open slightly higher;
- Oil prices fell on Monday, with Brent dropping after four days of gains, as investors and traders awaited crucial talks by OPEC+ following disagreement within the group that could lead to major producers pumping up volumes to grab market share;
- Non-Farm Payroll came in at 850k vs. the revised 583k last month and above the forecasted number of 720k. Unemployment was marginally higher at 5.9% vs. 5.8% last month. Overall, the jobs report was sufficiently strong to reassure investors about the recovery, but also not so strong that it triggered worries that the Fed would pare back their stimulus more rapidly than expected;
- China’s Caixin June services PMI came in at 50.3 (vs. 54.9 expected and 55.1 last month), the lowest level since April 2020. Meanwhile Japan’s final services PMI came in at 48.0 vs. 47.2 in flash;
- The stalemate in talks between OPEC+ continued as the UAE has still not stepped into line with the next meeting to break the deadlock scheduled for today. As things stand, all the members of OPEC+ including Russia have agreed that the group should increase production over the next few months, but also extend its broader agreement until the end of 2022 for the sake of stability while, the UAE is against the extension of the deal, supporting only a short-term increase and demanding better terms for itself for 2022.
The summary as at 30.06.21
An uneventful session on Wall Street saw the S&P 500 edge up to yet another record high to remain well on track for a 5th consecutive quarterly gain, whilst Europe’s Stoxx 600 recovered somewhat from Monday’s losses as well to end the session less than 1% away from its own all-time high.
- Overnight in Asia, markets are a bit directionless while future on the S&P 500 are marginally higher;
- Oil increased moderately following Monday’s losses with Brend crude and WTI futures continuing to trade near 2-year highs;
- Bitcoin continued to stage a recovery, seeing a +4.30 % rise yesterday to almost move back into the green for the month up over +15% since Saturday;
- Economic sentiment in Europe hit a 21-year high in July while in the US consumer confidence rose to a post-pandemic high in June;
- China’s official June composite PMI softened to 52.9 with the services PMI contributing a big part to that softening. The Manufacturing PMI printed broadly in line with expectations;
- On the pandemic side, the situation in the UK has continued to deteriorate, with a further 20,479 cases being reported yesterday, which marks a second consecutive day with over 20k cases reported. The total number of cases reported in the last 7 days is now up +73% relative to the previous week although the age profile of cases is now lower thanks to the vaccination programme;
- Moderna announced that its vaccine did produce protective antibodies against the delta variant in an initial study. The company’s shares rose +5.2% to a new record close following the news;
- United Airlines unveiled its largest-ever order for Boeing and Airbus jets on Tuesday, lining up 270 planes in a push for post-pandemic growth with bigger jets for domestic flying;
- Facebook closed above $1 trillion in market capitalization for the first time on Monday after a favourable legal ruling that dismissed an antitrust complaint brought by the US Federal Trade Commission and a coalition of state attorneys general.
The summary as at 28.06.21
US markets carved out another winning week with the S&P ending higher by 2.7% to another record while the Nasdaq advance by 2.4%. The gains came on the back of weaker than expected inflation data and President Biden securing an infrastructure agreement with lawmakers.
- Asian markets are trading flattish to slightly lower this morning. For the Hang Seng, the morning session was suspended due to a rain storm warning. Meanwhile, future on the S&P and on European stocks are hovering above the flatline as well;
- Oil prices briefly notched highs last seen in October 2018 on Monday ahead of the OPEC+ meeting this week and as the US and Iran remain at odds over the revival of the nuclear deal halting an expected spike in Iranian exports;
- Incumbent French President Macron and far-right leader Marine Le Pen, who lead national polls, look set for poor performances in a regional ballot held yesterday. Macron’s LREM group is likely to get only 6.7% of votes to renew metropolitan councils, according to exit polls while Le Pen’s National Rally is on track for around 20%, a worse showing than in the last regional election in 2015 where they got 27%;
- The UK has restricted an affiliate of crypto exchange Binance from doing business in the country;
- Tesla will recall 35,665 imported Model 3 and Model Y electric vehicles in China. Some of the affected vehicles, produced in 2019, have defective cruise control systems that may activate by mistake, causing the vehicle to accelerate, ultimately resulting in potential safety hazards;
- From an economic data point of view, the main highlight of the week will be payrolls on Friday and the flash Euro Area CPI for June scheduled for Wednesday. In politics, we have the 100th anniversary of the Chinese Communist Party on Thursday;
The summary as at 25.06.21
It was another buoyant day for markets yesterday, with US equities reaching fresh all-time highs as an infrastructure deal was finally reached by President Biden and a bipartisan group of Senators. Europe’s Stoxx 600 similarly had its best day in over a month to close less than 1% shy of its own record.
- Asian shares rose on Friday, tracking gains on Wall Street overnight that lifted the Nasdaq and the S&P 500 indexes to record highs. Meanwhile futures on the S&P 500 are pointing to another new high for the index later today;
- Oil prices climbed to near three-year highs, supported by drawdowns in U.S. inventories and accelerating German economic activity;
- President Joe Biden announced Thursday that the White House struck an infrastructure deal with a bipartisan group of senators which includes roughly $579bn in new spending, and along with the renewal of existing funding the total spend will amount to $1.2 trillion over the next 8 years;
- EU leaders have rejected the proposal from German and France to hold formal talks with Russian President Putin, with the idea removed from the final communique at their summit Brussels;
- In Germany, the Ifo’s business climate indicator rose to 101.8 in June, the highest reading since November 2018. Furthermore, the expectations measures rose to 104.0, its highest level in over a decade, and comes on the back of the strong flash PMIs from Germany the previous day;
- Meanwhile in the US, the releases somewhat underwhelmed expectations, but still pointed to progress on the recovery, as durable goods orders were up +2.3% in May, whilst the weekly initial jobless claims for the week through June 19 fell to 411k;
- The Bank of England pushed back against some of the hawkish speculation that had arisen of late, keeping the Bank Rate at 0.1% stating that the MPC “judges that UK inflation expectations remain well anchored” and that they expected the period of above-target inflation to prove temporary;
- Nike Inc on Thursday forecast fiscal full-year sales ahead of Wall Street estimates, betting on its online business, higher demand as lockdowns ease, and its tried-and-tested strategy of limiting stock for popular products;
The summary as at 24.06.21
As investors digested an array of economic data and central bank speakers yesterday, US equities spend the day trading around their all-time records and Treasury yields moved higher as markets continued to readjust following last week’s selloff in various assets.
- Overnight in Asia, markets are trading mixed with the Nikkei and Kospi advancing, the Hang Seng more towards the flat line which the Shanghai Comp is slightly lower. Elsewhere, US equity futures are pointing to further gains later;
- Brent crude hit a fresh 2-year high yesterday, while WTI was just short of its own recent high. The continued gains for oil come amidst a tightening market, with the EIA in the US reporting that crude oil inventories fell –7.61mn barrels, which is the 5th consecutive weekly decline;
- Other commodities also made gains in addition to oil, with metals including copper rising on the day, along with agricultural prices such as corn and wheat;
- There were fresh headlines on the US-China relationship, as Bloomberg reported the US is likely to impose a ban on some Chinese solar products made in the region of Xinjiang where China has been accused of committing human rights abuses;
- The Euro Area composite PMI came in an above-expected 59.2 yesterday, which marked the strongest pace of growth seen in 15 years for the single-currency bloc. That increase came as the services PMI rebounded strongly, climbing to 58.0 as expected whilst the manufacturing PMI remained unchanged from last month at 63.1;
- On Wednesday, two Fed officials said a period of high inflation in the US could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures;
- There was a geopolitical incident yesterday between Russia and the US in the Black Sea, albeit with the two sides offering different descriptions of what took place;
- Meanwhile, the FT reported that Germany and France had called for the EU to engage Russia more closely, building on the meeting that took place last week between Presidents Biden and Putin. According to the story, Chancellor Merkel and President Macron were in favour of inviting Putin to an EU leaders’ summit;
- Bloomberg reported that Europcar Mobility Group SA has rejected a takeover bid from German Volkswagen, valuing the company at about €2.21bn after concluding the proposal didn’t reflect the company’s value and potential;
- On the pandemic side, there were further signs of concerns in the UK as 16,135 new cases were reported yesterday, which is the highest daily total since February 6. Nevertheless, there was some better news from the country, as data confirmed that over 60% of the adult population had now been fully vaccinated with both doses. Meanwhile, Brazil announced their largest one-day rise in Covid-19 cases yet (115,228) even as the vaccination programs have started to gather momentum.
The summary as at 23.06.21
Markets trended higher on Tuesday building up on the fine start to the week after Powell testified before Congress that the Fed is unlikely to raise rates over only potential rising inflation.
- Asian markets are largely posting gains this morning while futures on the S&P 500 are also up in early trade today;
- US equities continued to advance as the S&P 500 moved to within just quarter of a per cent of last week’s all-time closing high, while the Nasdaq did hit a new record as tech stocks continued to power ahead. There were similar advances in Europe too;
- Oil prices rose on Wednesday after industry data showed US crude inventories fell more than expected, reinforcing views of a tightening supply-demand balance with road and air travel picking up in Europe and North America;
- While Bitcoin ended the session up at $32,903, at one point the cryptocurrency fell beneath $30,000 in trading for the first time since late January. The cryptocurrency is on track for its 3rd successive monthly decline now, and given it started the year at $28,996 it’s not too far away from having erased its entire YTD gains, after peaking at an intra-day high of $64,870 back on April 14;
- Looking ahead, the main highlight today will be the release of the flash PMIs for June. Back in May, the final numbers showed that growth was still maintaining decent momentum, with the Euro Area composite PMI coming in at 57.1, the strongest in over 3 years, while the US composite PMI was at 68.7, which is the strongest since the data goes back in October 2009;
- In his testimony before the House of Representatives’ Select Subcommittee on the Coronavirus Crisis, Fed Chair Powell stuck to the script that said, “a pretty substantial part, or perhaps all of the overshoot in inflation comes from categories that are directly affected by the re-opening of the economy such as cars and trucks.” However, as he mentioned last week, that view requires some level of humility and he acknowledged that those price “effects have been larger than we expected and they may turn out to be more persistent than we expected.”
- Amazon.com Inc’s Prime Day saw strong online sales growth in the United States on Monday even as supply chain constraints and a robust spending appetite limited the level of discounts on popular products like electronics;
- Pernod Ricard said it now expected organic profit growth of around 16% for its 2020/2021 fiscal year, up from a previous April forecast of 10%, as the French drinks group was enjoying a stronger-than-expected recovery;
- In terms of the latest on the pandemic, the White House noted that the US is unlikely to reach 70% of adults with at least one shot by July 4th, however they are likely to get to 70% of all those over the age of 27 by the holiday.
The summary as at 22.06.21
- Overnight in Asia, markets are trading mixed with the Nikkei and Kospi advancing, the Hang Seng more towards the flat line which the Shanghai Comp is slightly lower. Elsewhere, US equity futures are pointing to further gains later;
- Brent crude hit a fresh 2-year high yesterday, while WTI was just short of its own recent high. The continued gains for oil come amidst a tightening market, with the EIA in the US reporting that crude oil inventories fell –7.61mn barrels, which is the 5th consecutive weekly decline;
- Other commodities also made gains in addition to oil, with metals including copper rising on the day, along with agricultural prices such as corn and wheat;
- There were fresh headlines on the US-China relationship, as Bloomberg reported the US is likely to impose a ban on some Chinese solar products made in the region of Xinjiang where China has been accused of committing human rights abuses;
- The Euro Area composite PMI came in an above-expected 59.2 yesterday, which marked the strongest pace of growth seen in 15 years for the single-currency bloc. That increase came as the services PMI rebounded strongly, climbing to 58.0 as expected whilst the manufacturing PMI remained unchanged from last month at 63.1;
- On Wednesday, two Fed officials said a period of high inflation in the US could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures;
- There was a geopolitical incident yesterday between Russia and the US in the Black Sea, albeit with the two sides offering different descriptions of what took place;
- Meanwhile, the FT reported that Germany and France had called for the EU to engage Russia more closely, building on the meeting that took place last week between Presidents Biden and Putin. According to the story, Chancellor Merkel and President Macron were in favour of inviting Putin to an EU leaders’ summit;
- Bloomberg reported that Europcar Mobility Group SA has rejected a takeover bid from German Volkswagen, valuing the company at about €2.21bn after concluding the proposal didn’t reflect the company’s value and potential;
- On the pandemic side, there were further signs of concerns in the UK as 16,135 new cases were reported yesterday, which is the highest daily total since February 6. Nevertheless, there was some better news from the country, as data confirmed that over 60% of the adult population had now been fully vaccinated with both doses. Meanwhile, Brazil announced their largest one-day rise in Covid-19 cases yet (115,228) even as the vaccination programs have started to gather momentum.
The summary as at 21.06.21
European stocks are expected to open sharply lower on Monday, following jitters in global markets over the more hawkish tone from the U.S. Federal Reserve last week. US stock futures slid early Monday morning after the Dow posted its worst week since October.
- Asian markets dropped in Monday morning trade, with Japan’s markets plummeting more than 3%;
- Wall Street ended lower at the close of last week, with the S&P and Nasdaq down 1.3% and 0.9% respectively and resulting in weekly losses of 1.9% and 0.3% respectively. European markets also closed lower by ~1.5%;
- In rates markets, we saw a decline in yields in the long end of the curve in the US, with the 10y yields down 5bp to below the 1.4% handle;
- St Louis Federal Reserve President James Bullard rocked markets on Friday by suggesting his 2022 core PCE inflation forecast of 2.5% as justifying a hike in late 2022;
- The main policy decision this week comes from the Bank of England on Thursday, where economists expect the MPC to remain cautiously optimistic around the recover, keeping the policy rate on hold at 0.1% and maintaining the target stock of QE at £895bn;
- American Airlines said it canceled hundreds of flights this weekend due to staffing shortages, maintenance and other issues, challenges facing the carrier as travel demand surges toward pre-pandemic levels;
- Russia, Germany and Portugal have reported an increasing spread of the delta variant over recent days and the variant continues to make small but growing footholds across Europe;
- French President Macron and far-right leader Marine Le Pen both are likely to have fared poorly in a regional election in France where the turnout was at an all-time low of c.33%;
- Adobe issued an upbeat forecast for its current Q3 after Q2 net income topped year-ago levels and exceeded analysts’ estimates.
The summary as at 18.06.21
The day after a somehow hawkish Fed in the US ended in a way probably no one was expecting with the S&P 500 almost flat, Nasdaq outperformer and a very strong flattening across the US Treasury curve. Meanwhile, futures on the S&P 500 and the Eurostoxx 50 are rather flat this morning while the US dollar is trading largely unchanged.
- Asian markets are mixed this morning with the drop in the Chinese market likely being driven by yesterday’s news that the Federal Communication Commission has proposed a ban on products from Huawei and four other Chinese electronics companies;
- Oil prices fell for a second consecutive day on Friday as the U.S. dollar soared on the prospect of interest rate hikes in the United States, but were nevertheless on track to finish the week flat – only slightly off multi-year highs;
- There was a reasonably big sell-off in other commodities as well yesterday as copper, corn and wheat lost over 3.5% each. This marked the biggest one day drop for copper since this past October, as the large moves in yields and the dollar weighted hard on the industrial bellwether;
- The weekly initial jobless claims from the US for the week through June 12 unexpectedly rose to 412k, up from their post-pandemic low the previous week. That also breaks a run of 6 successive weekly declines in the measure;
- HSBC is set to announce the sale of its retail banking operations in France to private equity group Cerberus on Friday, after struggling to offload a business that will need restructuring;
- On the pandemic, the UK continued to be a source of concern as 11,007 cases were reported yesterday, which is the highest daily total since February 19th. That said, there was some better news from the UK in that 80% of the adult population have now received a first vaccine dose.
The summary as at 17.06.21
European stocks are expected to open lower on Thursday as global markets react to the Federal Reserve’s signal that rate hikes will come sooner than expected. Future on the S&P 500 are also trading lower this morning.
- Asian equities fell to a three-week low on Thursday after the US Federal Reserve stunned investors by signaling it might raise interest rates at a much faster pace than previously assumed;
- Crude oil prices fell on Thursday as the US dollar strengthened after the US Federal Reserve signaled it might raise interest rates faster than expected, but losses were limited by a big drop in US crude oil inventories;
- The Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases, opened talks on how to end crisis-era bond-buying, and said the 15-month-old health emergency was no longer a core constraint on US commerce;
- Markets reacted strongly with US Treasuries selling off sharply as 10yr yields rose +8.3bps to 1.57% on the day after jumping nearly +11bps in the hour following the FOMC announcement;
- Equity markets sold off following the Fed release, but were able to recoup much of those loses by the end of the session;
- President Biden and Russian President Putin agreed on Wednesday to resume stalled nuclear talks and return their ambassadors to their foreign posts, two concrete outcomes that emerged from their summit in Geneva;
- One notable data point out of Europe yesterday was the UK CPI reading, which surprised to the upside at +2.1%, whilst core inflation saw an even bigger upside surprise at +2.0%;
- China’s economic performance surprised to the downside in yesterday’s releases, with retail sales seeing year-on-year growth of +12.4% while industrial production was up +8.8% year-on-year;
- On the pandemic, the UK reported a further 9,055 cases yesterday, which is the highest number since February 25, and will only add to concerns about the spread of the delta variant. Meanwhile, ahead of the summer holiday season, the UK is planning to allow fully vaccinated people to travel to amber-list countries without having to quarantine on their return, the Daily Telegraph has reported;
- CureVac reported that its vaccine was only 47% effective based on preliminary analysis of a large study. This is well short of other mRNA shots though the spreads of different variants of the virus would have played a role in the lower efficacy;
The summary as at 16.06.21
US equities softened yesterday with the S&P 500 down marginally from its all-time high registered the previous day while Europe’s STOXX 600 saw a slightly stronger performance once again, reaching a new all-time high in its 8th consecutive daily advance.
- Asian markets are mostly trading lower this morning while futures on the S&P 500 and those on the Stoxx 50 are trading broadly flat;
- Oil prices hit fresh highs once again yesterday, with both Brent crude and WTI at their highest levels in more than 2 years. They are up a further c. +0.90% this morning.
- US retail sales surprised to the downside in May with a –1.3% contraction, though the previous month’s growth was revised 0.9pp higher to +0.9%;
- US producer prices rose by a stronger than anticipated +6.6% over the last year. However, the sub components with the most impact could again be put down to transitory factor;
- The Federal Reserve will later today be releasing their latest monetary policy decision alongside the all-important dot plot of where FOMC members think the federal funds rate should be in the coming years, as well as their own inflation forecasts;
- The US and the EU came to an agreement at their summit yesterday on a 5-year tariff truce over aircraft subsidies for Airbus and Boeing;
- Attention will today turn to President Biden’s meeting with Russia President Putin in Geneva, which a US official said was expected to last 4-5 hours;
- Germany hit a vaccine milestone yesterday, with Chancellery Minister Braun estimating that the country has surpassed 50% of the population having had at least one jab.
The summary as at 15.06.21
Global equities continued to reach new highs as they await the next catalysts, with S&P 500, NASDAQ, Europe’s STOXX 600 and the MSCI World all climbing to fresh records.
- Overnight in Asia, markets are seeing a mixed performance while futures in the US are pointing to yet further highs for the main indices;
- Sovereign bonds sold off on both sides of the Atlantic yesterday as some jitters set in that the Fed could move to bring forward their timetable for withdrawing policy support;
- Oil prices rose on Tuesday, with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks dragging on over the United States rejoining a nuclear agreement with Tehran;
- The NATO summit yesterday once again demonstrated the deterioration in relations between China and many Western nations after the communique issued said that “China’s stated ambitions and assertive behaviour present systemic challenges to the rules-based international order and to areas relevant to Alliance security”;
- The FT reported overnight that the EU and the US are looking at resolving the trade dispute over Airbus and Boeing, with a deal likely to be a multiyear agreement on subsidy limits;
- Another deal that looks possible is a trade agreement between the UK and Australia, with the BBC reporting that there’ll be a formal announcement today;
- UK Prime Minister Johnson announced that he would be delaying the planned easing of restrictions in England for 4 weeks, so that limits on social gathering would now be removed on July 19, rather than Monday as had previously been hoped;
- Koninklijke Philips announced that it has recalled millions of sleep apnea and ventilator machines over concerns that a type of foam used in the devices could degrade and release harmful, possibly cancer-causing, particles;
- JPMorgan Chase has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said Monday during a conference.
The summary as at 14.06.21
Markets continued to trade risk-on last week as the focus remains on the reopening of economies and the rebound in growth. The S&P 500 was up 0.4% while the Euro Stoxx 50 outperformed and ended the week 0.9% higher. Stocks continue to trade positively this morning.
- Asian markets have started the week on a mixed note as markets in Hong Kong, China and Australia remained closed for a holiday;
- Oil prices rose on Monday, extending three weeks of gains that have been underpinned by an improved outlook for fuel demand as increased COVID-19 vaccinations help lift travel curbs, along with tightness in supply;
- Bitcoin gained over 5% since Friday as Elon Mush said that Tesla would resume transactions with the cryptocurrency when mining is done with more clean energy;
- England is likely to postpone by four weeks the planned full easing of restrictions from next Monday as the Delta variant has led to the country consistently reporting over 7,000 daily cases over the past week for the first time since the end of February;
- Benjamin Netanyahu’s 12-year run in power was terminated as Israel’s parliament voted in a disparate coalition that’s pledged to put aside conflicting political ideologies in order to focus on national imperatives like charting an economic recovery from the coronavirus pandemic;
- The highlight of this week is undoubtedly the FOMC conclusion on Wednesday with tapering discussions, dot plots, latest economic projections and inflation the focus of attention.
- Geopolitics will also be heavily in focus culminating in a meeting between US President Biden and Russian President Putin also on Wednesday.
The summary as at 11.06.21
Futures on both sides of the Atlantic are slightly up this morning after both regions’ markets continue to hover at or around record levels.
- Asian shares were mixed in Friday afternoon trade, following gains overnight on Wall Street that saw the S&P 500 sailing to a record closing high;
- Oil prices slipped on Friday but were set for their third weekly rise on expectations for a recovery in fuel demand in Europe, China and the United States as rising vaccination rates lead to an easing of pandemic curbs;
- The much-awaited US CPI for May came in at 5% YoY vs. expectations of 4.7% and 0.8% higher than the April reading, making it the highest reading since 2008;
- Separate data showed jobless claims, seen as a proxy for layoffs, fell to 376,000 las week, extending a recent decline for unemployment benefits and adding to signs of a healing labour market. Despite the positive data, US 10Y Treasury yields were down 5bp at 1.43%;
- The Governing Council of the ECB left interest rates unchanged yesterday and said that they would continue to conduct their purchases under the PEPP over the coming quarter at a significantly higher pace than the first months of the year. The move to maintain the pace of purchases came in spite of upgrades to their economic forecasts, with growth this year now expected to come it at +4.6% (vs. +4.0% in March), and 2022 growth at +4.7% (vs. 4.1% in March);
- Moderna filed for an Emergency Use Authorisation from the US FDA for its vaccine in the 12–17-year-old group. If approved, it would join the Pfizer vaccine in having been approved for the over-12;
- HSBC Bank Malta this morning announced a strategic initiative related to the transformation and automation of certain areas within the bank, and also to a planned early retirement scheme / transfer of a number of employees and activities to a local service provider.
The summary as at 10.06.21
European stocks are expected to open slightly higher on Thursday as global markets gear up for the latest inflation reading from the U.S.
- Asian shares edged higher but held their recent trading range as investors focused on U.S. inflation data and the risk of an upside surprise that could prompt the Federal Reserve to start tapering its massive stimulus;
- Oil prices fell as inventory data in the United States, the world’s top oil consumer, showed a surge in gasoline stocks that indicates weaker-than-expected fuel demand at the start of summer, the country’s peak season for motoring;
- The European Central Bank is all but certain to maintain a generous flow of stimulus when policymakers meet on Thursday, fearing that higher borrowing costs could smother a still nascent recovery;
- Japan’s wholesale prices rose at their fastest annual pace in 13 years reflecting higher commodity costs, data showed, a sign global inflationary pressures are pinching firms already struggling amid the coronavirus pandemic;
- President Joe Biden on Wednesday withdrew a series of Trump-era executive orders that sought to ban new downloads of WeChat and TikTok, and ordered a Commerce Department review of security concerns posed by those apps and others;
- Stellantis said on Wednesday a French court has charged its Peugeot unit with consumer fraud in a far-reaching diesel emissions probe, ordering the company to provide 30 million euros in guarantees for potential payouts;
- Morrisons became the latest British supermarket group to be targeted by activist shareholders over the amount of unhealthy food it sells;
- Most airliners will rely on traditional jet engines until at least 2050, with the introduction of zero-emissions hydrogen limited to regional and short-range planes, Airbus told European Union officials in a briefing released.
The summary as at 09.06.21
European stocks are expected to open in mixed territory on Wednesday as investors prepare for the next reading of U.S. inflation due tomorrow.
- Japanese equities slipped as investors took profits in shippers and semiconductor firms, with U.S. inflation data in focus as it could influence how soon the Federal Reserve pares its stimulus programme;
- Oil prices rose for a second day on signs of strong fuel demand in Europe, while the prospect of a near-term return of Iranian oil supply faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted;
- The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology;
- China’s factory gate prices rose at their fastest annual pace in over 12 years in May, driven by surging commodity prices, adding to global price pressures at a time when policymakers are trying to revitalise growth following the COVID-19-induced slump;
- Britain will tell the European Union on Wednesday that time is running out to find solutions to ease post-Brexit trade with Northern Ireland, saying any further legal action by the bloc would not “make life any easier” for people in the province;
- French carmaker Renault said on Tuesday that a French court had charged the company with deception over a diesel emissions probe launched in 2017, focused on some of its older vehicles and suspected test manipulations;
- BBVA has reached an agreement with unions to lay off 2,935 employees in Spain, around 12.6% of its banking workforce in its home market, the bank and Comisiones Obreras (CCOO) union said on Tuesday;
- The European Medicines Agency (EMA) does not expect to make a decision on the approval of German biotech group CureVac’s COVID-19 vaccine before August, an official at Germany’s health ministry familiar with the matter told Reuters.
The summary as at 08.06.21
European stocks are expected to open lower on Tuesday as investors look ahead to euro zone growth and employment data for the first quarter, and remain focused on concerns over rising inflation.
- Japan’s stock index Nikkei changed course and inched down, as losses in market heavyweights offset gains in drugmakers after Eisai’s Alzheimer drug received U.S. nod;
- Oil prices lost more ground as concerns about the fragile state of the global recovery in demand for crude and fuels were heightened by data showing China’s oil imports fell in May;
- Japan’s economy shrank at a slower-than-initially reported pace in the first quarter, on smaller cuts to plant and equipment spending, but the coronavirus pandemic still dealt a huge blow to overall demand;
- A report on the origins of COVID-19 by a U.S. government national laboratory concluded that the hypothesis of a virus leak from a Chinese lab in Wuhan is plausible and deserves further investigation, the Wall Street Journal said on Monday, citing people familiar with the classified document;
- U.S. regulators on Monday approved Biogen’s aducanumab as the first treatment to attack a likely cause of Alzheimer’s disease despite controversy over whether the clinical evidence proves the drug works, sending its shares soaring;
- Italian insurer Cattolica said on Monday it had decided to delay a planned 200 million euro cash call to give its shareholders the chance to take up a buyout offer by bigger peer Assicurazioni Generali;
- The European Union is asking financial market participants to suggest legislative changes that would help them transfer clearing in euro derivatives from London to the bloc as Britain’s stock exchange offered an olive branch;
- Airbus delivered 50 airplanes in May, bringing its total so far this year to 220 jets, up 38% from the same period last year, the European plane maker said on Monday.
The summary as at 04.06.21
U.S. stock futures were little changed in overnight trading Friday ahead of the May jobs report.
- Asian stocks followed Wall Street lower as signs of a strengthening U.S. recovery boosted bets for higher inflation and an earlier tapering of Federal Reserve stimulus;
- Oil prices dropped as concerns about the patchy roll-out of anti-coronavirus vaccinations around the globe tempered optimism earlier in the week that demand for fuels was recovering from the depths of the pandemic;
- U.S. President Joe Biden offered to scrap his proposed corporate tax hike during negotiations with Republicans, two sources familiar with the matter said on Thursday, in what would be a major concession by the Democratic president as he works to hammer out an infrastructure deal;
- President Joe Biden signed an executive order on Thursday that bans U.S. entities from investing in dozens of Chinese companies with alleged ties to defense or surveillance technology sectors, a move his administration says expands the scope of a legally flawed Trump-era order;
- The U.S. Department of Justice is elevating investigations of ransomware attacks to a similar priority as terrorism in the wake of the Colonial Pipeline hack and mounting damage caused by cyber criminals, a senior department official told Reuters;
- Rio Tinto has made its first Aboriginal board appointment, hiring former Western Australian state treasurer Ben Wyatt as it strives to rebuild its reputation following last year’s destruction of the Juukan Gorge rockshelters;
- Italy’s biggest insurer Assicurazioni Generali has submitted a non-binding offer for the asset management arm of Dutch insurer NN Group, two sources close to the matter said on Thursday;
- Ryanair may decline to accept delivery of its first Boeing 737 MAX jet until after the summer following a delay in the certification of a version of the jet designed for the airline, a senior executive said on Thursday.
The summary as at 03.06.21
European stocks opened slightly higher on Thursday with markets set to follow an upbeat tone set in Asia-Pacific overnight.
- Japanese shares rose, with broad Topix index hitting a more than six-week high, as a pickup in the country’s vaccination drive raised hopes of the economy recovering from the shackles of the pandemic;
- Oil prices rose for a third day on expectations for a surge in fuel demand, particularly in the United States and Europe and China, later this year at the same time major producers are maintaining supply discipline;
- Exxon Mobil Corp shareholders elected a third director nominated by hedge fund Engine No. 1 to the oil company’s board, the company said on Wednesday, extending the firm’s upset victory at one of America’s top energy corporations;
- China’s services sector expansion slowed in May, a private sector survey showed, with weaker overseas demand and increased costs putting pressure on businesses;
- British finance minister Rishi Sunak said a U.S. proposal to focus on the world’s 100 biggest and most profitable firms as part of a global tax deal could work but he insisted that big tech firms must pay more tax in countries where they operate;
- Thousands of BBVA employees on Wednesday held a one-day strike called by several Spanish unions to protest against the bank’s plans for layoffs;
- Orsted, the world’s largest offshore wind farm developer, is ramping up its investment in renewables to $57 billion by 2027, seeking to become a global leader in green energy and fend off growing competition;
- Morphosys on Wednesday said it will acquire U.S. cancer specialist Constellation Pharmaceuticals for $1.7 billion to add an advanced experimental cancer drug and broaden its drug development, prompting a slump in its shares;
- Turkey’s currency sank to all-time lows on Wednesday after President Tayyip Erdogan said he had urged the central bank’s governor to cut interest rates in the next two months despite rising inflation, in the latest blow to the bank’s credibility.
The summary as at 02.06.21
European stocks are expected to see a cautious start to the trading day on Wednesday, continuing a lacklustre start to trading in June.
- Japanese shares advanced as the hospitality sector gained after accelerating vaccinations boosted economic reopening hopes, while shares of carmakers scaled new highs due to stronger global demand;
- Oil prices rose after OPEC and its allies stuck to their plan to cautiously return oil supply in June and July while expecting fuel demand to rebound strongly during the U.S. summer;
- The U.S. Commerce Department is failing to do its part to protect national security and keep sensitive technology out of the hands of China’s military, according to a U.S. congressional advisory report seen by Reuters;
- The World Health Organization said on Tuesday it has approved a COVID-19 vaccine made by Sinovac Biotech for emergency use listing, paving the way for a second Chinese shot to be used in poor countries;
- Stellantis might pick Italy to build a new gigafactory in Europe, to support its expansion into electric mobility, as the carmaker is discussing conditions of the project with Rome, a source close to the matter said on Tuesday;
- The European Union is preparing sanctions on Belarus’ national airline and around a dozen top Belarusian aviation officials, three diplomats said, a stop-gap measure before economic sanctions following the forced landing of a passenger plane;
- Zoom Video Communications Inc on Tuesday forecast current-quarter revenue above estimates, as increased adoption of hybrid work models by companies is expected to drive steady demand for its video conferencing tools;
- Italy’s top insurer Generali is expected to launch its takeover bid for smaller rival Cattolica between late September and early October, a source close to the situation said on Tuesday, adding the buyout offer would end in November.
The summary as at 01.06.21
European markets are set for a mixed open on Tuesday after closing out their fourth straight month of gains, with a host of economic data out of the euro zone coming into view.
- Most Asian stock markets rose, while gold flirted near five-month highs ahead of European and U.S. data this week that will likely offer clues on the health of the global economy;
- Oil prices rose, with Brent topping $70, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world’s top oil consumer;
- Asia’s factory activity continued to expand in May thanks to an ongoing recovery in global demand, surveys showed, though rising raw material costs and supply chain constraints clouded the outlook;
- Finance ministers from the group of seven rich nations (G7) will vow this week to support their economies as they emerge from the pandemic and reach an “ambitious” deal on a minimum global corporate tax in July, a draft communique showed;
- A deal on an intellectual property waiver for COVID-19 vaccines at the World Trade Organization (WTO) was no closer to acceptance on Monday despite Washington’s backing, due to expected scepticism about a new draft, sources close to the talks told Reuters;
- A large majority of Atlantia’s investors on Monday backed the sale of the group’s stake in its motorway unit to Italian state lender CDP and allies, drawing a line under a dispute triggered by a deadly bridge collapse in 2018;
- An Indian court on Monday ordered officials to inspect coronavirus-related safety protocols at Renault-Nissan’s Tamil Nadu car plant, where workers are on strike over allegations that social distancing rules are not being followed;
- BP and Eni are in talks over the future of their oil and gas assets in Algeria as the two groups increase efforts to refocus their businesses to tackle falling margins, rising debt and climate pressures, three sources said.
The summary as at 31.05.21
European markets are set to open in the red Monday ahead of inflation data for some of the region’s biggest economies.
- Asian shares were trying to extend their recent rally to a third week in the hope U.S. jobs figures show the expected revival in hiring in May and keep the global recovery on track;
- Oil prices climbed, underpinned by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week for supply guidance;
- China’s factory activity slowed slightly in May as raw materials costs grew at their fastest pace in over a decade, weighing on the output of small and export-oriented firms;
- American tire manufacturer Goodyear Tire & Rubber Co is facing accusations of unpaid wages, unlawful overtime and threats to foreign workers at its Malaysian factory, according to court documents and complaints filed by workers;
- Intel’s CEO said it could take several years for a global shortage of semiconductors to be resolved, a problem that has shuttered some auto production lines and is also being felt in other areas, including consumer electronics;
- Workers at the Renault-Nissan plant in southern India will not report for work over coronavirus-related safety concerns, according to a union letter to the company seen by Reuters, and two sources familiar with the matter;
- Volkswagen plans to change its management structure and install two new chief operating officers to oversee its premium brands and volume brands, Automobilwoche reported on Sunday without naming its sources;
- British telecoms group Vodafone will build a global research and development centre for 5G and 6G technologies and for automotive solutions in Dresden, Germany, it said on Sunday.
The summary as at 28.05.21
European stock markets are seen opening largely higher Friday, continuing the strong gains from the previous session as optimism over the region’s outlook strengthens as it gradually gets to grips with the Covid-19 pandemic.
- Asian stocks put global equities on course for a seventh day of gains as investors bet the U.S. will lead the world out of the COVID-19 pandemic, with the focus turning to a multi-trillion-dollar spending boost by the Biden administration;
- Oil prices pushed higher, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, while concerns eased about the impact of any return of Iranian supplies;
- U.S. Senate Republicans unveiled a new $928 billion offer to revitalize America’s roads, bridges and broadband systems on Thursday, which fell well short of President Joe Biden’s latest infrastructure proposal but proved substantial enough to keep negotiations alive;
- The U.S. Senate on Thursday advanced a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology, as Congress increasingly seeks to take a tough line against Beijing;
- Japan’s unemployment rate crept up and job availability slid in April, data showed, underscoring the pain the country’s prolonged battle with COVID-19 is inflicting on the economy;
- The head of Europe’s Airbus urged suppliers to prepare industrially and financially for steep increases in jet output floated earlier on Thursday, and said the industry was returning towards pre-crisis trends for its most popular airplanes;
- Several Total shareholders plan to demonstrate their concern that the French firm is not doing enough to curb carbon emissions at its shareholder meeting, as global oil and gas companies come under growing environmental pressure;
- Mediaset shareholders agreed on Thursday to ditch a loyalty share scheme at the Italian broadcaster as part of a wider deal struck earlier this month to end a dispute with its second-largest investor, French media group Vivendi.
The summary as at 27.05.21
European stocks are expected to open flat on Thursday as investors await U.S. weekly jobless claims data.
- Asian shares fell on fears central banks were closer to considering winding back their emergency stimulus while the dollar held at a one-week top;
- Oil prices fell but stayed within the tight range they have been in all week, as optimism on the summer driving season in the United States and Europe offset concerns about demand in India and a potential supply increase from Iran;
- President Joe Biden ordered aides to find answers to the origin of the virus that causes COVID-19, saying on Wednesday that U.S. intelligence agencies are pursuing rival theories potentially including the possibility of a laboratory accident in China;
- Earnings at China’s industrial firms grew at a slower pace in April, with high commodity prices and weaker performance in the consumer goods sector limiting overall profitability from manufacturing;
- U.S. Trade Representative Katherine Tai said on Wednesday that the United States still faces “very large challenges” in its trade and economic relationship with China that require the Biden administration’s attention across the board;
- Shareholders rebuked the top two U.S. oil companies on Wednesday for dragging their feet on fighting climate change, while a Dutch court ruled that Royal Dutch Shell needs to accelerate cuts to greenhouse gas emissions;
- HSBC announced it is withdrawing from U.S. mass market retail banking by selling some parts of its business and winding down others, in a long awaited move as the lender pushes ahead with a shift in focus to Asia, its biggest market;
- Bayer said on Wednesday it will review the future of its Roundup and other glyphosate-based weed killers in the U.S. residential market after a judge rejected a $2 billion plan to settle future claims alleging the herbicide causes cancer.
The summary as at 26.05.21
European share markets are expected to open in positive territory this morning as US stock futures are pointing to a higher open as well.
- Asian shares rose on Wednesday and the US dollar languished near multi-month lows after US Federal Reserve Officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation;
- Oil was little changed as traders weighted expectations of improving demand in the US against the possibility of new supply from Iran;
- Fed Vice Chair Clarida reiterated much of what was said in last week’s release of the April Fed meeting minutes, saying that it’s possible that “in upcoming meetings, we’ll be at the point where we can begin to discuss scaling back the pace of asset purchases.”;
- In terms of economic releases, there were a number of data points that surprised to the downside out of the US with the Conference Board’s consumer confidence index falling to 117.2 in May, marking the first decline year-to-date while new home sales fell to an annualised rate of 863k amidst a big surge in prices;
- On the political front, the White House confirmed that President Biden would be meeting Russian President Putin in Geneva on 16th June in their first in-person meeting since Biden’s inauguration and comes amidst tensions between the two sides over a range of issues;
- On the pandemic side, Moderna’s vaccine was found to be between 93% and 100% effective at preventing symptomatic Covid among 12-17 year olds, opening the prospect that it will soon join the Pfizer vaccine in being cleared by the US for younger age groups;
- The Reserve Bank of New Zealand held interest rates at a record low on Wednesday but hinted at a hike as early as September next year, sending the New Zealand dollar soaring more than 1%;
- Volkswagen has received a €7.5 billion offer for Lamborghini by Switzerland’s Quantum Group AG, British weekly magazine Autocar reported on Tuesday, though VW’s Audi said the supercar brand was not for sale.
The summary as at 25.05.21
European stocks are expected open flat on Tuesday, following the strong performance of equities markets yesterday.
- Asian shares climbed, tracking a Wall Street rally overnight, while the dollar fell, as investors tempered fears about inflation-driven rate hikes;
- Oil prices rose for a third day, holding around one-week highs after jumping more than 3% the previous session as investors tempered previous expectations of an early return of oil exporter Iran to international crude markets;
- U.S. Treasury Deputy Secretary Wally Adeyemo said he expects strong backing from G7 peers for Washington’s proposed 15%-plus global minimum corporate tax, which should help solidify support in the U.S. Congress for domestic corporate tax legislation;
- Federal Judge Yvonne Gonzalez Rogers held unconventional closing arguments Monday in the antitrust trial between Epic Games and Apple, peppering both sides’ attorneys for three hours about how far she could – and should – go to change Apple’s App Store business;
- Singapore’s economy expanded more than first thought in the first quarter and the government maintained its growth forecast for the year, but struck a cautious note about recovery due to uncertainties from the COVID-19 pandemic;
- Australia’s New South Wales state said it has awarded a A$3.2 billion 10-year power supply contract to Royal Dutch Shell, which includes supplying battery back-up power for wind and solar energy;
- Europe’s largest residential property group Vonovia SE said it agreed to take over its closest German rival Deutsche Wohnen for about 18 billion euros to better shoulder future investments in heat insulation;
- European Union leaders agreed on Monday to impose more sanctions on Belarus, including economic ones, called on their airlines to avoid Belarusian airspace and authorised work to ban Belarusian airlines from European skies and airports.
The summary as at 24.05.21
Asia-Pacific markets traded mixed Monday, with markets in Japan, Singapore, Indonesia and Malaysia advancing.
- Asian shares got off to a cautious start as investors awaited key U.S. inflation readings for guidance on monetary policy, while Bitcoin tried to steady after being hammered on news of China’s crackdown on mining and trading of the cryptocurrency;
- Oil prices rose as a storm formed in the Gulf of Mexico and Iran said a three-month nuclear monitoring deal had expired, raising doubts about the future of indirect talks that could end U.S. sanctions on Iranian crude exports;
- Cryptocurrency miners, including HashCow and BTC.TOP, have halted their China operations after Beijing intensified a crackdown on bitcoin mining and trading, hammering digital currencies amid heightened global regulatory scrutiny of them;
- Three researchers from China’s Wuhan Institute of Virology (WIV) sought hospital care in November 2019, months before China disclosed the COVID-19 pandemic, the Wall Street Journal reported on Sunday, citing a previously undisclosed U.S. intelligence report;
- A ceasefire between Israel and Hamas held into a third day on Sunday as mediators spoke to all sides about extending the period of calm after the worst outbreak of fighting in years;
- Belarusian authorities scrambled a fighter jet and flagged what turned out to be a false bomb alert to force a Ryanair plane to land on Sunday and then detained an opposition-minded journalist, Roman Protasevich , who was on board, drawing condemnation from Europe and the United States;
- Renault-Nissan has told an Indian court it needs to continue production at its car plant to meet orders, rejecting claims from an employee union that COVID-19 safety protocols were being ignored at the factory, legal filings show;
- Germany’s CureVac expects European approval of its COVID-19 vaccine in June at the latest and is working to expand production capacity, the Augsburger Allgemeine newspaper quoted a company spokeswoman as saying.
The summary as at 21.05.21
Stock futures are higher in overnight trading after major averages rebounded from a three-day losing streak on Thursday led by technology shares.
- Asian stocks rose, setting the region up for a weekly gain, as investors tempered fears about hot inflation and the prospects of an early tapering of stimulus by the Federal Reserve;
- Oil prices nudged up, recovering from three days of losses as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress on talks to revive a 2015 nuclear deal;
- An Egyptian-mediated truce between Israel and Hamas began on Friday, but Hamas warned it still had its “hands on the trigger” and demanded Israel end the violence in Jerusalem and address the damages in Gaza Strip after the worst fighting in years;
- U.S. Federal Reserve chief Jerome Powell turned up the heat on cryptocurrencies on Thursday, saying they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted;
- The European Union and the United States are working to resolve a dispute over subsidies to aircraft makers and should be able to do so by July, the EU’s trade chief said on Thursday in a further sign of improving transatlantic trade ties;
- European Union antitrust regulators fined UBS, UniCredit and Nomura 371 million euros on Thursday in connection with a European government bond trading cartel;
- The Thiele family, Deutsche Lufthansa’s second-largest shareholder, sold more than half of its stake in the airline group following the death of Heinz Hermann Thiele, the bookrunner said in a statement on Thursday;
- Two doses of the Oxford/AstraZeneca COVID-19 vaccine may be around 85% to 90% effective against symptomatic disease, Public Health England (PHE) said on Thursday, while cautioning that it did not yet have enough data to be conclusive.
The summary as at 20.05.21
European stocks are expected to open higher on Thursday, dodging concerns over sharp declines in bitcoin and the U.S. Federal Reserve’s hints that it could taper its asset purchase programs sooner rather than later.
- Stock markets struggled for traction after a jittery session on Wall Street where cryptocurrencies crashed and a hint of tapering talk from the U.S. Federal Reserve drove selling in the bond market and lifted the safe-haven dollar;
- Gold prices climbed, aided by growing U.S. inflationary pressure, although gains were curbed as the dollar rebounded and U.S. Treasury yields rose after Federal Reserve policymakers hinted at a possible shift in future policy;
- A “number” of Fed officials appeared ready to consider changes to monetary policy based on a continued strong economic recovery, according to minutes of the U.S. central bank’s April meeting, but data since then may have already changed the landscape;
- Facebook, Alphabet unit Google and other tech giants will have to pledge to do more to curb the monetisation of false information through advertisement placements, according to a European Commission document seen by Reuters;
- Zhang Yiming, founder of TikTok owner ByteDance, told employees of the Chinese technology giant in a memo that he will step down as chief executive and be succeeded by human resource chief Liang Rubo, the company disclosed;
- Spain will allow people under age 60 who have received a first dose of AstraZeneca’s COVID-19 vaccine to receive their second inoculation either with the AstraZeneca drug or with Pfizer’s vaccine, Health Minister Carolina Darias said on Wednesday;
- Italy’s biggest phone group Telecom Italia (TIM) on Wednesday said its financial targets were unchanged after first-quarter earnings broadly met expectations, pointing to a stabilisation in revenue after the hit from the pandemic;
- A U.S. judge suggested on Wednesday that Bayer include a warning label on Roundup as part of a proposed $2 billion settlement to resolve future claims that the top-selling weedkiller causes cancer.
The summary as at 19.05.21
European stocks are expected to open sharply lower on Wednesday, following a global dip in stocks Tuesday.
- Asian stocks dipped and cryptocurrencies extended losses as uncertainties over inflation prompted investors to reduce exposure to riskier assets for now;
- Oil prices fell for a second day on the potential of Iranian supply returning and as investors sold on speculation that inflation fears might lead the U.S. Federal Reserve to raise interest rates, which could limit economic growth;
- President Joe Biden made the case on Tuesday for his $174 billion electric-vehicle proposal, urging automakers not to build zero-emission vehicles abroad for U.S. consumers – and even got to take a new zero-emission truck out for a drive;
- Investors should not fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by mid-century, the International Energy Agency (IEA) said on Tuesday, in the top global watchdog’s starkest warning yet to curb fossil fuels;
- Israel bombarded Gaza with air strikes and Palestinian militants kept up cross-border rocket fire, with no firm sign of any imminent ceasefire despite international calls to end more than a week of fighting;
- Italian banker Andrea Orcel has cut his claim against Santander over a rescinded offer to make him chief executive by tens of millions of euros, sources said and a court document seen by Reuters on the eve of a hearing show;
- A federal judge on Tuesday questioned a $2 billion proposal by Bayer that would create a framework for resolving future claims that its Roundup weedkiller causes cancer, casting doubt on the plan a day before a key hearing;
- Royal Dutch Shell shareholders overwhelmingly backed the company’s energy transition strategy on Tuesday, but increased support for a second climate resolution filed by an activist group pointed to growing pressure to tackle climate change.
The summary as at 18.05.21
European stocks are expected to open higher on Tuesday, defying gloomier sentiment seen among global markets at the start of the trading week.
- Asian shares rose, shrugging off worries about an increase in regional coronavirus infections and a subdued session on Wall Street, while inflation jitters helped push gold prices to three-month highs;
- Oil prices climbed, extending gains from the previous day, as optimism over the reopenings of the U.S. and European economies outweighed fears of slower fuel demand in Asia due to surging COVID-19 cases and a new wave of restrictions;
- Japan’s economy shrank more than expected in the first quarter as a slow vaccine rollout and new COVID-19 infections hit spending on items such as dining out and clothes, raising concerns the country will lag others emerging from the pandemic;
- AT&T, owner of HBO and Warner Bros studios, and Discovery, home to lifestyle TV networks such as HGTV and TLC, said they will combine their content to form a standalone global entertainment and media business;
- More than a week of fighting between Israel and Hamas showed few signs of abating, despite intense U.S. and global diplomacy to stop the region’s fiercest hostilities in years;
- The U.S. Supreme Court on Monday dashed Novartis’ hopes of launching a generic version of Amgen’s multibillion-dollar rheumatoid arthritis drug Enbrel, declining to hear the company’s challenge to two patents;
- Former Italian Prime Minister Silvio Berlusconi’s family has sold its 2% stake in Mediobanca, in the latest change affecting the shareholder base of Italy’s top investment bank;
- French food group Danone said on Monday it had picked outgoing Barry Callebaut boss Antoine de Saint-Affrique as its new chief executive to lead a turnaround.
The summary as at 17.05.21
European stocks are expected to open flat to higher on Monday as global investors weigh concerns over a rise in inflation and an increase in coronavirus cases, largely attributed to the spread of a variant that emerged in India.
- Asian share markets turned mixed, as data on Chinese retail sales missed expectations though industrial output stayed solid, while more evidence of global inflation pressures helped gold to a three-month peak;
- Oil prices were little changed as the recovery of a major U.S. pipeline network eased concerns over supply and a new wave of COVID-19 restrictions in Asia fuelled fears of lower demand;
- Friends will hug, pints will be pulled and swathes of the British economy will reopen, giving 65 million people a measure of freedom after the gloom of a four-month COVID-19 lockdown;
- Israel launched dozens of air strikes in Gaza and the Hamas militant group kept up its rocket attacks on Israeli cities in fighting that spilled into a second week on Monday;
- China’s factory output growth slowed in April from the jump seen in the previous month while retail sales missed analyst expectations, indicating more pressure on the recovery in consumption;
- French insurer Axa said on Sunday that one of its businesses in Asia was hit by a ransomware attack, adding that it was investigating after some data processed in Thailand was accessed;
- EasyJet Chairman John Barton is preparing to step down once he has completed nine years in the post in May 2022, the British airline said in a statement on Saturday;
- Italy’s hopes of producing its own COVID-19 vaccine have been thrown into doubt after the state audit court rejected a plan to pump public funds into local biotech company ReiThera, two sources close to the matter told Reuters on Friday;
- Ryanair has reported a “strong snap back” in bookings in recent weeks, but said that business continues to be challenging. The airline reported a full-year net loss of 815 million euros ($989 million) on Monday as Covid-19 restrictions pushed its traffic levels down 81%. Analysts had forecast a net loss of 933 million euros for the 12 months ending in March, according to Refinitiv.
The summary as at 14.05.21
European stocks are set to open higher to finish the week after Wall Street snapped a three-day losing streak on Thursday, having been rocked by inflation concerns in recent sessions.
- Japanese shares led a rebound in Asian markets, building on the lead from investors on Wall Street snapping up stocks that would benefit most from an economic recovery;
- Oil prices fell after dropping about 3% a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyber attack;
- The U.S. Centers for Disease Control and Prevention (CDC) on Thursday advised that fully vaccinated people do not need to wear masks outdoors and can avoid wearing them indoors in most places – updated guidance the agency said will allow life to begin to return to normal;
- Israel fired artillery and mounted more air strikes against Palestinian militants in the Gaza Strip amid constant rocket fire deep into Israel’s commercial centre;
- Japan will declare a state of emergency in three more prefectures hit hard by the COVID-19 pandemic, Economy Minister Yasutoshi Nishimura said, in a surprise move reflecting growing concerns about the virus’s spread;
- UniCredit’s top investor BlackRock voted against the remuneration package that last month turned the Italian bank’s new boss Andrea Orcel into one of Europe’s highest paid bank chiefs, a document showed on Thursday;
- Italian infrastructure group Atlantia on Thursday reported a net loss in the first quarter and confirmed it would decide on the sale of its 88% stake in motorway unit Autostrade by June 11;
- Telefonica will look for acquisitions to expand its newly-formed Tech business, COO Angel Vila said on Thursday after the Spanish company published first-quarter results in line with forecasts.
The summary as at 13.05.21
Major Asia-Pacific stock markets declined on Thursday, as Wall Street fell sharply with inflation data triggering fears of a rate hike. European stocks are expected to open lower on Thursday as markets around the world get spooked by the latest U.S. inflation data.
- Asian shares slipped to seven-week lows after a dismaying rise in U.S. inflation bludgeoned Wall Street and sent bond yields surging on worries the Federal Reserve might have to move early on tightening;
- Oil prices fell, pulling back from an eight-week high as concerns about the coronavirus crisis in India, the world’s third-biggest importer of crude, tempered a rally driven by IEA and OPEC predictions that demand is coming back strong;
- U.S. consumer prices increased by the most in nearly 12 years in April as booming demand amid a reopening economy pushed against supply constraints, which could add fuel to financial market fears of a lengthy period of higher inflation;
- Colonial Pipeline began to slowly restart the nation’s largest fuel pipeline network on Wednesday after a ransomware attack shut the line, triggering fuel shortages and panic buying in the southeastern United States;
- SoftBank Group shares tumbled in morning trade after the conglomerate did not extend its buyback programme, removing support for the stock as concern over frothy portfolio valuations outweighed record earnings;
- Andrea Orcel, a veteran UBS and Merrill Lynch dealmaker, stamped his mark on UniCredit within weeks of taking the reins, axing management committees and a dual head structure that had irked some top investors while hiring key lieutenants to oversee strategy and relations at the Italian bank;
- Norway will not resume use of the COVID-19 vaccine made by AstraZeneca, and a decision on whether to include Johnson & Johnson shots in its mass inoculation scheme remains on hold, Prime Minister Erna Solberg said on Wednesday;
- Delivery Hero’s plans to return home to Berlin set off a food fight on Wednesday as rivals Just Eat Takeaway and Uber Eats announced their own product launches in Germany.
The summary as at 12.05.21
European stocks are expected to open largely flat to lower on Wednesday as global markets gear up for key data releases including the latest reading of U.S. inflation.
- An extended sell-off drove Asian shares to their lowest in seven weeks as surging commodity prices and growing inflationary pressure in the United States prompted markets to bet on earlier rate hikes and higher bond yields globally;
- Oil prices rose, extending overnight gains, after industry data showed a drop in U.S. crude inventories, which reinforced OPEC’s robust demand outlook, and as the shutdown of the biggest U.S. fuel pipeline headed into a sixth day;
- Gas stations from Florida to Virginia began running dry and prices at the pump rose on Tuesday, as the shutdown of the biggest U.S. fuel pipeline, Colonial Pipeline, by hackers extended into a fifth day and sparked panic buying by motorists;
- Hostilities between Israel and Hamas escalated, with at least 35 killed in Gaza and five in Israel in the most intensive aerial exchanges for years;
- Toshiba’s board is set to appoint UBS as financial adviser to work on a strategic review for the Japanese conglomerate as it faces a possible private equity bidding war, people familiar with the matter said;
- Brazil’s federal government on Tuesday nationally suspended the vaccination of pregnant women with the AstraZeneca COVID-19 shot, after an expectant mother in Rio de Janeiro died from a stroke possibly related to the inoculation;
- Airbus is asking key suppliers to get ready for a further 18% increase in A320-family jet output by the end of 2022, on top of existing targets for this year, as airlines eye a partial return to normal travel, industry sources said;
- Allianz posted a better-than-expected 83% jump in first quarter net profit from a year earlier, as it saw a rebound it its property and casualty division and its life and health segment, and it confirmed its 2021 profit target;
- Thyssenkrupp’s closely watched cash flow plunged deeper into the red in the second quarter, hit by restructuring costs and investments that overshadowed a guidance upgrade on the back of stronger demand and prices.
The summary as at 11.05.21
European markets are expected to open lower on Tuesday following a sell-off in U.S. tech stocks at the start of the week and as global markets turn their focus on inflation data.
- Asian tech stocks tumbled and a regional equity gauge suffered its biggest slide in nearly two months after a selloff on Wall Street, as traders braced for U.S. inflation data amid worries growing price pressures might bring forward rate rises;
- Oil prices fell as the prospect of the main U.S. East Coast gasoline pipeline remaining shut for the rest of this week led some U.S. Gulf Coast refiners to cut output, denting their appetite for crude;
- The biggest U.S. gasoline pipeline, Colonial Pipeline, will not resume full operations for several more days due to a ransomware cyberattack blamed on a shadowy criminal network called DarkSide;
- U.S. regulators authorized Pfizer and BioNTech’s COVID-19 vaccine for use in children as young as 12 and said they could begin receiving shots as soon as Thursday, widening the country’s inoculation program as vaccination rates have slowed significantly;
- China’s factory gate prices rose at the fastest rate in three and a half years in April, data showed, adding to inflation concerns as the world’s second-largest economy gathers momentum after strong growth in the first quarter;
- AstraZeneca has delivered 50 million doses of its COVID-19 vaccine to European Union countries, according to EU supply data, a milestone the company had originally been expected to hit in January;
- Lufthansa is working with Deutsche Bank and Bank of America to sound out investors about a capital increase worth roughly 3 billion euros, possibly as soon as June, people close to the matter said;
- Societe Generale said on Monday it plans to revamp its corporate and investment banking businesses by shifting resources into deal making and reducing its trading arm’s exposure to market swings.
The summary as at 10.05.21
European stocks are expected to open higher on Monday, following positive momentum in other global markets.
- Global stocks rose amid speculation that interest rates will remain low due to receding inflationary pressure, while oil and gas prices jumped after a cyber attack on a U.S. pipeline operator unnerved markets;
- A far-weaker-than-expected April jobs report, which showed that U.S. employers added 266,000 net payrolls last month also spurred expectations that interest rates would stay lower for longer. Economists polled by Dow Jones had expected 1 million additions;
- Crude prices climbed more than 1% after a major cyber attack that forced the shutdown of critical fuel supply pipelines in the United States, highlighting the fragility of oil infrastructure;
- The White House was working closely with top U.S. fuel pipeline operator Colonial Pipeline on Sunday to help it recover from a ransomware attack that forced the company to shut a critical fuel network supplying populous eastern states;
- Scottish leader Nicola Sturgeon told British Prime Minister Boris Johnson on Sunday that another referendum on independence was inevitable after her party won a resounding election victory;
- Israel’s attorney-general secured a deferment on Sunday of a court hearing on planned evictions of Palestinians in Jerusalem, a session that had threatened to stoke more violence in the holy city and heighten international concern;
- The Dutch government has granted a consortium that includes oil majors Royal Dutch Shell and ExxonMobil around 2 billion euros in subsidies for what is set to become one of the largest carbon capture and storage (CCS) projects in the world, the Port of Rotterdam said on Sunday;
- European Internal Market Commissioner Thierry Breton said on Sunday the European Commission did not renew its order for AstraZeneca vaccines against COVID-19 for after June;
- Volkswagen truck unit Traton said on Saturday it had proposed to pay more than 586 million euros to squeeze out minority shareholders of subsidiary MAN SE.
The summary as at 07.05.21
European markets are set for a higher open Friday as global stocks eye a positive week amid surging commodity prices, while investors await a key jobs report out of the U.S.
- Global stocks headed for their first weekly gain in three amid a surge in commodity prices, while traders braced for a key U.S. jobs report later that could provide clues on when the Federal Reserve will ease back on monetary stimulus;
- Oil prices recovered after a 1% dip in the previous session, on buoyant economic data from China and the United States even as the surging pandemic in India capped prices;
- The European Union on Thursday backed a U.S. proposal to discuss waiving patent protections for COVID-19 vaccines, but drugmakers and some other governments opposed the idea, saying it would not solve global inoculation shortages;
- U.S. employers likely hired nearly a million workers in April as they rushed to meet a surge in demand, unleashed by the reopening of the economy amid rapidly improving public health and massive financial help from the government;
- China’s exports growth unexpectedly accelerated in April as the brisk U.S. recovery and stalled factory production in other countries hit by coronavirus propped up demand for goods made in the world’s second-largest economy;
- Airlines, holiday companies, tourists and vast swathes of southern Europe are looking forward to hearing the UK’s plan to relaunch travel but only a limited number of countries are set to be declared safe to visit;
- London’s Court of Appeal will hear a request to revive a 5 billion pound lawsuit against Anglo-Australian mining group BHP over a 2015 dam failure in Brazil, a court order showed;
- Europe’s biggest utility Enel bumped up spending on its green energy and networks businesses in the first quarter as it seeks to accelerate efforts to cut its carbon footprint.
The summary as at 06.05.21
European markets are set for a muted open on Thursday as investors monitor a slew of corporate earnings and await the latest monetary policy decision from the Bank of England.
- Asian shares rose and commodity prices held near multi-year highs as investors switched to cyclicals amid hopes of a strong economic recovery, while the Australian dollar fell after China said it would end economic dialogue with Canberra;
- Oil prices rose, recouping early losses, as crude stockpiles in the United States, the world’s largest oil consumer, fell more sharply than expected as refining output rose and exports surged;
- Scotland votes in an election that could trigger a showdown with British Prime Minister Boris Johnson over a new independence referendum just five years since the Brexit vote strained the United Kingdom to breaking point;
- President Joe Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, bowing to mounting pressure from Democratic lawmakers and more than 100 other countries, but angering pharmaceutical companies;
- The Group of Seven scolded both China and Russia on Wednesday, casting the Kremlin as malicious and Beijing as a bully, but beyond words there were few concrete steps aside from expressing support for Taiwan and Ukraine;
- Higher prices and robust consumer demand will help Stellantis deliver a strong performance this year, despite a worsening global shortage of semiconductor chips this quarter, the world’s fourth-biggest carmaker said on Wednesday;
- Credit Suisse Group has told customers in recent months it will no longer execute transactions in shares of cannabis companies with U.S. operations or hold them on behalf of clients, a cannabis company executive and other industry sources told Reuters on Wednesday;
- Barclays will offer investors an advisory vote on its climate policy at next year’s annual shareholder meeting, the bank’s chairman said, after pressure from investors and activists to become greener;
- French bank Societe Generale reported a “record” quarter for its trading division, helping it beat analyst expectations for the first three months of 2021. Net income for the first quarter came in at 814 million euros ($977 million), the lender said Thursday. Analysts were expecting a net income of 204 million euros;
- Volkswagen, Europe’s largest car maker, raised its operating margin target for 2021 on Thursday, pointing to stronger demand for more profitable cars in the first three months of the year. The group now expects its operating profit margin to be 5.5-7% this year, versus a previous forecast for 5.0-6.5%, with vehicle deliveries and sales each up by more than a fifth.
The summary as at 05.05.21
European stocks are expected to open higher Wednesday as investors digest a fresh round of corporate earnings and key economic data out of the euro zone.
- Asian shares were trying to avoid a fourth straight session of falls as U.S. stock futures steadied in the wake of a pullback in large-cap tech darlings;
- Oil prices rose nearly 1%, extending overnight gains, after industry data estimated U.S. crude stockpiles fell much more than expected last week reinforcing bullish views on fuel demand in the world’s largest economy;
- U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth;
- President Joe Biden on Tuesday announced a goal to vaccinate 70% of U.S. adults with at least one COVID-19 shot by the July 4 Independence Day holiday and said the government would innoculate 12- to 15-year-olds as soon as allowed;
- Pfizer on Tuesday raised its forecast for 2021 COVID-19 vaccine sales by more than 70% to $26 billion and said demand from governments around the world fighting to halt the pandemic could contribute to its growth for years to come;
- Italy’s top commercial broadcaster Mediaset, controlled by the family of former Prime Minister Silvio Berlusconi, will press on with European expansion plans after agreeing a split with its second largest investor Vivendi;
- German biotech labs supplier Merck raised its 2021 earnings forecast on strong first-quarter results, as efforts by the pharma industry to ready treatments and vaccines against the coronavirus bolsters demand for its products;
- Bombardier sold its 3.1% stake in French rail giant Alstom SA for 506.2 million euros through a book building process to institutional investors, the Canadian business jet maker said on Tuesday.
The summary as at 04.05.21
European stocks are expected to open in flat-to-lower territory on Tuesday, following similarly mixed sentiment elsewhere.
- Asian share markets advanced marginally as investors looked to signs of recovery from the coronavirus pandemic as major economies around the world reopen;
- Oil prices fell on concerns over fuel demand in India as COVID-19 cases soar, though the losses were limited as more U.S. states eased lockdowns and the European Union sought to attract travellers;
- Britain will seek to agree decisive action from G7 partners to protect democracies against global threats like those posed by China and Russia;
- The U.S. economy is doing better but is “not out of the woods yet,” Federal Reserve Chair Jerome Powell said on Monday in remarks that flagged an upcoming central bank study documenting the disproportionate blow suffered by the less educated and working parents during the coronavirus downturn;
- Billionaire benefactors Bill and Melinda Gates, co-founders of one of the world’s largest private charitable foundations, filed for divorce on Monday after 27 years of marriage but pledged to continue their philanthropic work together;
- Mediaset and its second-largest investor, Vivendi, on Monday ended years of legal sparring with an accord under which the French group will drastically cut its stake in the Italian broadcaster;
- Ford Motor and BMW are leading a $130 million funding round in a solid-state battery startup, Solid Power, as carmakers push to lower the cost of electric vehicles by investing in the development of affordable but powerful rechargeable batteries, the companies said on Monday;
- Cooperative group InVivo has agreed to acquire family-owned Soufflet in a deal potentially worth 2.3 billion euros, as the French rivals look to create of one of Europe’s biggest agricultural businesses.
The summary as at 03.05.21
European stocks are expected to open higher on Monday on the first trading day of May, with the U.K. closed for the May Day public holiday.
- Asian share markets got off to a slow start as holidays in China and Japan crimped volumes and investors awaited a raft of data this week which should show the U.S. leading a global economic recovery;
- Oil prices fell as a catastrophic second wave of a coronavirus epidemic in India cut short a recovery in oil demand there, offsetting optimism about a strong rebound in demand in developed countries and China in the second half of the year;
- The Group of Seven richest countries will look at a proposal to build a rapid response mechanism to counter Russian “propaganda” and disinformation, British Foreign Secretary Dominic Raab told Reuters;
- Warren Buffett said on Saturday that Berkshire Hathaway is being lifted by a U.S. economy faring far better than he predicted early in the coronavirus pandemic, though investor euphoria is making it hard to deploy cash;
- India reported more than 300,000 new coronavirus cases for a 12th straight day, taking its overall caseload to just shy of 20 million, while deaths from COVID-19 rose by 3,417;
- KPN NV has rejected unsolicited takeover offers from a private equity consortium comprising EQT AB and Stonepeak Infrastructure Partners and another from U.S. investment firm KKR, the Dutch telecommunications company said on Sunday;
- Mobile operator Vodafone Group and Alphabet’s Google Cloud entered a strategic partnership to jointly develop data services, Vodafone said on Sunday;
- Australian gas producer Santos said it will explore sharing infrastructure to develop gas fields around the Barossa and Evans Shoal projects with Italian energy group Eni SpA.
The summary as at 30.04.21
Asia-Pacific markets struggled for gains Friday as investors turned cautious, despite a positive finish stateside in the previous session.
- Asian shares slipped but world stocks held near a record high after strong U.S. economic data and the Federal Reserve’s commitment to continue supporting the economy fuelled investors’ appetite for risk;
- Oil prices slipped, taking a breather after touching their highest in six weeks as concerns of wider lockdowns in India and Brazil to curb the COVID-19 pandemic offset a bullish outlook on summer fuel demand and economic recovery;
- U.S. economic growth accelerated in the first quarter as the government gave money to mostly lower-income households, fueling consumer spending and setting the course for what is expected to be the strongest performance this year in nearly four decades;
- Amazon.com, one of the biggest winners of the pandemic, posted record profits on Thursday and signaled that consumers would keep spending in a growing U.S. economy and converts to online shopping are not likely to leave;
- China’s factory activity expanded at a slower pace and missed forecasts in April as supply bottlenecks and rising costs weighed on production and overseas demand lost momentum;
- Europe’s major energy companies profited from a rise in oil prices to report big increases in first-quarter earnings on Thursday, putting the worst of the pandemic-driven slump in fuel demand behind them;
- Credit Suisse investors managing $2.5 trillion have called for the bank to take a tougher stance on coal financing, amid concern its current policies are too lax, a letter seen by Reuters showed;
- WPP, the world’s biggest advertising company, launched into open conflict with its founder Martin Sorrell on Thursday, refusing to pay share awards and accusing him of leaking client information to the media;
- BNP Paribas reported on Friday first-quarter net income of 1.8 billion euros ($2.18 billion) — an 11% increase from the previous quarter. Analysts had forecast a net income of 1.2 billion euros for the quarter, according to Refinitiv. The figures were supported by a bounce back in equity trading over the quarter.
The summary as at 29.04.21
European stocks are expected to open higher on Thursday as markets react to the U.S. Federal Reserve’s decision to hold interest rates near zero.
- Asian shares rose after the U.S. Federal Reserve said it was too early to consider rolling back emergency support for the economy, and as U.S. President Joe Biden unveiled plans for a $1.8 trillion stimulus package;
- Oil prices extended gains after rising 1% the previous session, as bullish forecasts on recovering demand this summer outweighed concerns about the impact of rising COVID-19 cases in India, Japan and Brazil;
- The Federal Reserve on Wednesday took a rosier view of the U.S. economic recovery and the nation’s war against the coronavirus, but said it was too early to consider rolling back its emergency support with so many workers still left jobless by the pandemic;
- Apple on Wednesday posted sales and profits ahead of Wall Street expectations fueled by 5G iPhone upgrades but warned a global chip shortage could dent iPads and Mac sales by several billion dollars;
- President Joe Biden proposed a sweeping new $1.8 trillion plan in a speech to a joint session of Congress on Wednesday, pleading with Republican lawmakers to work with him on divisive issues and to meet the stiff competition posed by China;
- Standard Chartered posted a higher- than-expected 18% rise in first-quarter pre-tax profit, as the emerging markets-focused bank began recovering from the economic hit caused by the coronavirus pandemic;
- European Union lawyers on Wednesday demanded AstraZeneca immediately deliver COVID-19 vaccines from its factories in Britain, in a move that risks reigniting a spat with London over scarce vaccine supplies;
- Logitech International reported better-than-expected full-year sales as the computer peripherals maker benefited from the work-from-home trend during the COVID-19 pandemic; · Oil giant Royal Dutch Shell on Thursday reported marginally better-than-expected first-quarter earnings, amid stronger commodity prices and growing expectations of a fuel demand recovery. It comes as energy majors seek to reassure investors that they have gained a more stable footing in recent months.
The summary as at 28.04.21
European stocks are expected to open in mixed territory on Wednesday as global markets await comments from the U.S. Federal Reserve.
- Asian shares were mixed as already high valuations discouraged investors from buying equities ahead of a closely-watched U.S. Federal Reserve meeting;
- Oil prices were little changed, paring overnight gains, with soaring COVID-19 cases in India and a bigger-than-expected build in U.S. crude stocks offsetting confidence shown by OPEC and its allies in a solid recovery in global fuel demand;
- Google parent Alphabet on Tuesday reported record profit for the second consecutive quarter and a $50 billion share buyback but warned a surge in usage and ad sales during the pandemic may slow as people resume in-person activities;
- Microsoft on Tuesday met analysts’ quarterly sales expectations and beat profit estimates, but its shares fell slightly reflecting some skepticism about one-off benefits included in the results and high hopes after a year-long rally;
- Fully vaccinated people can safely engage in outdoor activities like walking and hiking without wearing masks but should continue to use face-coverings in public spaces where they are required, U.S. health regulators and President Joe Biden said on Tuesday, while urging those who have not to get the shot;
- UBS reported an unexpected $774 million loss on Tuesday from the collapse of U.S. investment fund Archegos, taking the total hit to global banks from the stricken family office beyond $10 billion;
- BP’s profit more than tripled to $2.6 billion in the first quarter thanks to stronger oil prices and bumper revenue from natural gas trading, paving the way for the energy company to start buying back its shares;
- DSV Panalpina said on Tuesday it had agreed to acquire the logistics division of Kuwait’s Agility Public Warehousing in an all-share deal worth $4.1 billion, creating the world’s third largest freight forwarding company.
- Deutsche Bank on Wednesday reported a 908 million euro profit for the first quarter, buoyed by continued strong performance in its investment banking division. The bank vastly exceeded analyst expectations for net income of 642.95 million euros, according to Refinitiv, and showed a marked improvement from the 51 million euro profit eked out in the fourth quarter of 2020.
The summary as at 27.04.21
European stocks opened lower Tuesday as global markets prepare for the U.S. Federal Reserve’s two-day meeting, which begins today, and more earnings.
- Asian shares fell and U.S. stock futures were steady as caution ahead of a U.S. Federal Reserve meeting and a slew of corporate earnings offset growing optimism about the global economic recovery from the COVID-19 blow;
- Oil prices rebounded after falling in the previous session, but gains are likely to be capped amid growing concern about fuel demand in India, the world’s third-biggest crude importer now slammed by spiralling new coronavirus cases;
- Japan’s central bank maintained its massive stimulus and projected inflation missing its 2% target for years to come, as fresh curbs to combat a spike in COVID-19 cases overshadow the boost to growth from solid global demand;
- Electric carmaker Tesla marginally beat Wall Street expectations for first-quarter revenue on Monday boosted by a jump in environmental credit sales to other automakers and liquidating some bitcoins. The electric carmaker posted a record number of deliveries during the three-month period ending 31 March, despite a global shortage of chips that restricted rivals. Mr Musk said the period saw “some of the most difficult supply chain challenges that we’ve ever experienced at Tesla”. Tesla made $438m in the first quarter, with nearly 185,000 vehicles sold – almost twice the number sold at the same time last year;
- Texas, Florida and North Carolina are among the states that will gain congressional seats based on new population data from the U.S. census, a shift that could boost Republican chances of recapturing the U.S. House of Representatives from Democrats in next year’s midterm elections;
- HSBC Holdings reported a significantly better-than-expected 79% rise in first quarter profit, after the improved economic outlook allowed it to release cash it had set aside against bad loans because of the coronavirus pandemic;
- French energy group Total declared force majeure on its $20 billion liquefied natural gas project in Mozambique and confirmed it had withdrawn all staff from the construction site following insurgent attacks last month;
- ArcelorMittal, the world’s top steelmaker, and Swedish utility Vattenfall have teamed up with Shell, Airbus and other heavyweights to cut emissions in industrial processes by using hydrogen, two executives said.
The summary as at 26.04.21
European stocks are expected to open in flat territory on Monday as investors gear up for a busy week on the data and earnings front.
- Asian stocks rose with Chinese shares near three-week highs as signs the world economic recovery was well on track bolstered risk appetite, while the U.S. dollar slipped to a two-month low;
- Oil prices eased on concerns that a resurgence of coronavirus infections in India and Japan, the world’s third and fourth largest oil importers, would cut fuel demand in Asia;
- European market sentiment could be overshadowed by economic events and data in the U.S. this coming week, with more U.S. corporate earnings due (some of the largest companies in the world are scheduled to publish results this week including Apple, Microsoft, Amazon and Alphabet) as well as big data releases, including the latest gross domestic product data due Thursday and inflation data Friday;
- In addition, the U.S. Federal Reserve is holding a monetary policy meeting on Tuesday and Wednesday, and market participants will be closely watching for clues on whether the central bank is nervous about the prospect of rising inflation. It has previously said it sees the pickup in prices as only temporary;
- Fed Chairman Jerome Powell will host a press conference Wednesday afternoon to discuss the Federal Open Market Committee’s decision. U.S. stock futures held steady at the start of the overnight session Sunday evening in anticipation of the busy week ahead;
- India reported a record number of Covid-19 cases for the fifth straight day on Monday while the official death toll also jumped. Official data showed there were 352,991 new reported cases over a 24-hour period as total infection numbers crossed 17 million;
- China will launch a series of promotional activities, including a new consumer goods expo in southern Hainan province, in May to boost spending as the Chinese retail sector recovers from COVID-19-induced consumer caution;
- Britain looks set to see faster economic growth than the United States this year as the country races ahead with its vaccination programme after its slump in 2020, Goldman Sachs said on Sunday;
- Canada’s health department said on Sunday the 1.5 million doses of the Astrazeneca COVID-19 vaccine imported from Emergent BioSolutions’ Baltimore facility were safe and met quality specifications;
- British cyber-security firm Darktrace is cutting the valuation of its London stock exchange listing as it adopts a cautious approach aimed at avoiding a repetition of Deliveroo’s disappointing public debut, Sky News reported on Sunday;
- Two of France’s richest businessmen are close to a deal over media and publishing company Lagardere that would hit pause on their attempts to cherry-pick its assets for several years, three sources close to the discussions said on Sunday.
The summary as at 23.04.21
European markets are heading for a slightly lower open Friday as global stocks wither to end the week, with investors monitoring a slew of economic data and corporate earnings.
- A key gauge of Asian shares rose, supported by gains in China and a decision by the European Central Bank to maintain stimulus, while investors largely shrugged off the impact of a possible U.S. capital gains tax hike;
- Oil prices rose on hopes of a fuel demand recovery in the United States and Europe as economic growth picks up and lockdowns ease, but worries about India’s raging second wave of COVID-19 cases kept a lid on gains;
- U.S. President Joe Biden will roll out a plan to raise taxes on the wealthiest Americans, including the largest-ever increase in levies on investment gains, to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers, sources familiar with the proposal said;
- The United States and other countries hiked their targets for slashing greenhouse gas emissions at a global climate summit hosted by President Joe Biden, an event meant to resurrect U.S. leadership in the fight against global warming;
- Intel on Thursday raised its annual sales outlook on booming demand for personal computers, but its second-quarter profit forecast fell short of analyst expectations as the company spends heavily to get its manufacturing operations back on track and catch up to rivals with faster chips;
- Volkswagen is considering a supervisory board change that could lead to the departure of Bernd Osterloh, who heads its powerful works council and clashed with CEO Herbert Diess last year, sources familiar with the matter said on Thursday;
- The European Commission is working on legal proceedings against AstraZeneca after the drugmaker cut COVID-19 vaccine deliveries to the European Union, sources familiar with the matter said;
- Coffee drinkers, pet owners and home bakers helped to drive the biggest rise in quarterly sales at Nestle for 10 years, as the world’s biggest food group outshone Danone and set a high bar for Unilever.
The summary as at 22.04.21
European stocks advanced on Thursday following a global rebound in markets after days of negative sentiment.
- Asian stocks rose, extending a rebound in global markets following a sharp selloff earlier this week, while oil prices eased again on worries about rising COVID-19 cases in some parts of the world;
- Oil prices fell for a third day as a surprise build in U.S. crude inventories and a resurgence of COVID-19 cases in India and Japan raised concerns that a recovery in global economy and fuel demand may slow;
- The European Central Bank will keep policy unchanged on Thursday, emphasizing that its stimulus measures are keeping the pandemic-struck economy afloat so they should not be clawed back too soon;
- A bipartisan U.S. congressional push to counteract China picked up steam on Wednesday as a Senate committee overwhelmingly backed a bill pressing Beijing on human rights and economic competition and other lawmakers introduced a measure seeking billions for technology research;
- A panel of U.S. senators questioned officials from Apple and Alphabet’s Google on Wednesday about the dominance of their mobile app stores and whether the companies abuse their power at the expense of smaller competitors;
- Credit Suisse had more than $20 billion of exposure to investments related to Archegos Capital Management and struggled to monitor them before the fund had to liquidate many large positions, the Wall Street Journal reported;
- Airbus has launched the biggest shake-up of its manufacturing network in more than a decade, with large-parts activities reorganized in France and Germany and some small-parts production hived off ahead of a possible sale;
- A Mexican judge has sided with Bayer in a legal challenge to a government plan to prohibit glyphosate, according to the ruling seen by Reuters on Wednesday, providing temporary relief from a looming ban on the widely used herbicide.
The summary as at 21.04.21
European stocks are expected to open in mixed territory on Wednesday, reflecting more cautious trade elsewhere globally.
- Asian shares and U.S. stock futures fell as concern about a resurgence of coronavirus cases in some countries cast doubt on the strength of global growth and demand for crude oil;
- Oil prices fell for a second day on concerns that soaring COVID-19 cases in India will drive down fuel demand in the world’s third biggest oil importer;
- Johnson & Johnson said on Tuesday it will resume rolling out its COVID-19 vaccine in Europe after the region’s medical regulator said the benefits of the shot outweigh the risk of very rare, potentially lethal blood clots;
- Former Minneapolis police officer Derek Chauvin was convicted on Tuesday of murdering George Floyd, a milestone in the fraught racial history of the United States and a rebuke of law enforcement’s treatment of Black Americans;
- The U.S. economy is going to temporarily see “a little higher” inflation this year as the recovery strengthens and supply constraints push up prices in some sectors, but the Federal Reserve is committed to limiting any overshoot, Fed Chair Jerome Powell said in an April 8 letter to Senator Rick Scott;
- The United States of America and the Federal Retirement Thrift Investment Board have filed a lawsuit against Danske Bank and its former CEO in the Copenhagen city court, according to the attorney representing the parties;
- Italy’s Eni is considering spinning off oil and gas operations in West Africa and the Middle East into new joint ventures to help reduce debt and fund its shift to low-carbon energy, according to company and industry sources;
- Investment funds Ardian and Global Infrastructure Partners will not participate in the deal to create a new French water company after the takeover of Suez by its bigger rival Veolia, Ardian Infrastructure and GIP chief Mathias Burghardt told Reuters on Tuesday.
The summary as at 20.04.21
European stocks are expected to open in mixed territory on Tuesday with global markets all showing lacklustre sentiment.
- European markets look set to follow a pattern of uncertain sentiment elsewhere overnight; U.S. stock futures rose only slightly in overnight trading on Monday, as investors prepare for the next batch of corporate earnings. Earnings season continues in the U.S. Tuesday with streaming giant Netflix set to report after the bell.
- Japanese shares fell sharply, weighed down by worries that possible reintroduction of COVID-19 emergency measures in the country’s biggest cities would slow the economic recovery;
- Oil prices rose as a weaker U.S. dollar supported commodities and on expectations that crude inventories fell in the United States, the world’s biggest oil user, though rising coronavirus cases in Asia capped gains;
- Chinese President Xi Jinping said that the global governance system should be made more equitable and fair, and that rules set by one country or some nations cannot be imposed on others;
- U.S. President Joe Biden met on Monday with a bipartisan group of lawmakers who have all served as governors or mayors, as the White House seeks a deal on his more than $2 trillion jobs and infrastructure proposal;
- United Airlines indicated that quarterly losses would continue until air travel returns to 65% of 2019 levels. The airline company posted a larger-than-expected loss for Q1 2021 and expects yet another loss this upcoming quarter;
- IBM reported its first revenue gain since mid-2018 as cloud-service demand, which has been a key focus for the new CEO, exceeded expectations;
- Southeast Asian countries will discuss the crisis in Myanmar at a summit in Jakarta on Saturday, the ASEAN bloc’s secretariat said, after the European Union imposed its toughest sanctions yet on the junta that seized power there on Feb. 1;
- A Milan court on Monday rejected a multibillion-euro damage request by Mediaset in a case stemming from the failed sale of the Italian broadcaster’s pay-TV arm to French media giant Vivendi, a court document showed;
- Creval on Monday said the higher takeover price offered by Credit Agricole to buy the Italian lender was still inadequate, in a blow to the French group’s plan to expand in its biggest market outside France;
- Broadcasters who have spent billions of dollars to screen Champions League soccer have condemned the plan by top European clubs to form a breakaway Super League as a threat to the future of the game that will not succeed.
The summary as at 19.04.21
European stocks are expected to open higher on Monday, bucking more mixed momentum in global markets overnight.
- Asian shares hovered near 1-1/2 week highs helped by expectations monetary policy will remain accommodative the world over, while COVID-19 vaccine rollouts help ease fears of another dangerous wave of coronavirus infections;
- Oil prices were lower as rising coronavirus infections in India and other countries prompted concerns that stronger measures to contain the pandemic will hit economic activity, along with demand for commodities such as crude;
- Italy risks missing an April 30 deadline for submitting a final version of its Recovery Plan to the European Commission because Brussels is not satisfied with several aspects of the drafts presented so far, two sources close to the matter said;
- Japan’s exports posted their strongest growth in more than three years in March, led by a surge in China-bound shipments, in a sign the economic recovery from last year’s deep coronavirus slump remains intact;
- Ant Group is exploring options for founder Jack Ma to divest his stake in the financial technology giant and give up control, as meetings with Chinese regulators signaled to the company that the move could help draw a line under Beijing’s scrutiny of its business, according to a source familiar with regulators’ thinking and two people with close ties to the company;
- Swedish carmaker Volvo Cars said it has signed an agreement to provide cars to the autonomous driving technology unit of China’s top ride-hailing firm, Didi Chuxing, for its self-driving test fleet;
- German automaker BMW is aiming for a quarter of its sales in China to be pure battery electric vehicles by 2025, its China chief Jochen Goller said;
- The Canadian province of Ontario will begin offering AstraZeneca’s COVID-19 vaccine on Tuesday to people turning 40 or older this year, according to a government source.
The summary as at 16.04.21
European markets are set for a modestly higher open Friday after notching record highs the previous session, as global stocks take heart from strong U.S. economic data and recovery prospects.
- A batch of Chinese and U.S. economic data helped underpin global stocks near record highs, as investors priced in a solid global recovery from the coronavirus-induced slump;
- Oil prices dipped in early trade but were on course for a weekly gain of more than 6% with an improved oil demand outlook and strong economic recoveries in China and the United States offsetting concerns about spikes in COVID-19 infections;
- China’s economic recovery quickened sharply in the first quarter from a coronavirus-induced slump earlier last year, propelled by stronger demand at home and abroad and continued government support for smaller firms;
- Citigroup trounced first-quarter profit expectations, thanks to a rebound in the broader economy and a jump in investment banking activity, and said it will exit some overseas businesses as new chief executive Jane Fraser starts to make her mark on the country’s third-largest lender;
- The United States on Thursday imposed a broad array of sanctions on Russia, including curbs to its sovereign debt market, to punish it for interfering in last year’s U.S. election, cyber hacking, bullying Ukraine and other alleged malign actions;
- German cars and trucks maker Daimler saw a better-than-expected surge in first-quarter operating profit on higher vehicle prices and strong demand in China;
- Deliveroo said a more-than doubling in first quarter orders during coronavirus lockdowns was an initial step in proving itself following the debacle of the food delivery company’s London flotation last month;
- Lancome maker L’Oreal posted a further pickup in sales in the first quarter, helped by strong growth in China, and said on Thursday there were early signs that make-up demand would make a comeback after the COVID-19 pandemic.
The summary as at 15.04.21
European markets advanced modestly on Thursday morning, as investors digest a fresh round of corporate earnings and inflation figures from several major economies.
- Asian shares were on the backfoot following mixed cues from Wall Street where a sharp sell-off in the largest bitcoin exchange Coinbase hit tech shares while the dollar index struggled near one-month lows;
- Oil prices were lower though holding near one-month highs after futures jumped in the previous as the International Energy Agency (IEA) and others upgraded forecasts for oil demand as major economies recover from the pandemic;
- Coinbase was valued at $86 billion at the end of its Nasdaq debut on Wednesday, in a choppy day of trading when its valuation went as high as $112 billion;
- The U.S. economy picked up speed going into the spring on the back of growing confidence among consumers, the Federal Reserve said on Wednesday, and Fed Chair Jerome Powell said it is on track for stronger growth and hiring in the coming months;
- JPMorgan Chase’s first-quarter results on Wednesday laid bare the challenge big banks face in this phase of the pandemic, where stimulus programs have left individuals and businesses in good financial shape but so flush with cash that few of them need loans;
- Europe’s choppy vaccine rollout hit more trouble on Wednesday after U.S. drugmaker Johnson & Johnson delayed its COVID-19 shot and Denmark said it would drop a similar vaccine from AstraZeneca over the risk of blood clotting;
- Shareholders of UniCredit have approved the appointment of Andrea Orcel as chief executive and a proposed annual pay package of up to 7.5 million euros, Italian daily la Repubblica reported;
- Britain’s third-largest supermarket group Asda said on Wednesday it plans to centralise its bakery operations which currently employ around 1,200 people, mirroring a similar move by rival Tesco last year.
The summary as at 14.04.21
European markets are set for a fractionally higher open as investors monitor economic data and corporate earnings.
- Global equity markets rose to a fresh record high as bond yields eased after data showed U.S. inflation was not rising wildly;
- Crude climbed after industry data showed U.S. oil inventories declined more than expected and OPEC raised its outlook for oil demand, but gains were capped by worries about the coronavirus and by rising supplies of the energy resource;
- French luxury goods group LVMH posted a sharp rebound in first-quarter earnings after the bell on Tuesday, bolstered by Chinese and American demand for Louis Vuitton handbags and Dior products;
- German software giant SAP slightly raised its 2021 revenue outlook on Tuesday after first-quarter earnings showed robust progress in cloud sales;
- Toshiba CEO Nobuaki Kurumatani resigned amid controversy over a $20 billion buyout bid from CVC Capital and the conglomerate’s shares surged on reports that more suitors were planning offers;
- U.S. federal health agencies on Tuesday recommended pausing use of Johnson & Johnson’s COVID-19 vaccine for at least a few days after six women under age 50 developed rare blood clots after receiving the shot, dealing a fresh setback to efforts to tackle the pandemic;
- U.S. consumer prices rose by the most in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation;
- Credit Suisse has identified $2.3 billion worth of loans exposed to financial and litigation uncertainties in its Greensill-linked supply chain finance funds, it told investors on Tuesday;
- Volkswagen must fully compensate customers who took out loans to buy diesel cars that were discovered to be fitted with devices to cheat emissions tests, a German court has ruled;
- Italy aims to spend almost 7 billion euros in European recovery funds on ultra-fast networks, up 60% from a previous goal, as ministers lay out alternatives to a long-delayed single national broadband plan, sources told Reuters.
The summary as at 13.04.21
European markets were little changed on Tuesday as investors await key economic data and the beginning of corporate earnings season.
- Asia share markets were cautious after U.S. markets weakened as investors anticipated the start of corporate earnings seasons and the release of key inflation data to indicate how the global recovery from the pandemic will emerge;
- Oil prices climbed as data from China showed the world’s second largest oil consumer’s import growth surging and on tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites;
- China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide COVID-19 vaccination, while import growth surged to the highest in four years;
- President Joe Biden sought to demonstrate his much-touted interest in working with Republicans in Congress on Monday, with a bipartisan White House meeting as lawmakers prepared to grapple with his $2.3 trillion proposal to improve U.S. infrastructure;
- Microsoft said it would buy artificial intelligence and speech technology firm Nuance Communications for about $16 billion, as it expands cloud solutions for healthcare customers;
- Britain’s government has opened an independent investigation into failed finance company Greensill Capital after lobbying by former Prime Minister David Cameron raised questions over its access to ministers;
- Airbus on Monday announced the biggest shake-up in its top ranks since Chief Executive Guillaume Faury took the helm two years ago, sparked by the departure of two key executives;
- Australia’s Cleanaway Waste Management said it would buy certain Sydney-based assets of Suez after the French firm agreed to be acquired by local rival Veolia.
The summary as at 12.04.21
European markets are heading for a muted open on Monday. US futures contracts tied to the major U.S. stock indexes ticked lower during early morning trade on Monday, suggesting Wall Street could see muted trading on Monday after reaching fresh records last week.
- Asian shares faltered as investors wait to see if U.S. earnings can justify sky-high valuations, while bond markets could be tested by what should be very strong readings for U.S. inflation and retail sales this week;
- Oil rose amid hopes that fuel demand is picking up in the United States as the summer driving season approaches and the rollout of COVID-19 vaccinations there accelerates, though increasing case numbers in other countries are set to cap gains;
- China’s Alibaba does not expect any material impact from changes to its exclusivity arrangements with merchants, CEO Daniel Zhang said, after regulators fined the e-commerce giant a record $2.75 billion for abusing its market dominance;
- Microsoft is in advanced talks to buy artificial intelligence and speech technology company Nuance Communications at about $16 billion, according to a source familiar with the matter;
- The U.S. economy is at an “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases, Federal Reserve Chair Jerome Powell said;
- AstraZeneca had a positive meeting with the European Commission last week, the Anglo-Swedish company said after an Italian newspaper said the group had not replied to an EU letter of complaint over COVID-19 vaccines within a 20-day deadline;
- The head of Switzerland’s financial regulator FINMA questioned Credit Suisse over risks in its dealings with now-insolvent finance firm Greensill Capital “months” before the bank was forced to close $10 billion of funds linked to Greensill, Swiss newspaper SonntagsZeitung reported on Sunday;
- Italian diagnostics group DiaSorin said on Sunday it will acquire U.S. based Luminex for $1.8 billion in an all-cash deal that will strengthen DiaSorin’s molecular diagnostics technology.
The summary as at 09.04.21
European markets are heading for a muted open on Friday, searching for direction after touching record highs in the previous session.
- Global stocks held firm near record highs as receding inflation fears in the United States pushed down bond yields and lifted Wall Street, though softness in Chinese shares capped gains in Asia;
- U.S. crude prices edged up in Asian trade, supported by a weaker dollar, as investors weighed rising supplies and the impact on fuel demand from the COVID-19 pandemic;
- China’s factory gate prices beat analyst expectations to rise at their fastest annual pace since July 2018 in March in the latest sign that a recovery in the world’s second-largest economy is gathering momentum;
- The U.S. Federal Reserve plans to keep its super-easy policy in place even as data shows the economy kicking into higher gear, with policymakers predicting on Thursday that an expected increase in prices this year will fade on its own, and warning about the recent uptick in COVID-19 infections;
- Roughly 500 ballots submitted in Amazon.com’s landmark union election have been challenged in a contest that will determine whether an Alabama warehouse becomes the online retailer’s first organized workplace in the United States, people familiar with the matter said;
- Australia has doubled its order of the Pfizer COVID-19 vaccine, Prime Minister Scott Morrison said, as the country raced to overhaul its inoculation plan over concerns about the risks of blood clots with the AstraZeneca vaccine;
- Low-cost carrier Wizz Air has replaced its flight operations chief after he was apparently recorded telling his team to draw up a redundancy list of pilots who were often sick or “caused grief” while sparing cheaper contract crew;
- Spanish infrastructure group ACS has approached Atlantia about taking a stake in the Italian group’s motorway unit, the Rome-based conglomerate said on Thursday.
The summary as at 08.04.21
European stocks are expected to open higher Thursday, tracking gains overnight in the Asia-Pacific markets following a rise in the U.S. stock futures.
- Asian share markets lagged as U.S. stock futures nudged to another record high after the Federal Reserve underlined its commitment to keeping policy super loose even as the economy enjoys a rapid recovery;
- Oil prices fell after official figures showed a big increase in U.S. gasoline stocks, causing concerns about demand for crude weakening in the world’s biggest consumer of the resource at a time when supplies around the world are rising;
- Federal Reserve officials remain wary about the ongoing risks of the coronavirus pandemic and are committed to bolstering the economy until its recovery is more secure, minutes of the U.S. central bank’s latest policy meeting showed on Wednesday;
- President Joe Biden on Wednesday made a fiery appeal for U.S companies to foot most of the bill for his $2 trillion-plus infrastructure plan, but signaled an openness to negotiate over exactly how much they would have to pay;
- Diplomats from major powers met separately on Wednesday with Iran and the United States to discuss how to bring both back into compliance with the 2015 nuclear deal that Washington abandoned three years ago;
- Holland-based technology investor Prosus has sold 2% of Tencent Holdings for $14.7 billion, the Chinese gaming and social media giant said, in the world’s largest-ever block trade;
- Italy recommended on Wednesday that AstraZeneca’s COVID-19 shot only be used on those over 60 and Britain that people under 30 should get an alternative, due to possible links between the vaccine and very rare cases of blood clots;
- HSBC is moving more than 1,200 staff in Britain to permanent working from home contracts, in one of the strongest indications yet of how banks are locking in changes to employees’ work patterns as a result of the pandemic to cut costs.
The summary as at 07.04.21
European stocks are expected to open in mixed territory on Wednesday as investors digest global market moves, particularly a pullback in the U.S. market on Tuesday.
- A gauge of Asian shares climbed to three-week highs as investors eyed the upcoming earnings season for further signs of a global economic recovery, while the dollar slipped to a two-week low;
- Oil prices edged higher on the prospects for stronger global economic growth amid increased COVID-19 vaccinations and a report that crude inventories in the United States, the world’s biggest fuel consumer, fell;
- The International Monetary Fund said on Tuesday unprecedented public spending to fight the COVID-19 pandemic, primarily by the United States, would push global growth to 6% this year, a rate unseen since the 1970s;
- Toshiba is considering a $20 billion offer from private equity firm CVC Capital Partners to take it private, a person familiar with the matter said, as the Japanese industrial conglomerate faces pressure from activist shareholders to improve governance;
- Iran and world powers held what they described as “constructive” talks on Tuesday and agreed to form working groups to discuss the sanctions Washington might lift and the nuclear curbs Tehran might observe as they try to revive the 2015 nuclear deal;
- Australia said it will ask the European Union to release more than 3 million doses of AstraZeneca’s COVID-19 vaccine, testing Brussels claim it is not blocking shipments, as the country struggles to vaccinate its population;
- Citibank has lodged an application with Australia’s Supreme Court of New South Wales to wind up two businesses run by Indian-British steel magnate Sanjeev Gupta as part of insolvency measures;
- France will contribute to a 4 billion-euro recapitalisation of Air France-KLM and more than double its stake to nearly 30%, under plans announced on Tuesday with European Union approval.
The summary as at 06.04.21
Asia’s stock markets rose as another batch of strong U.S. economic data bolstered the global outlook, while currency and bond markets paused for breath after a month of rapid gains in the dollar and in U.S. Treasury yield.
- Oil prices rose as a drop in the U.S. dollar made crude a more attractive buy, paring losses of more than 4% incurred overnight on the prospect of producers returning more than 2 million barrels per day of supply to the market by July;
- A recovery in China’s services sector picked up speed in March as firms hired more workers and business optimism surged, although inflationary pressures remained, a private sector survey showed;
- U.S. Treasury Secretary Janet Yellen said on Monday that she is working with G20 countries to agree on a global corporate minimum tax rate and pledged that restoring U.S. multilateral leadership would strengthen the global economy and advance U.S. interests;
- The U.S. Supreme Court handed Alphabet’s Google a major victory on Monday, ruling that its use of Oracle‘s software code to build the Android operating system that runs most of the world’s smartphones did not violate federal copyright law;
- Credit Suisse Group will detail losses from its relationship with Archegos Capital Management after dumping over $2 billion worth of stock to end exposure to the troubled investor, two sources familiar with the matter said;
- Australia said it had not yet received more than 3 million doses of previously promised AstraZeneca COVID-19 vaccine doses amid export curbs by the European Union, leaving a major hole in its early nationwide inoculation drive;
- SoftBank Group has agreed to buy a 40% stake in AutoStore for $2.8 billion, the Norway-based robotics firm said on Monday, in yet another big investment by the conglomerate in warehouse automation technology that optimizes e-commerce operations.
The summary as at 05.04.21
Markets in Europe are closed today because it is a bank holiday. US stock futures climbed in early morning trading on Monday as investors cheered a strong bounce in U.S. job growth last month amid accelerating vaccine rollout.
- Futures on the Dow Jones Industrial Average jumped 215 points. S&P 500 futures and Nasdaq 100 futures both traded in mildly positive territory;
- The Labor Department reported Friday that nonfarm payrolls increased by 916,000 in March, the highest since August 2020, while the unemployment rate fell to 6%. Economists surveyed by Dow Jones were expecting an increase of 675,000 and a jobless rate of 6%.;
- In Japan, the Nikkei 225 rose 0.79% on the day to 30,089.25 while the Topix index advanced 0.6% to close at 1,983.54;
- European Commission President Ursula von der Leyen said it herself: “The start was tough.” The European Union has had a bumpy Covid-19 vaccine rollout. The campaign has prompted complaints that regulators were too slow to approve the shots and led to a simmering tussle with AstraZeneca as the pharmaceutical giant repeatedly slashed its delivery commitments;
- Shares in India led losses in Asia-Pacific in Monday trade, as many major regional markets were closed for holidays. The Nifty 50 and BSE Sensex both dropped about 2% in Monday afternoon trade as investors grapple with a recent surge in Covid-19 cases;
- South Korea’s LG Electronics said on Monday it will wind down its loss-making mobile division — a move that is set to make it the first major smartphone brand to completely withdraw from the market. Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brand, to be gobbled up by smartphone titans Apple Inc and Samsung Electronics;
- Tesla just reported first-quarter vehicle production and delivery numbers for 2021. In total, it delivered 184,800 vehicles and produced 180,338 cars. All of the electric vehicles it produced were Model 3 sedans and Model Y crossover SUVs, though it also delivered 2,020 Model S sedans and Model X SUVs.
The summary as at 01.04.21
- Stocks crept higher following their weakest quarter in a year, while higher Treasury yields supported the dollar, as investors parsed the details of a $2 trillion U.S. government spending plan and hoped for strong jobs data later in the week;
- Crude prices rose, recouping some of the previous session’s losses on expectations that a meeting of OPEC and its allies later would yield output constraint in the face of resurgent COVID-19 infections in some regions;
- Asia’s factories stepped up production in March as a solid recovery in global demand helped manufacturers move past the setbacks of the pandemic, although rising costs are creating new challenges for businesses in the region;
- President Joe Biden on Wednesday called for a sweeping use of government power to reshape the world’s largest economy and counter China’s rise in a $2 trillion-plus proposal that was met with swift Republican resistance;
- Contract chipmaker TSMC said it plans to invest $100 billion over the next three years to increase capacity at its plants, days after Intel announced a $20 billion plan to expand its advanced chip making capacity;
- Investors on Wednesday tallied the fallout from Archegos Capital’s dramatic meltdown, with Nomura and Credit Suisse shares losing a collective $9 billion while heightened scrutiny of the hedge fund industry loomed;
- Italy is considering a less expensive route to win control of broadband operator Open Fiber, three sources familiar with the matter said on Wednesday, as it looks to play a steering role to boost connectivity across the country;
- A consortium of investors led by Italian state lender Cassa Depositi e Prestiti (CDP) said on Wednesday it had approved a sweetened offer for Atlantia’s 88% stake in motorway unit Autostrade per l’Italia.
The summary as at 30.03.21
The pan-European Stoxx 600 gained 0.5% in early trade, led by a 1.4% rebound for banks as almost all sectors and major bourses entered positive territory.
- Asian shares were mixed as global investors shook off worries about a hedge fund default that roiled global banking stocks overnight, while rekindled concerns about inflation pushed bond yields higher;
- Oil prices rose as shipping traffic resumed through the Suez Canal after days on hold and focus turned to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns;
- Global banks may lose more than $6 billion from the downfall of Archegos Capital, sources familiar with trades involving the U.S. investment firm said on Monday, and regulators and investors fear the episode could reverberate more widely;
- Shipping was on the move again late on Monday in Egypt’s Suez Canal after tugs refloated a giant container ship which had been blocking the channel for almost a week, causing a huge build-up of vessels around the waterway;
- Beijing approved a sweeping overhaul of Hong Kong’s electoral system, a senior politician who works with China’s parliament on matters relating to the former British colony’s mini-constitution, told Reuters;
- COVID-19 vaccines developed by Pfizer with BioNTech and Moderna reduced risk of infection by 80% two weeks or more after the first of two shots, according to data from a real-world U.S. study released on Monday;
- Canadian health officials said on Monday they would stop offering AstraZeneca’s COVID-19 vaccine to people under age 55 and require a new analysis of the shot’s risks and benefits based on age and gender;
- Brazilian energy firm Raizen, a joint venture between Cosan and Royal Dutch Shell, has chosen four investment banks to manage its initial public offering, expected to be one of the largest this year, raising up to 13 billion reais, four people familiar with the matter said on Monday.
The summary as at 29.03.21
US Stock futures dipped in early morning trading Monday after a rush of broad based late buying pushed the S&P 500 to a record high in the final minutes of the previous session. Futures on the Dow Jones Industrial Average fell 188 points. S&P 500 futures and Nasdaq 100 futures also both traded in negative territory.
- Asian share markets edged higher while oil prices slipped as the ship blocking the Suez Canal was re-floated, raising hopes the vital waterway could reopen and ease global shipping backlogs;
- The stranded container ship blocking the Suez Canal for almost a week was re-floated on Monday and is currently being secured, Inchcape Shipping Services said, raising hopes the busy waterway will soon be reopened;
- Chancellor Angela Merkel pressed Germany’s states on Sunday to step up efforts to curb rapidly rising coronavirus infections, and raised the possibility of introducing curfews to try to get a third wave under control;
- Myanmar security forces killed an anti-coup protester and wounded a toddler in fresh violence overnight, media reported, as activists called on armed ethnic groups in the diverse nation to back their struggle against military rule;
- Sweden’s H&M and other foreign companies facing a backlash in China after raising concerns about forced labour in Xinjiang should look into the issue seriously and not politicise their economic behaviour, Chinese officials said;
- A consortium led by Italian state lender CDP is working on a sweetened offer for Atlantia’s stake in Autostrade per l’Italia in a last-ditch attempt to salvage talks over the fate of the motorway business, three sources said;
- A trade union called for Deliveroo’s UK riders to strike when the meal delivery service floats on the stock market next month, saying on Sunday the action would highlight dissatisfaction with the company’s business model and approach to workers’ rights.
The summary as at 26.03.21
European stocks advanced at Friday’s open, following global sentiment higher as investors focus on the outlook for growth and inflation amid advances in Covid-19 vaccine rollouts.
- Asian shares recovered from a three-month low thanks to a late-day rally on Wall Street as optimism about the global economic recovery was overshadowed by rising tensions between the West and China;
- Oil prices bounced back from a plunge a day earlier on concerns that a large container ship that ran aground in the Suez Canal may block the vital shipping lane for weeks, squeezing supply;
- President Joe Biden vowed on Thursday to push China to play by international rules, criticized his Republican opponents and defended his policy to provide shelter to children crossing the U.S. border from Mexico at his first solo news conference since taking office;
- Reeling from the blockage in the Suez Canal, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted away from the vital waterway as a giant container ship remained wedged between both banks;
- In their first appearance before Congress since Trump supporters stormed the U.S. Capitol, the chief executives of Facebook, Google and Twitter were asked by U.S. lawmakers whether their platforms bore some responsibility for the riot: “yes or no?”;
- EU leaders voiced frustration on Thursday over a massive shortfall in contracted deliveries of AstraZeneca COVID-19 vaccines, as a third wave of infections surged across Europe;
- Burberry has lost a Chinese brand ambassador and its hallmark tartan design was scrubbed from a popular video game, becoming the first luxury brand assailed by the Chinese backlash to Western accusations of abuses in Xinjiang;
- German insurer Allianz is nearing a 2.5 billion euro deal to buy Aviva‘s Polish unit, trumping rival bids from Italy’s Generali and Dutch insurer NN, sources familiar with the matter told Reuters.
The summary as at 25.03.21
European stocks opened lower on Thursday, as investors consider the ramifications of a surge in coronavirus cases in the region, and EU leaders discuss possible blocks on vaccine exports.
- Asian equities bounced between gains and losses as a selloff in Chinese technology shares due to concerns they will be de-listed from U.S. bourses and worries about a semiconductor shortage rattled some investors;
- Oil prices skidded as fuel demand concerns re-emerged alongside fresh coronavirus pandemic lockdowns, trimming overnight gains spurred by the grounding of a giant container ship blocking crude shipments through the Suez Canal;
- German Chancellor Angela Merkel on Wednesday rejected demands for a vote of confidence in her government over a U-turn on a circuit-breaker lockdown over Easter that compounded discontent with her handling of the coronavirus pandemic;
- Shares in dual-listed Chinese companies fell sharply in Asia after the U.S. securities regulator adopted measures that would kick foreign companies off American stock exchanges if they do not comply with U.S. auditing standards;
- North Korea launched two ballistic missiles into the sea near Japan, Japan’s prime minister said, fuelling tension ahead of the Tokyo Olympics and ramping up pressure on the Biden administration as it finalises its North Korea policy;
- AstraZeneca said its COVID-19 vaccine was 76% effective at preventing symptomatic illness in a new analysis of its major U.S. trial – a tad lower than the level announced earlier this week in a report that was criticised for using outdated information;
- GlaxoSmithKline has dismissed Moncef Slaoui as chairman of a company controlled by the British drugmaker after an internal investigation found he had sexually harassed a GSK employee several years ago;
- Italy’s Leonardo shelved a listing of its U.S. electronics unit DRS in a surprise move that sent shares in the defence and aerospace firm down on Wednesday.
The summary as at 24.03.21
European stock markets are seen opening lower Wednesday, continuing the global weakness, as doubts about the speed of recovery from the Covid-19 pandemic weigh on sentiment.
- Asian shares hit a two-week low and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential U.S. tax hikes hit risk appetite, leading to a flight to safety;
- Oil prices edged higher as investors looked for bargains following the previous day’s plunge, but gains were capped as pandemic lockdowns in Europe and a build in U.S. crude stocks curbed risk appetite and raised oversupply fears;
- The European Commission on Wednesday will extend EU powers to potentially block COVID-19 vaccine exports to Britain and other areas with much higher vaccination rates, and to cover instances of companies backloading contracted supplies, EU officials said;
- Treasury Secretary Janet Yellen said on Tuesday the U.S. economy remains in crisis from the pandemic even as she defended developing plans for future tax increases to pay for new public investments;
- Intel will greatly expand its advanced chip manufacturing capacity as the new chief executive announced plans to spend as much as $20 billion to build two factories in Arizona and open its factories to outside customers;
- Hong Kong authorities suspended COVID-19 vaccinations with two batches of Pfizer/BioNTech’s shot citing defective packaging but said manufacturers indicated they had no reason to believe safety was at risk;
- Norway will block Rolls-Royce from selling a Norwegian maritime engine maker to a Russian company on national security grounds, its justice minister told parliament on Tuesday;
- Amazon.com will see its stake in Deliveroo fall to 11.5% when the British food delivery company goes public via an initial public offering, the IPO prospectus showed.
The summary as at 23.03.21
European stocks are expected to open lower Tuesday as concerns over a third wave of Covid infections in the region rattle investor sentiment.
- Asian stocks reversed earlier gains, weighed by Chinese markets as investors took profit on a recent rally in some mainland firms, although ebbing inflation fears helped shore up broader sentiment in the region;
- Oil prices fell on concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in fuel demand and as producers cut prices, indicating ample oil supply;
- Germany is extending its lockdown until April 18 and calling on citizens to stay at home for five days over the Easter holidays to try to break a third wave of the COVID-19 pandemic, Chancellor Angela Merkel said;
- The United States, the European Union, Britain and Canada imposed sanctions on Chinese officials on Monday for human rights abuses in Xinjiang, the first such coordinated Western action against Beijing under new U.S. President Joe Biden;
- President Joe Biden will be briefed by advisers this week on infrastructure, climate and jobs proposals being considered by the White House that could collectively cost as much as $4 trillion, according to people familiar with discussions;
- British drugmaker AstraZeneca may have included outdated information from its COVID-19 vaccine clinical trial, the U.S. National Institute of Allergy and Infectious Diseases (NIAID) said;
- Miner Rio Tinto said it will form an Indigenous advisory group to identify gaps in current protocols for managing Indigenous culture in Australia, nearly a year after destruction of an important heritage site for a mine;
- Credit Agricole Italia said on Monday that Italian market regulator Consob has cleared the publication of the investor document detailing its offer to buy rival Creval, paving the way for the launch of the bid.
The summary as at 22.03.21
European stocks opened in mixed territory on Monday, with investors watching Turkey closely following President Erdogan’s surprise decision this weekend to replace the central bank’s chief.
- Asian stocks turned mixed and bonds bounced as a plunge in the Turkish lira sparked talk that capital controls might be needed to stem the rout, though the wider fallout was relatively restrained for the moment;
- Oil prices resumed their decline, as worries about a drop in demand for fuel products in the wake of yet more European lockdowns dominated trading;
- Turkey’s lira plunged 15% to near its all-time low after markets opened following President Tayyip Erdogan’s shock weekend decision to oust a hawkish central bank governor and install a like-minded critic of high interest rates;
- Fewer Europeans trust the AstraZeneca COVID-19 vaccine after several countries reported side-effects, such as blood clots, an opinion poll by YouGov showed, even though scientific studies have found it is safe and effective;
- Germany is set to extend a lockdown to contain the COVID-19 pandemic into its fifth month, according to a draft proposal, after infection rates exceeded the level at which authorities say hospitals will be overstretched;
- Waste and water management company Veolia on Sunday rejected a proposal by Suez to negotiate a takeover if the two companies agreed on the sale of most of Suez’s French assets to investment funds Ardian and Global Infrastructure Partners;
- The impact of the global semiconductor shortage on the auto industry spread on Saturday, as Stellantis warned its highly profitable pickup trucks were hit, while Ford Motor said it would cut more U.S. production;
- Administrators of British-based Greensill Capital have laid off about 440 workers following the finance firm’s collapse, they said on Saturday.
The summary as at 18.03.21
European stocks moved slightly higher on Thursday as markets around the world react to the Federal Reserve’s latest outlook on the U.S. economy.
- Asian shares and U.S. stock futures rose after the Federal Reserve committed to maintaining accommodative monetary policy and projected a rapid jump in U.S. economic growth this year as the COVID-19 crisis eases;
- Oil prices dropped for a fifth day after official data showed a sustained rise in U.S. crude and fuel inventories, while the ever-present pandemic clouded the demand outlook;
- The U.S. economy appears set to leave other developed markets in the dust this year with the largest annual growth spurt in decades, new Federal Reserve forecasts indicate, but that divergence is not worrying to the central bank’s top official;
- The Bank of England will probably try on Thursday to keep a lid on expectations that Britain’s economy is heading for a strong, vaccine-boosted recovery after suffering its worst crash in three centuries last year;
- Britain will see a significant reduction in the amount of COVID-19 vaccines available at the end of the month due to a cut in manufacturing supply, it said on Wednesday, in a setback to one of the world’s fastest inoculation rollouts;
- Vodafone has priced shares in infrastructure unit Vantage Towers at 24 euros each, valuing the firm at 12.1 billion euros in one of Europe’s largest initial public offerings this year, Vantage Towers said;
- A Milan court acquitted energy company Eni, its chief executive and Royal Dutch Shell on Wednesday in the oil industry’s biggest corruption case revolving around the $1.3 billion acquisition of a Nigerian oilfield a decade ago;
- Deliveries of turboprop aircraft built by Franco-Italian manufacturer ATR plunged to an 18-year low last year as regional airlines bear the brunt of the coronavirus crisis, company figures showed on Wednesday.
The summary as at 17.03.21
European stocks are expected to open lower on Wednesday as global investors await the outcome from the latest meeting of the Federal Reserve.
- Asian stocks fell, tracking Wall Street, as investors waited to see if the U.S. Federal Reserve will signal a faster path toward policy normalisation than previously expected;
- A resurgent economy, percolating inflation and a stock market ripping higher don’t seem to make much of a recipe for easy monetary policy. But that’s the position in which the Federal Reserve finds itself. The challenge for the central bank this week will be to explain that position to investors and assure them that even if the status quo remains, that won’t provoke policymakers to change course, nor should they;
- Oil prices slipped for a fourth day on worries about rocky demand in Europe, even as hopes of a recovery in U.S. refinery activity were boosted by industry data that showed U.S. crude stockpiles unexpectedly fell last week;
- Russian President Vladimir Putin likely directed efforts to try to swing the 2020 U.S. presidential election to Donald Trump, according to an American intelligence report released on Tuesday that sources said would likely trigger U.S. sanctions on Moscow;
- Japanese exports fell much faster than expected in February as U.S. and China-bound shipments weakened, a source of concern for the world’s third-largest economy as it tries to prop up growth;
- In a major victory for unions, Uber’s more than 70,000 British drivers will be paid the minimum wage while picking up and driving passengers as part of the ride-hailing company’s agreement to grant workers’ rights after it lost a groundbreaking Supreme Court case last month;
- Australia’s pharmaceutical regulator said the rollout of the AstraZeneca COVID-19 vaccine would continue despite many European nations pausing vaccination to investigate serious side effects reported in some recipients;
- Volkswagen ST announced earnings per share of €13.87 on revenue of €67.40B. Analysts polled by Investing.com anticipated EPS of €11.31 on revenue of €66.69B. Volkswagen ST shares are up 55% from the beginning of the year, still down 14.77% from its 52 week high of €309.40 set on March 16. They are outperforming the S&P Global 100 which is up 4.65% from the start of the year;
- The G4S takeover saga finally came to an end on Tuesday after a majority of the security company’s shareholders accepted a 3.8 billion pound offer from U.S. rival Allied Universal, snubbing hostile Canadian bidder GardaWorld;
- Atlantia agreed to extend talks with a consortium led by state lender CDP over the sale of its 88% stake in motorway unit Autostrade per l’Italia to March 27, the Italian infrastructure group said on Tuesday.
The summary as at 16.03.21
European stocks are expected to open higher Tuesday as market attention focuses on the global economic recovery and the latest meeting of the U.S. Federal Reserve.
- Asian stocks rose, tracking an advance by Wall Street’s main indexes to record highs, as investors looked to key central bank meetings this week, starting with the U.S. Federal Reserve;
- Oil prices fell, extending declines for a third day, as concerns about rising stockpiles in the United States added to the threat to demand posed by countries including Germany and France halting COVID-19 vaccinations;
- Germany, France and Italy said on Monday they would suspend AstraZeneca COVID-19 shots after several countries reported possible serious side-effects, but the World Health Organization (WHO) said there was no proven link and people should not panic;
- The European Central Bank is hopeful brighter data in coming quarters will confirm that the amount of its 1.85 trillion euro Pandemic Emergency Purchase Programme set in December was appropriate, ECB policymaker Mario Centeno said;
- With a promise of “shots in arms and money in pockets,” President Joe Biden on Monday kicked off a week of promotion and travel for the $1.9 trillion pandemic relief bill he signed into law last week to help the country move past the COVID-19 pandemic;
- Volkswagen plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla and speed up mass adoption of battery-powered cars;
- Digital payments giant Stripe’s value soared to $95 billion after it capitalised on a boom in ecommerce with a round of funding that pushed it past Elon Musk’s SpaceX as the most valuable U.S. startup;
- Roche is filling a testing portfolio gap by buying U.S.-based GenMark Diagnostics in a $1.8 billion deal that the Swiss pharmaceuticals manufacturer said taps one of the fastest-growing diagnostics areas.
The summary as at 15.03.21
The pan-European Stoxx 600 climbed 0.7% in early trade, with travel and leisure stocks jumping 2.4% to lead gains as all sectors and major bourses entered positive territory since the start of the pandemic.
- Global stock prices inched higher while U.S. bond yields hovered near a 13-month peak as investors bet U.S. economic growth will accelerate after the $1.9 trillion stimulus bill President Joe Biden signed into law last week;
- Oil prices edged up, with Brent drifting near $70 a barrel, propped up by output cuts from major producers and optimism about global economic and fuel demand recovery in the second half of the year;
- China’s factory and retail sector activity surged in the first two months of the year, beating expectations, as the economy consolidated its brisk recovery from the coronavirus paralysis of early 2020;
- U.S. President Joe Biden will name Gene Sperling to lead implementation of the $1.9 trillion COVID-19 relief plan signed into law last week, an administration official said on Sunday;
- London police faced a backlash from the public on Sunday and an official inquiry into their actions after using heavy-handed tactics to break up an outdoor vigil for a woman whose suspected killer is a police officer;
- AstraZeneca said on Sunday a review of safety data of people vaccinated with its COVID-19 vaccine has shown no evidence of an increased risk of blood clots;
- Carmaker Volkswagen plans to cut up to 4,000 jobs at its plants in Germany by offering early or partial retirement to older employees in a move that could cost several hundred million euros, company sources said on Sunday;
- The board of French food group Danone on Sunday voted to oust Emmanuel Faber as chairman, Le Figaro newspaper reported, as the group tries to draw a line under a management crisis and growing pressure from shareholders.
The summary as at 12.03.21
European markets are heading for a fractionally lower open Friday, but are on course for a positive week, as a retreat in bond yields eased global jitters about rising inflation.
- Asian shares pushed higher after U.S. President Joe Biden signed a $1.9 trillion stimulus bill into law, and as a retreat in bond yields overnight eased global concerns about rising inflation;
- Brent crude prices eased but hovered near $70 a barrel as production cuts by major oil producers constrained supply, with optimism about a recovery in demand for the resource in the second half of the year also lending support;
- The European Central Bank said on Thursday it would accelerate money-printing to keep a lid on euro zone borrowing costs, signaling to skeptical markets that it is determined to lay the foundation for a solid economic recovery;
- President Joe Biden directed U.S. states on Thursday to make all adults eligible for the coronavirus vaccine by May 1 and urged Americans to stay vigilant or face more restrictions, hours after he signed a $1.9 trillion stimulus bill into law;
- Washington has told the European Union that it should not expect to receive AstraZeneca COVID-19 vaccines manufactured in the United States any time soon, two EU sources said on Thursday, in a new blow to the bloc’s supplies;
- Canada on Thursday said the AstraZeneca COVID-19 vaccine is safe after Denmark and Norway temporarily suspended its use amid reports that blood clots had formed in some who had received the shot;
- Rolls-Royce has enough funding to weather the crisis in the aviation industry caused by the pandemic, its chief executive said on Thursday, after the engine maker plunged to a record 4 billion pound underlying loss for 2020;
- BMW said on Thursday that it was back on a profitable track in 2021 after recovering from shutdowns and a serious dent to sales due to the COVID-19 pandemic in the first half of last year.
The summary as at 11.03.21
European stocks are expected to open higher Thursday, as markets react to positive momentum stateside following the final approval of President Joe Biden’s $1.9 trillion Covid relief bill.
- Asian stocks extended their rebound from a two-month low after a report on U.S. consumer prices calmed concerns about inflation and lifted the Dow Jones Industrial Average to a record close;
- Crude oil prices rose as vaccine rollouts bolstered the economic outlook and U.S. fuel stocks fell sharply, although gains were capped by a surge in crude oil inventories after last month’s Texas storm;
- The U.S. House of Representatives gave final approval on Wednesday to one of the largest economic stimulus measures in American history, a sweeping $1.9 trillion COVID-19 relief bill that gives President Joe Biden his first major victory in office;
- The European Central Bank is likely to signal faster money printing on Thursday to keep a lid on borrowing costs but it will stop short of adding firepower to its already aggressive pandemic-fighting package;
- Japan’s wholesale prices fell at a slower pace in February for a third straight month, offering an encouraging sign a recent rebound in fuel costs and pick-up in domestic demand will ease deflationary pressures across the economy;
- The world’s two largest aircraft leasing companies are combining to create a new financing giant after Ireland’s AerCap finalised a deal worth more than $30 billion to buy the leasing business of General Electric;
- Credit Suisse faces questions from regulators and insurers as it grapples with the fallout from the collapse of $10 billion worth of funds linked to British financial services firm Greensill Capital;
- HSBC will phase out its support for the coal industry in the developed world by 2030 and in the developing world by 2040, the bank said, bowing to investor pressure to toughen its stance on fossil fuel financing.
The summary as at 10.03.21
European stocks are expected to open lower Wednesday, as markets lose momentum seen earlier in the week following a rally on Wall Street.
- Asian stocks bounced back from a two-month low after bond yields eased following a well-received auction and as Chinese shares found a footing after recent steep falls on policy tightening worries;
- Oil fell for a third straight session as investors took profits while looking ahead to U.S. inventories data due later in the day for pointers on where prices will head next;
- The U.S. House of Representatives voted on Tuesday to advance President Joe Biden’s $1.9 trillion COVID-19 relief bill, clearing the way for the measure to be considered on Wednesday, when it is expected to pass;
- China’s factory gate prices rose at the fastest pace since November 2018 in February as manufacturers raced to fill export orders, raising expectations for robust growth in the world’s second-largest economy in 2021;
- Shares of electric vehicle maker Tesla surged nearly 20% on Tuesday, rebounding from a deep selloff with its largest daily gain in a year after data showed an increase in China sales and an analyst raised his rating on the stock;
- Swiss bank Credit Suisse has appointed receivers to recover a bridging loan of about $140 million made to a Greensill company in Australia, two people familiar with the matter told Reuters;
- Norway has suspended the sale of a Norwegian engine maker owned by Rolls-Royce Holdings to a Russian-controlled company while it assesses the security implications for the country’s navy and the civilian sector, the government said on Tuesday;
- A federal judge on Tuesday approved Daimler’s $1.5 billion settlement to resolve a U.S. government probe into the German automaker’s use of undisclosed software that allowed excess diesel pollution to be emitted by 250,000 of its vehicles in the United States.
The summary as at 09.03.21
European stocks are expected to open mostly higher Tuesday, extending a rally in the previous session that saw Germany’s DAX rise 3.3% and hit a new intraday high.
- Japanese shares rose as investors sold technology stocks and shifted some of those funds to consumer goods companies expected to benefit from an economic recovery from the pandemic;
- Oil prices rose on expectations of a recovery in the global economy after the U.S. Senate approved a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventories in the United States, the world’s biggest fuel consumer;
- Japan’s economy expanded at a slower-than-initially-reported pace in October-December, with firms tightening spending on plant and equipment as the coronavirus pandemic clouded their business plans;
- The U.S. House of Representatives will take up by Wednesday the Senate version of the sweeping $1.9 trillion coronavirus relief package backed by President Joe Biden, Speaker Nancy Pelosi said on Monday;
- Shares of GameStop jumped more than 40% on Monday and other so-called meme stocks rallied, lifted by news from the video game retailer and expectations that investors may plow funds from coming stimulus checks into the equity market;
- Greensill Capital filed for insolvency on Monday after losing insurance coverage for its debt repackaging business and said in its court filing that its largest client, GFG Alliance, had started to default on its debts;
- Indonesia has approved AstraZeneca’s COVID-19 vaccine for emergency use, Penny K. Lukito, the chief of the country’s food and drug agency, told a news conference;
- Telecom Italia and unions agreed on Monday to cut up to 1,300 jobs in Italy this year through a voluntary scheme, two union sources said, as the country’s biggest phone group strives to revamp its business in the COVID-19 crisis.
The summary as at 08.03.21
European stocks are expected to open higher Monday, buoyed by positive U.S. sentiment as the U.S.′ Covid relief bill is expected to be approved by the House of Representatives later this week.
- Share markets turned mixed as the U.S. Senate passage of a $1.9 trillion stimulus bill augured well for faster global economic growth, but also put fresh pressure on Treasuries and tech stocks with lofty valuations;
- Brent crude futures surged above $70 a barrel for the first time since the COVID-19 pandemic began, while U.S. crude touched its highest in more than two years, following reports of attacks on Saudi Arabian facilities;
- Yemen’s Houthi forces fired drones and missiles at the heart of Saudi Arabia’s oil industry on Sunday, including a Saudi Aramco facility at Ras Tanura vital to petroleum exports, in what Riyadh called a failed assault on global energy security;
- The European Union should shake off its ill will and build a good relationship with Britain as sovereign equals, Britain’s top EU adviser David Frost said on Sunday, promising to stand up for the country’s interests;
- French billionaire Olivier Dassault was killed on Sunday in a helicopter crash, a police source said, with President Emmanuel Macron paying tribute to the 69-year old conservative politician;
- Austrian authorities have suspended inoculations with a batch of AstraZeneca’s COVID-19 vaccine as a precaution while investigating the death of one person and the illness of another after the shots, a health agency said on Sunday;
- Veolia said on Sunday it would announce a proposal later this week that it hoped would positively end the conflict with French waste and water management firm Suez.
The summary as at 05.03.21
European markets are set for a lower open Friday as another surge in bond yields continues to roil global stocks.
- Asian stocks skidded to one-month lows as rising U.S. Treasury yields again rattled equity investors while hoisting the dollar to a three-month high, which in turn dragged the Japanese yen;
- Oil prices rose, extending gains from the previous session, after OPEC and its allies agreed not to increase supply in April as they await a more substantial recovery in demand amid the coronavirus pandemic;
- The United States on Thursday agreed to a four-month suspension of retaliatory tariffs imposed on British goods such as Scotch whisky over a long-running aircraft subsidy row, with both sides pledging to use the time to resolve the dispute;
- China set a modest annual economic growth target, at above 6%, and pledged to create more jobs in cities than last year, as the world’s second-biggest economy planned a careful course out of a year disrupted by the effects of COVID-19;
- U.S. Federal Reserve Chair Jerome Powell on Thursday repeated his pledge to keep credit loose and flowing until Americans are back to work, rebutting investors who have openly doubted he can stick to that promise once the pandemic passes and the economy surges on its own;
- Australia has asked the European Commission to review a decision by Italy to block a shipment of AstraZeneca’s COVID-19 vaccine, while stressing the missing doses would not affect the rollout of Australia’s inoculation programme;
- Lufthansa may permanently ground more jets to emerge leaner from the coronavirus pandemic, the German airline group said on Thursday, as it reported a record 6.7 billion euro loss for 2020;
- The Auditing Association of German Banks registered complaints about Greensill Bank with Germany’s financial watchdog BaFin in early 2020, a spokesman told Reuters on Thursday;
- One of the main highlights today will be the US jobs report for February, which is also the first jobs report to entirely cover the Biden administration’s time in office. Recent months have seen a weakening in the pace of the labour market recovery, with the 3-month average change in nonfarm payrolls standing at just +29k, the slowest since the height of the pandemic last year.
The summary as at 04.03.21
European markets are heading for a lower open Thursday as a rise in bond yields saw jitters return to global stocks once again.
- Resurgent worries about rising U.S. bond yields hit global shares as investors waited to see if Federal Reserve Chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs;
- Oil prices rose for a second straight session, as the possibility that OPEC+ producers might decide against increasing output at a key meeting later in the day lent support, alongside a drop in U.S. fuel inventories;
- Finance minister Rishi Sunak delivered what he hopes will be a last big spending splurge to get Britain’s economy through the COVID-19 crisis, and announced a corporate tax hike from 2023 as he began to focus on the huge hit to the public finances;
- The U.S. Senate delayed the start of debate on President Joe Biden’s $1.9 trillion COVID-19 relief bill until at least Thursday after reaching a deal to phase out $1,400 payments to higher-income Americans in a compromise with moderate Democratic senators;
- The Democratic-controlled U.S. House of Representatives passed a flagship election reform bill on Wednesday that would update voting procedures and require states to turn over the task of redrawing congressional districts to independent commissions;
- Newly-formed Stellantis, a combination of Peugeot-maker PSA and Fiat Chrysler (FCA), wants to use its clout to take on rivals racing to produce more electric vehicles, Chief Executive Carlos Tavares said on Wednesday;
- ASML Holding has extended a deal to sell chip manufacturing equipment to Semiconductor Manufacturing International Corp, China’s largest chipmaker, until the end of this year, the Dutch company said in a statement on Wednesday;
- Italy’s No. 2 bank UniCredit plans to appoint more women to its board, including Dame Jayne-Anne Gadhia, the former head of Virgin Money and founder of open banking fintech Snoop.
The summary as at 03.03.21
European stocks are expected to open higher at the market open Wednesday, with investors in the U.K. keen to see what taxation and spending plans the British government reveals in the annual budget statement.
- Japanese shares eked out gains as investors picked up cyclical stocks on hopes of a quicker economic recovery from the pandemic-led recession;
- Oil prices rose, boosted by demand hopes on progress made in U.S. vaccine rollouts, while uncertainty over how much supply OPEC+ will restore to the market at its Thursday meeting and a big build in U.S. crude stocks capped gains;
- The United States will have enough COVID-19 vaccine for every American adult by the end of May, President Joe Biden said on Tuesday after Merck & Co agreed to make rival Johnson & Johnson’s inoculation;
- China’s services sector activity grew at its slowest pace in 10 months in February as firms struggled with sluggish demand and high costs, a private sector survey showed, prompting them to cut jobs;
- Negotiations over President Joe Biden’s $1.9 trillion COVID-19 relief bill go into overdrive this week as the U.S. Senate begins debate over the sweeping legislation and lawmakers jockey to include pet projects, while tossing others overboard;
- Rio Tinto said its chair and a board director would step down, bowing to investor pressure over the destruction of two ancient Aboriginal rock shelters for an iron ore mine last year in Western Australia;
- Boeing has raised concerns over the design of arch-rival Airbus’ newest narrow-body jet, the A321XLR, saying a novel type of fuel tank could pose fire risks;
- France’s banking industry body wants a new European Union law that would force non-EU banks to shift swathes of euro derivatives clearing from the City of London to Frankfurt, people familiar with the matter said.
The summary as at 02.03.21
European stocks are expected to open in negative territory on Tuesday, retreating from gains made in the previous trading session.
- Japanese stocks fell, giving up early gains as some investors booked profits on defensive energy and utility shares before the end of the fiscal year this month;
- Oil prices fell more than 1%, extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping;
- The U.S. Senate will start debating President Joe Biden’s $1.9 trillion coronavirus relief bill this week, Senate Majority Leader Chuck Schumer said on Monday after Democrats backed down from an effort to raise the minimum wage to $15 as part of it;
- Former French President Nicolas Sarkozy was found guilty of corruption on Monday and sentenced to three years in prison, a stunning fall from grace for a man who for five years bestrode the national and global stage;
- The United States is expected to impose sanctions to punish Russia for the poisoning of Kremlin critic Alexei Navalny as early as Tuesday, two sources familiar with the matter said;
- Fiat Chrysler Automobiles pleaded guilty on Monday to charges it conspired with company executives to make illegal, lavish gifts to United Auto Workers (UAW) leaders and undermined workers’ confidence in collective bargaining;
- Problems at AstraZeneca’s European production site in January kicked off a six-week push to get a version of its COVID-19 vaccine made at an Indian facility approved by Canada’s drug regulator, according to the Canadian pharmaceutical company that filed the application;
- France’s Danone said on Monday its board has voted to separate the chairman and chief executive roles held by Emmanuel Faber, and launch the search for a new CEO following calls from several shareholders to shake up governance;
- Zoom Video Commuinications Inc forecast current-quarter revenue above expectations, as the company expects millions of people to continue using its video-conferencing platform to work remotely and attend online classes, sending its shares up 10%.
The summary as at 01.03.21
European opened higher on Monday as global markets rally on falling U.S. Treasury yields and boosted by positive news on the coronavirus vaccine front.
- Asian shares rallied as some semblance of calm returned to bond markets after last week’s wild ride, while progress in the huge U.S. stimulus package underpinned optimism about the global economy;
- Oil prices rebounded more than $1 after the U.S. House of Representatives passed a huge stimulus package, although a drop in China’s February factory activity growth capped gains;
- Iran on Sunday ruled out holding an informal meeting with the United States and other major powers to discuss ways to salvage the unravelling 2015 nuclear deal, insisting Washington must first lift all its unilateral sanctions;
- A U.S. Centers for Disease Control and Prevention advisory panel voted unanimously on Sunday to recommend Johnson & Johnson’s COVID-19 shot for widespread use, and U.S. officials said initial shipments would start on Sunday;
- Protesters marched in Myanmar in defiance of a crackdown by security forces that killed at least 18 people a day earlier, as calls grew for a more united international response after the worst violence since a coup one month ago;
- AstraZeneca has sold its 7.7% stake in Moderna for more than $1 billion after the U.S. biotechnology company’s shares soared on the back of its coronavirus vaccine breakthrough, The Times reported;
- Credit Suisse is exploring ways to reduce ties to Greensill Capital over concerns about the finance company’s exposure to a single client, U.K.-based steel magnate Sanjeev Gupta, The Wall Street Journal reported on Sunday;
- British insurer Aviva plans to become a net zero carbon emissions company by 2040, it said, claiming this was the most demanding target set by any major insurer worldwide.
The summary as at 26.02.21
- Asian stocks skidded to one-month lows as a rout in global bond markets sent yields flying and spooked investors amid fears the heavy losses suffered could trigger distressed selling in other assets;
- Oil prices fell as a collapse in bond prices led to gains in the U.S. dollar and expectations grew that with oil prices back above pre-pandemic levels, more supply is likely to come back to the market;
- Katherine Tai, President Joe Biden’s top trade nominee, backed tariffs as a “legitimate tool” to counter China’s state-driven economic model and vowed to hold Beijing to its prior commitments, while promising a sweeping new approach to U.S. trade;
- President Joe Biden on Thursday directed U.S. military air strikes in eastern Syria against facilities belonging to what the Pentagon said were Iran-backed militia, in a calibrated response to rocket attacks against U.S. targets in Iraq;
- Facebook ended a one-week blackout of Australian news on its popular social media site on Friday and announced preliminary commercial agreements with three small local publishers;
- AstraZeneca boss Pascal Soriot said on Thursday he hoped to meet the European Union’s expectations on the number of COVID-19 vaccines the company can deliver to the bloc in the second quarter, after big cuts in the first three months of the year;
- Italy’s Monte dei Paschi said on Thursday it was working to reduce its legal risks while the European Union assessed the state-owned bank’s ability to stay in business before unlocking more public aid;
- Saint-Gobain’s Chief Executive Pierre-André de Chalendar will step down this summer, the French construction materials group announced on Thursday, while it reported record second-half results, fuelled by an increased demand on the renovation market which should continue in the following years.
The summary as at 25.02.21
- Risk appetite showed signs of returning to global markets over the last 24 hours as Fed Chair Powell stuck to his reassuring tone and continued to signal that the central bank would keep policy accommodative for some time to come.
- Perhaps the most headline-grabbing comment from Powell was that it could take more than 3 years before the Fed reached its inflation goal of 2%, and he reaffirmed his message that the labour market was very far from the Fed’s goal.
- Energy stocks saw the largest gains thanks to another sizeable rise in oil prices. In fact, both Brent crude and WTI climbed to their highest levels in over a year yesterday, at $67.04/bbl and $63.22/bbl respectively, as the combination of tighter supplies and recovering economic demand proved supportive, and they’re holding those levels this morning.
- Overnight in Asia, markets have taken Wall Street’s lead with the Nikkei, Hang Seng, Shanghai Comp and ASX all rising. Futures on the S&P 500 are also trading higher.
- Multiple newspapers in the UK have reported that the government is potentially planning for a rise in corporation tax at next week’s budget on Wednesday.
- Staff at the FDA in the US wrote that Johnson & Johnson vaccine was safe and effective, which comes ahead of an FDA committee meeting tomorrow where they will be discussing whether to give it an emergency use authorization. Unlike the other vaccines authorised in the US, the Johnson & Johnson vaccine only requires a single dose, and the company has said that they will initially be able to provide 4m shots.
- The German GDP reading for Q4 was revised up to show +0.3% growth quarter-on-quarter (vs. +0.1% initial estimate). Looking at the breakdown, private consumption saw the biggest hit, though savings rate rose again to 17.7% which supports the argument that pent-up demand will support the economy in the summer half and potentially add to emerging inflationary pressures.
- The other main data release were the new home sales figures from the US, which rose to a stronger-than-expected annualised rate of 923k in January (vs. 856k expected).
- To the day ahead now, and data releases from the US include the second estimate of Q4 GDP, weekly initial jobless claims and the preliminary January durable goods orders reading. Over in Europe, there’s also the final Euro Area consumer confidence reading for February, and the January M3 money supply figure.
The summary as at 24.02.21
- Today markets the one-year anniversary of the initial Covid market slump where the markets fell in excess of 3% on Monday after we learnt that Italian cases had shot up over the weekend. Indeed, since this point the NASDAQ is actually up just over 46%, while the S&P 500 has gained c.20%.
- Asian markets are weaker this morning with the Hang Seng leading the declines on news that the city will raise stamp duty on stock trading.
- All eyes were on Fed Chair Powell yesterday, who told Congress there was “hope for a return to more normal conditions” this year but signaled that the central bank intended to maintain its heavy support of the economy. His comments pointed to no early Fed tightening of monetary policy or drawdown of asset purchases even with a brighter economic outlook – and helped technology shares claw back most of their losses after a sharp fall early in the day.
- The prospect for an improvement in the US Covid-19 situation, combined with large-scale fiscal stimulus backed by congressional Democrats and President Joe Biden – has prompted many economists to upgrade their growth forecasts for 2021.
- In a sign of just how much demand is lying latent, EasyJet plc reported that ticket sales more than quadrupled shortly after UK Prime Minister Johnson indicated that international travel could begin as soon as May 17.
The summary as at 19.02.21
- Global equities resumed their decline yesterday as concerns continued to rise among investors that higher sovereign bond yields could call a halt on the recent strong rally in risky assets.
- Overnight, Asian markets have taken Wall Street’s lead with the Nikkei, Hang Seng, Shanghai Comp, CSI and Kospi all trading lower. Futures on the S&P are down –0.21%.
- Weak economic data came out of the US, where the weekly initial jobless claims for the week through February 13 hit a 4-week high of 861k (vs. 773k expected), and the previous week’s reading was also revised up to +55k. The weekly frequency of this reading means it’s one of the timeliest indicators we get on the state of the economy.
- Oil prices reversed after hitting their highest levels in more than a year as the disruption to oil refineries in Texas remains the dominant story. Prices are being weighed down by news that the White House is willing to talk to Iran to discuss a “diplomatic way forward” in efforts to return to the nuclear deal, a move which could potentially lead to more crude exports from the nation.
- The release of the ECB minutes yesterday revealed that it was mentioned that “stock prices could eventually become vulnerable to a rise in real yields globally.” Another notable line from the minutes was that “it was argued that the fast rebound in growth foreseen in the December staff projections might be too optimistic, with growth in the second quarter of 2021 possibly at risk from extended lockdowns.”
- Mario Draghi’s new government in Italy resoundingly won a confidence vote in the lower house yesterday by a 535-56 vote, which comes on the heels of the big victory in the Senate the previous day.
- Walmart had its worst day since March last year after the company said that net sales and earnings per share were both expected to decline in FY22.
- Today’s main market highlights will be the release of the flash PMIs from around the world, which will give an initial indication of how the global economy has been faring into February.
- Corporate earnings will remain a key driver of individual share price action on Friday, with Danone, Hermes, Renault, Allianz and Swiss Re among the blue-chip companies reporting before the bell.
The summary as at 17.02.21
- U.S. Treasury yields hit one-year highs on Wednesday, lending support to the dollar but pressuring lofty valuations for stocks, as investors reckoned that a stimulus-fuelled global recovery will eventually bring rising inflation;
- A historic winter storm has killed at least 21 people, left millions of Texans without power and spun killer tornadoes into the U.S. Southeast on Tuesday;
- China will pay a price for its human rights abuses, U.S. President Joe Biden warned on Tuesday, responding to queries at a televised event on the Asian nation’s handling of Muslim minorities in its far western region of Xinjiang;
- Opponents of Myanmar’s military coup called for more big protests on Wednesday to show that the army’s assertion of widespread public support for overthrowing elected leader Aung San Suu Kyi and holding new elections was false;
- Oil major BP is launching its first share award scheme to rally its more than 60,000 employees around CEO Bernard Looney’s plan to shift to renewable energy following a bruising year of mass layoffs, bonus suspensions and spending cuts;
- Nestle said it would sell Pure Life and some other struggling North American water brands to two private equity firms for $4.3 billion, as the food giant doubles down on its premium offerings including Perrier;
- German sportswear maker Adidas plans to sell or spin-off its underperforming Reebok brand, 15 years after it bought the U.S. fitness label to help compete with arch-rival Nike;
- Sales at Kering’s star Gucci fashion brand fell more than expected in the fourth quarter as the COVID-19 pandemic kept consumers from travelling abroad and shopping;
- Gucci drives the bulk of revenues and profits at the French conglomerate and has been one of the industry’s top performers in recent years.
The summary as at 16.02.21
- Asian shares advanced, putting world equities on course to extend their bull run for a 12th consecutive session as optimism about the global economic recovery and expectations of low-interest rates drive investments into riskier assets;
- Oil prices rose as a cold front shut wells and refineries in Texas, the biggest crude producing state in the United States, the world’s biggest oil producer;
- The World Health Organization on Monday listed AstraZeneca and Oxford University’s COVID-19 vaccine for emergency use, widening access to the relatively inexpensive shot in the developing world;
- The eurozone is likely to decide between March and May when and how governments would start tapering support to their economies as vaccination campaigns allow the lifting of pandemic lockdowns and economic activity picks up, top eurozone officials said on Monday;
- Bank of Japan Governor Haruhiko Kuroda said the recent stock price rally reflected market optimism over the global economic outlook, brushing aside views its ultra-loose monetary policy was fueling an asset price bubble;
- BHP reported its best first-half profit in seven years and declared a record interim dividend, as top metals user China’s strong appetite for iron ore to support its infrastructure push kept prices elevated;
- French tire manufacturer Michelin reported a 2020 full-year net profit of 625 million euros ($758.6 million), a sharp decline from 2019′s 1.73 billion euros. However, the company projected up to 10% growth in its markets for 2021 and increased its dividends to shareholders;
- Glencore Plc reinstated its dividend on the back of record trading profits as the world’s biggest commodity trader reports its final results under the leadership of billionaire Chief Executive Officer Ivan Glasenberg;
- Glencore benefited from profitable bets on volatile oil swings in the first half of the year, and metals earnings jumped after prices soared following a plunge earlier in 2020. It’s also seeing a turnaround at the long-troubled African copper business. The company has brought its debt back down to within a target range and said it’s planning for further improvements this year;
- Norway’s oil industry employers struck a wage bargain with the Safe labour union, preventing a strike at the Mongstad crude terminal and shutdowns of major offshore oil and gas fields;
- Italy has given a green light to the takeover bid Credit Agricole Italia plans to make for small lender Credito Valtellinese (Creval), the French bank’s Italian arm said on Monday.
The summary as at 15.02.21
- Asian shares advanced to record highs as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery amid new fiscal aid from Washington;
- Oil prices rose to their highest in more than a year, after a Saudi-led coalition fighting in Yemen said it intercepted an explosive-laden drone fired by the Iran-aligned Houthi group, raising fears of fresh Middle East tensions;
- Japan’s economy expanded more than expected in the fourth quarter, extending the recovery from its worst postwar recession thanks to a rebound in overseas demand that boosted exports and capital spending;
- Former President Donald Trump’s acquittal on charges of inciting a deadly attack on the U.S. Capitol left Democrats and Republicans deeply divided on Sunday even as his Democratic successor, Joe Biden, sought to move on with his political and economic agenda;
- Myanmar’s ousted leader, Aung San Suu Kyi, has been remanded in custody until Wednesday, not Monday as previously thought, her lawyer told media, as protesters began gathering again to demand her release and an end to military rule;
- Coca-Cola Amatil said that Coca-Cola’s European bottler raised its takeover offer by around 6% to A$9.93 billion as global trading conditions improve;
- U.S. investment company Artisan Partners, which is putting pressure on France’s Danone to shake up its management amid criticism over weak returns, will meet several of its board members next week, a source close to the matter said on Sunday;
- German chemical company Lanxess is buying U.S.-based Emerald Kalama Chemical for an enterprise value of about $1.08 billion to strengthen its consumer business.
The summary as at 12.02.21
European stocks were set to open slightly lower on Friday, as investors awaited a fresh batch of economic data and monitored the gathering pace of vaccinations against Covid-19.
- Japan’s benchmark stock average Nikkei snapped a four-session rally, slipping from a more than 30-year high hit in the previous trading session, as investors booked profits but gains in Toyota Motor and chip shares capped the losses;
- Oil prices fell a second day, extending losses after OPEC cut its demand forecast and the International Energy Agency said the market was still over-supplied;
- U.S. President Joe Biden and his Chinese counterpart Xi Jinping held their first phone call as leaders and appeared at odds on most issues, even as Xi warned that confrontation would be a “disaster” for both nations;
- Supporters of ousted Myanmar leader Aung San Suu Kyi called for tougher international action against the new junta after Washington announced a first round of sanctions following six days of pro-democracy demonstrations;
- Members of Italy’s 5-Star Movement voted on Thursday to back Prime Minister designate Mario Draghi, opening the way for the former European Central Bank chief to take office at the head of a broad government of national unity;
- Amsterdam has displaced London as Europe’s biggest share trading centre after Britain left the European Union’s single market, and picked up a chunk of UK derivatives business along the way, according to data published on Thursday;
- New York-based municipal bond insurer MBIA’s unit MBIA Insurance Corp entered an agreement to settle a litigation it filed in 2009 against lender Credit Suisse and certain affiliated entities over property debt in the United States;
- AstraZeneca’s COVID-19 vaccine is not perfect, but will have a big impact on the pandemic, its chief executive predicted on Thursday, as the drugmaker pledged to double output by April and the African Union gave its backing for the shot;
- Shares of Disney jumped more than 2% in extended trading after the company reported strong growth in paid streaming subscribers and crushed expectations in its earnings report for its fiscal first quarter of 2021. Disney said it now has almost 95 million paid subscribers on its Disney+ streaming service;
- L’Oreal, the world’s biggest cosmetics group, posted on Thursday higher-than-expected revenue growth for the fourth quarter, helped by a strong performance in China and by booming online sales during the coronavirus crisis. The French owner of Maybelline said sales reached Eur7.88 billion in the October to December period, flat from a year earlier on a reported basis but up 4.8% when stripping out currency effects and acquisitions.
The summary as at 11.02.21
European stocks are expected to open flat on Thursday amid a pause in Wall Street rally and more muted trade in Asia Pacific due to the Lunar New Year public holiday.
- Investors in Europe will be keeping an eye on more earnings reports Thursday. Drugmaker AstraZeneca, banks Credit Agricole, Commerzbank and Unicredit and cosmetics company L’Oreal are among the biggest names to report earning, as well as Arcelormittal, Schneider Electric and Zurich Insurance;
- AstraZeneca has reported a 10% rise in product sales for 2020, a year in which the drugmaker has featured prominently for its work developing a coronavirus vaccine, alongside the University of Oxford. The Anglo-Swedish pharmaceutical giant reported product sales totaling $25.8 billion for 2020. For the fourth quarter, sales rose 12% to just over $7 billion — the first time for “many years” the company has topped this figure. Total revenue came in at $26.6 billion for the year, and $7.4 billion for the fourth quarter;
- French electrical equipment group Schneider Electric said on Thursday it expects its revenues and core profit margin to grow this year, after a second-half rebound helped it beat market expectations for 2020. The Paris-based conglomerate, which sells products ranging from electrical car chargers to industrial robotics, said it would now focus on integrating its recent acquisitions and creating synergies. For 2021, Schneider forecast a continued recovery in Western Europe and strong growth in its other regions supported by robust demand for data centers;
- Investors will be digesting comments from U.S. Federal Reserve Chairman Jerome Powell on Wednesday. He said that policy will need to stay “patiently accommodative” and that the U.S. is “a long way” from where it needs to be in terms of employment despite the economy having reclaimed more than 12 million jobs since the early days of the Covid pandemic;
- Trading in Asia-Pacific was quieter overnight as multiple major markets in the region, including China, Japan, South Korea and Taiwan were closed for holidays. Markets in Hong Kong and Singapore also ended their trading sessions earlier than usual on Lunar New Year eve.
The summary as at 09.02.21
- Asian stock markets rose after a record-setting day on Wall Street, while Bitcoin paused for breath after an overnight endorsement from Tesla sent the cryptocurrency up.
- Oil prices edged up to their highest in 13 months as supply cuts by major producers and optimism over fuel demand recovery support energy markets.
- Bitcoin took another large stride toward mainstream acceptance on Monday after billionaire Elon Musk’s electric vehicle company Tesla revealed it had bought $1.5 billion of the cryptocurrency and would soon accept it as a form of payment for cars, sending the cryptocurrency shooting higher.
- Spending by British consumers plunged in January at the fastest rate in seven months as the country went back into a tight COVID-19 lockdown, payment card firm Barclaycard said.
- Japan’s currency in circulation and bank deposits rose at a record pace in January, data showed, a sign companies and households continued to hoard cash due to uncertainty over the coronavirus pandemic.
- Bain Capital and Cinven are acquiring Lonza’s Specialty Ingredients division in a deal worth $4.7 billion, the Swiss contract drug maker said, as it focuses on its faster-growing unit that supplies drug and biotech companies.
- German chauffeur service Blacklane has acquired a majority stake in Jaguar Land Rover-backed Havn, a premium all-electric cab service in London, for an undisclosed sum to speed up the electrification of its private hire fleet.
- Health officials around the world gave their backing to the AstraZeneca vaccine against COVID-19, after a study showing it had little effect against mild disease caused by the variant now spreading quickly in South Africa rang global alarm.
The summary as at 05.02.21
- Global shares closed in on their record peak, with Asian shares taking their lead from Wall Street, as progress in vaccine distribution prompted bets on further normalisation in the global economy and earnings recovery;
- Oil prices climbed to their highest levels in a year, extending a run of strong gains on signs of economic growth in the United States and a continued commitment by producers to hold back crude supply;
- Shares of GameStop and others favored recently by retail investors fell further on Thursday, while U.S. Treasury Secretary Janet Yellen said she needed to “understand deeply” the trading frenzy that has gripped Wall Street;
- Japan’s household spending fell for the first time in three months in December, in a sign consumer sentiment was weakening even before the government called a state of emergency to control a new wave of the coronavirus in the country;
- U.S. President Joe Biden promised a new era after the scattershot foreign policy of his predecessor, Donald Trump, declaring “America is back” on the global stage in his first diplomatic address as president;
- Production cuts by automakers Ford and Stellantis due to the global semiconductor chip shortage and warnings from suppliers Robert Bosch and German chip maker Infineon on Thursday have raised concerns the problem will only get worse this year for the industry;
- A bid by Britain’s Liberty Steel for the steel division of Germany’s Thyssenkrupp still lacks clarity on financing, a leader for the powerful IG Metall union said;
- German airline Lufthansa said it had issued a 1.6 billion euro bond on Thursday, money that will be used to repay part of a bailout given last year by state lender KfW to help it cope with the COVID-19 crisis;
- Despite eurozone banks having restrictions on dividends given the severe economic crisis in the region, BNP Paribas will pay out a dividend of 1.11 euros per share in May in cash. BNP’s CFO said he bank is nonetheless following the ECB’s recommendation by announcing a dividend within certain parameters advised by the central bank;
- Sanofi SA on Friday posted a swing to profit for the fourth quarter of 2020 but said that sales declined on year. The French pharmaceutical company said that net profit came in at 1.08 billion euros ($1.29 billion) for the period, up from a loss of EUR10 million in the same period last year;
- Markets’ attention today will be on the US jobs report for January. Expectations are for +200k increase in nonfarm payrolls after the –140k decrease in jobs back in December.
The summary as at 04.02.21
- Overnight in Asia, the recent equity rally has unwound a little. Futures on the S&P 500 are slightly down while the US dollar index is marginally up;
- Oil prices rose to their highest level since the pandemic started on the back of a communique from the OPEC+ which said that it will keep pushing to quickly clear the oil surplus left behind by the pandemic;
- Italian assets surged after former ECB President Mario Draghi accepted a mandate from President Mattarella to from the next Italian government, an outcome that investors have taken extremely well;
- President Biden told House Democrats that he was more concerned that too little would be spent rather than too much when it came to economic relief;
- Data yesterday showed that inflation in the Euro Area in January rose by more than expected, with the flash estimate showing prices were up +0.9% on the previous year (vs +0.6% expected), bringing to an end 5 successive months in which the Euro Area had been in deflationary territory;
- Over in the US, the ISM services index for January rose to a stronger-than-expected 58.7 (vs. 56.7 expected), which is its strongest level since February 2019;
- Separately, ahead of tomorrow’s jobs report, the ADP’s report of private payrolls also rose by a much stronger-than-expected +174k in January (vs. +70k expected);
- Deutsche Bank swung to a small profit in 2020, its first since 2014, on the back of strong gains at its investment banking division;
- Daimler AG said it will split its Mercedes-Benz car division and its Daimler Trucks division into two separate companies, aiming to spin off the trucks business to shareholders – a move that highlights how conventional auto makers are under pressure to boost their stock-market value.
The summary as at 03.02.21
European stocks are expected to open steady to slightly weaker as a spike in short-term Chinese interest rates fanned worries about policy tightening in the world’s second-largest economy, although improving corporate earnings and easing market volatility helped balance the mood.
- Overnight in Asia, the recent equity rally has unwound a little. Futures on the S&P 500 are slightly down while the US dollar index is marginally up;
- Oil prices rose to their highest level since the pandemic started on the back of a communique from the OPEC+ which said that it will keep pushing to quickly clear the oil surplus left behind by the pandemic;
- Italian assets surged after former ECB President Mario Draghi accepted a mandate from President Mattarella to from the next Italian government, an outcome that investors have taken extremely well;
- President Biden told House Democrats that he was more concerned that too little would be spent rather than too much when it came to economic relief;
- Data yesterday showed that inflation in the Euro Area in January rose by more than expected, with the flash estimate showing prices were up +0.9% on the previous year (vs +0.6% expected), bringing to an end 5 successive months in which the Euro Area had been in deflationary territory;
- Over in the US, the ISM services index for January rose to a stronger-than-expected 58.7 (vs. 56.7 expected), which is its strongest level since February 2019;
- Separately, ahead of tomorrow’s jobs report, the ADP’s report of private payrolls also rose by a much stronger-than-expected +174k in January (vs. +70k expected);
- Deutsche Bank swung to a small profit in 2020, its first since 2014, on the back of strong gains at its investment banking division;
- Daimler AG said it will split its Mercedes-Benz car division and its Daimler Trucks division into two separate companies, aiming to spin off the trucks business to shareholders – a move that highlights how conventional auto makers are under pressure to boost their stock-market value.
The summary as at 02.02.21
European markets look set to start the trading week on a positive note, like their global counterparts, despite a week of turbulent trading last week after retail investors prompted what Goldman Sachs has called the biggest short squeeze in 25 years. Overnight Sunday, U.S. stock index futures turned positive in volatile trading following last week’s heavy losses — the worst for the market since October.
- Asian shares rallied and U.S. stock futures recouped early losses as newly empowered retail investors turned their attention to precious metals, promising a respite to some hard-hit hedge funds;
- Oil prices edged higher after a weak start, holding on to the past three months of gains, although patchy coronavirus vaccine rollouts, new infections and the discovery of new variants are keeping a lid on prices;
- Myanmar’s military seized power in a coup against the democratically elected government of Nobel laureate Aung San Suu Kyi, who was detained along with other leaders of her National League for Democracy party in early morning raids;
- Manufacturing in China and Japan suffered in January, while South Korea and Taiwan saw improvement amid a resurgence in coronavirus infections, underscoring the fragile nature of the region’s economic recovery;
- Wall Street is gearing up for another week of market mayhem, with signs that the retail frenzy that pumped up the stock prices of the likes of GameStop and AMC is spreading to other assets;
- AstraZeneca will deliver nine million more doses of its COVID-19 vaccine to the European Union in the first quarter of this year, making a total of 40 million for the period, and will start deliveries one week earlier than expected, the president of the European Commission said on Sunday;
- British online fashion retailer ASOS is on the verge of a deal to buy Topshop and Miss Selfridge from the administrators of British tycoon Philip Green’s Arcadia Group for almost 300 million pounds, Sky News reported;
- Emmanuel Faber, the chief executive and chairman of French food group Danone, told the weekly Journal du Dimanche that he did not hold a “dogmatic” view as to whether the role should be split in two.
The summary as at 29.01.21
- An army of retail investors that has routed Wall Street’s professionals in recent days was dealt a blow on Thursday, after online brokerages restricted purchases of red-hot GameStop and other stocks that had soared this week;
- Europe’s fight to secure COVID-19 vaccine supplies intensified on Thursday when the European Union warned drug companies such as AstraZeneca that it would use all legal means or even block exports unless they agreed to deliver shots as promised;
- Germany’s vaccine commission recommended that the AstraZeneca vaccine was only used for those aged 18-64, and not in the 65+ group, marking a contrast from the UK where it was approved for use in all adults;
- US GDP in Q4 grew at an annualised rate of +4.0% (vs. +4.2% expected), meaning that GDP for the full year in 2020 contracted by –3.5%. That marks the worst annual performance for the US economy since 1946, and is biggest than the –2.5% contraction in 2009;
- Weekly jobless claims from the US, fell to 847k (vs. 875k expected) in the week through January 23;
- Japan’s industrial output extended declines in December as factories struggled with a hit to demand from expanded COVID-19 lockdown measures globally, suggesting the economic recovery was slowing;
- Britain is banning direct passenger flights to and from the United Arab Emirates from Friday, shutting down the world’s busiest international airline route from Dubai to London;
- Shares of Qualtrics International jumped on Thursday in their Nasdaq debut, valuing the firm at nearly $21 billion, against the backdrop of a capital market frenzy that has seen investors flock to technology stocks;
- Daimler said on Thursday a strong fourth quarter helped it post better-than-expected 2020 group operating profit and that it was optimistic for 2021;
- SAP SE said Friday that net profit for the fourth quarter of 2020 fell year-on-year, while it confirmed declines in operating profit and revenue as pre-announced earlier this month. Reporting on a non-IFRS basis, the German software company said fourth-quarter net profit slipped to 2 billion euros ($2.42 billion) from EUR2.17 billion for the fourth quarter of 2019.
The summary as at 28.01.21
European stocks opened lower Thursday as global markets react to a sharp sell-off on Wall Street Wednesday.
- Asian shares slid while the safe-haven dollar rallied as a sudden sell-off on Wall Street and delays with coronavirus vaccines served as an excuse to book profits on recent hefty gains;
- Oil prices slid on fresh worries about weakened fuel demand, after England clamped down on travel and China, the world’s second-largest oil consumer, also sought to limit Lunar New Year trips to stem a surge in COVID-19 cases;
- The Federal Reserve left its key overnight interest rate near zero and made no change to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession;
- Prime Minister Boris Johnson indicated the COVID-19 lockdown in England would last until March 8 when schools could start to reopen as the government announced new measures to clamp down on travel to and from Britain;
- The European Union failed to make a breakthrough in crisis talks with AstraZeneca and demanded the drugmaker spell out how it would supply the bloc with reserved doses of COVID-19 vaccine from plants in Europe and Britain;
- Fiat Chrysler said it will plead guilty to charges it conspired with company executives to make illegal, lavish gifts to United Auto Workers leaders and undermined workers’ confidence in collective bargaining;
- Rio Tinto named a new head of its iron ore division as part of a leadership reshuffle as it works to rebuild partnerships with Indigenous groups after the global miner destroyed ancient, sacred caves in Australia;
- Tesla reported record deliveries in the fourth quarter, boosted by increased demand for electric vehicles. But its shares fell in after-hours trading after profit fell short of analyst expectations. While many car firms were hit hard in 2020 by the coronavirus pandemic, Tesla bucked the trend.
- Apple finished 2020 with its most profitable quarter ever as sales of its high end iPhones, tablets and laptops soared amid the pandemic. The company announced that sales for the three months ending on 26 December 2020 totalled $111.4bn and it had made a profit of $28.7bn, 29% higher than the same period last year. The holiday period is a crucial time for Apple, accounting for 30% of its sales, and 2020’s bumper quarter was boosted by strong sales of its latest iPhone. The blowout results, stronger than Wall Street had expected, were fueled in large part by sales of the company’s latest iPhones. iPhone revenues were $65.6bn for the quarter, up 17% year-over-year.
The summary as at 27.01.21
European stocks are expected to open flat to lower on Wednesday, echoing an uncertain trend seen in other global markets overnight.
- Asian equities slipped as investors looked to the Federal Reserve’s guidance on its monetary policy while futures for U.S. tech shares jumped after strong earnings from Microsoft;
- Oil prices climbed after industry data showed U.S. crude stockpiles fell unexpectedly last week and China, the world’s second-biggest oil user, reported its lowest daily rise in COVID-19 cases, bolstering hopes of a pick-up in demand;
- The International Monetary Fund on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn last year – the biggest peacetime contraction since the Great Depression – would be nearly a full percentage point less severe than expected;
- Global coronavirus cases surpassed 100 million, according to a Reuters tally, as countries around the world struggle with new virus variants and vaccine shortfalls;
- Europe urged pharmaceutical companies on Tuesday to honour their commitments to supply coronavirus vaccines, as delivery cuts and delays dim hopes of a quick fix to COVID-19 and increase talk of protectionism and hoarding;
- UniCredit is set to name Andrea Orcel as chief executive, a person familiar with the matter said on Tuesday, putting one of Europe’s best-known dealmakers at the helm just as the coronavirus crisis is pushing banks to merge;
- AstraZeneca has offered to bring forward some deliveries of its COVID-19 vaccine to the European Union while the bloc has asked the British drugmaker if it can divert doses from the UK to make up for a shortfall in supplies, European officials told Reuters;
- Booming sales at LVMH’s fashion brands like Louis Vuitton, particularly in China, helped to cushion the impact of the coronavirus pandemic, which has crimped revenues at the French luxury group;
- Microsoft Corp on Tuesday reported its Azure cloud computing services grew 50%, the second quarter of acceleration in a business that had begun to slow as the global pandemic benefited the software maker’s investment on working and learning from home;
- Coming into General Electric’s fourth-quarter earnings report, investors were focused on free cash flow. GE delivered a number that was much better than expected, helping shares to surge 11% higher at the open yesterday;
- Johnson & Johnson said it expects to report pivotal results of a large clinical trial of its Covid-19 vaccine by early next week, and to deliver 100 million doses for use in the U.S. by the end of June if the data are positive and the vaccine is authorized;
- Verizon has big 5G plans for 2021 after formally launching its next-gen network in October of last year, and close to the top of its list of priorities is expanding coverage of its ultra-fast mmWave coverage. That flavor of 5G is currently restricted to select areas within select cities in the US, and it’s highly dependent on your proximity to a Verizon 5G site due to the inherent technology that powers it;
- Today is another important day for earnings with Apple, Tesla, Facebook and Boeing amongst the heavyweights reporting results today.
The summary as at 26.01.21
European stocks are expected to open in mixed territory on Tuesday, with investors focusing on an emerging battle between vaccine maker AstraZeneca and the EU, and on political uncertainty in Italy.
- Asian stocks dipped, retreating from record highs as lingering concerns about potential roadblocks to the Biden administration’s $1.9 trillion stimulus weighed on sentiment, dragging U.S. Treasury yields to three-weeks lows;
- Oil prices fell as fading hopes for a rapid approval of new U.S. economic stimulus and mounting new coronavirus cases raised questions over the pace of any recovery in demand;
- U.S. Senate Majority Leader Chuck Schumer said on Monday that Democrats may try to pass much of President Joe Biden’s coronavirus relief bill using a process that would bypass a Republican filibuster and could pass with a majority vote;
- Leon Black said on Monday he would step down as chief executive at Apollo Global Management, following an independent review of his ties to the late financier and convicted sex offender Jeffrey Epstein;
- British Prime Minister Boris Johnson said on Monday he was looking at toughening border quarantine rules because of the risk of “vaccine-busting” new coronavirus variants;
Survey-software seller Qualtrics International, owned by business software group SAP, is aiming for a valuation of roughly $15 billion in its U.S. initial public offering, as it tees up for a blockbuster market debut;
- AstraZeneca denied on Monday its COVID-19 vaccine is not very effective for people over 65, after German media reports said officials fear the vaccine may not be approved in the European Union for use in the elderly;
- UBS delivered a significant 4Q20 pre-tax profit beat driven by better revenues in Asset Management, Investment Bank and Group Functions and better credit losses;
- Swiss luxury watchmakers Hublot and Zenith, both part of French group LVMH, expect sales to rebound in 2021, after a difficult 2020 and a challenging start to the new year, their chief executives said on Monday.
The summary as at 25.01.21
European stocks are expected to open higher on Monday as investors around the world keep across developments on the coronavirus pandemic, and plans for U.S. stimulus measures.
- Asian shares rose as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by expectations of a $1.9 trillion fiscal stimulus plan to help revive the U.S. economy;
- Oil prices slipped for a second straight session as renewed COVID-19 lockdowns raised fresh concerns about global fuel demand;
- Officials in President Joe Biden’s administration tried to head off Republican concerns that his $1.9 trillion pandemic relief proposal was too expensive on a Sunday call with Republican and Democratic lawmakers, some of whom pushed for a smaller plan targeting vaccine distribution;
- Australia approved the Pfizer-BioNTech COVID-19 vaccine for use but warned AstraZeneca’s international production problems mean the country would need to distribute a locally manufactured shot earlier than planned;
- China was the largest recipient of foreign direct investment in 2020 as the coronavirus outbreak spread across the world during the course of the year, with the Chinese economy having brought in $163 billion in inflows;
- Deutsche Bank said on Sunday it began a probe in relation to engagement with some clients after the Financial Times reported earlier that the German lender was investigating the alleged mis-selling of investment banking products;
- German car manufacturer Volkswagen is in talks with its main suppliers about possible claims for damages due to a shortage of semiconductors, a company spokesman said on Sunday;
- Siemens Energy, which makes turbines for the power sector, on Sunday said it swung to a core profit in its fiscal first quarter, helped by cost cuts and unspecified temporary effects.
The summary as at 21.01.21
European stocks opened higher Thursday amid optimism as President Joe Biden takes office.
- Asian stocks rose to new record highs, tracking U.S. markets as investors hoped for more economic stimulus from newly inaugurated U.S. President Joe Biden to offset damage wreaked by the COVID-19 pandemic;
- Oil prices fell after data showed U.S. crude stocks unexpectedly rose last week, reigniting worries about pandemic restrictions cutting into fuel demand;
- Joe Biden was sworn in as president of the United States on Wednesday, offering a message of unity and restoration to a deeply divided country reeling from a battered economy and a raging coronavirus pandemic that has killed more than 400,000 Americans;
- European Union leaders will seek to address the coronavirus pandemic’s mounting challenges, from containing more infectious variants to the threat of border closures and the slow roll-out of vaccines across the bloc;
- The Bank of Japan kept monetary policy steady and revised up its economic forecast for next fiscal year, signaling that it has delivered sufficient stimulus for now to cushion the blow from the COVID-19 pandemic;
- Larger trials are needed to assess whether Roche’s arthritis drug tocilizumab can cut death rates among the sickest COVID-19 patients, scientists said on Wednesday, after a small study found it was no better than standard care in severe cases;
- Italy’s biggest phone group, Telecom Italia, on Wednesday started work on a plan that could keep Chief Executive Luigi Gubitosi in his role when it names a new board this year, two sources familiar with the matter said;
- State-owned Italian bank Monte dei Paschi di Siena has seen no potential bidders come forward yet to scrutinise confidential data after opening its books to suitors on Monday, two sources familiar with the matter said.
The summary as at 20.01.21
European stocks are expected to open higher Wednesday, ahead of the inauguration of President-elect Joe Biden.
- Japanese shares trimmed early gains on profit-booking as U.S. Treasury Secretary nominee Janet Yellen’s call for big spending was perceived by investors as no surprise;
- Oil prices rose in early trade, adding to solid gains overnight, on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks;
- Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden;
- Sentiment in Europe was buoyed yesterday by the Italian government’s survival, with the Senate voting 154-140 in the government’s favour – there were 27 absences or abstentions. This means that Prime Minister Conte will be allowed to try and conolidate power.
- Pfizer told Canada on Tuesday it will receive no coronavirus vaccines next week, officials said, an unexpected development that promises more pain for provinces already complaining about a shortage of supplies;
- Bank of England chief economist Andy Haldane said on Tuesday that he expected Britain’s economy to begin to recover “at a rate of knots” from the second quarter of this year, as vaccines against COVID-19 are rolled out;
- London Stock Exchange said on Tuesday that it should complete its $27 billion acquisition of Refinitiv on Jan. 29, as it bulks up into a major financial data provider to compete with Bloomberg;
- Stellantis, the carmaker forged from the merger of Fiat Chrysler and Peugeot-owner PSA, will give all its 14 brands a chance at success and keep all options on the table for revitalising its struggling Chinese business, it top executive said on Tuesday;
- BHP forecast record iron ore production for fiscal 2021, as the world’s biggest listed miner looks to cash in on high prices for the commodity following restart of its Brazilian operations;
- ASML’s fourth quarter sales came in at €4.3 billion, which is above guidance. This was mainly due to additional DUV shipments and upgrade opportunities. They shipped nine EUV systems and recognized revenue for eight systems in the fourth quarter. Fourth quarter net bookings came in at €4.2 billion, including €1.1 billion from EUV systems (net six units);
- Alibaba Group founder Jack Ma made his first appearance since October on Wednesday when he spoke to a group of teachers by video, easing concern about his unusual absence from public life and sending shares in the e-commerce giant surging;
- Netflix shares jumped 12.2% after the bell yesterday as the streaming pioneer reported strong growth in subscribers and projected it will no longer need to raise debt;
- Earnings and trading releases come from Richemont, Burberry, WH Smith, JD Wetherspoon and Pearson; on the data front, Netherlands consumer confidence data for January and final consumer prices data for December from the euro zone is due.
The summary as at 19.01.21
European stocks are expected to open higher on Tuesday, buoyed by hopes that an economic recovery following the coronavirus pandemic is not far off.
- Asian shares climbed as investors wagered China’s economic strength would help underpin growth in the region, even as pandemic lockdowns threatened to lengthen the road to recovery in the West;
- Brent crude futures edged up as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally could cool fuel consumption;
- Wall Street may be facing an uncomfortable four years after President-elect Joe Biden’s team confirmed on Monday it planned to nominate two consumer champions to lead top financial agencies, signaling a tougher stance on the industry than many had anticipated;
- U.S. President-elect Joe Biden plans to quickly extend travel restrictions barring travel by most people who have recently been in much of Europe and Brazil soon after President Donald Trump lifted those requirements effective Jan. 26, a spokeswoman for Biden said;
- More than 20 shellfish trucks parked on roads near the British parliament and Prime Minister Boris Johnson’s Downing Street residence on Monday to protest against post-Brexit bureaucracy that has throttled exports to the European Union;
- Alimentation Couche-Tard would revive its $20 billion bid for France’s Carrefour if the Canadian convenience store operator saw a change in the French government’s stance on the proposed deal, its chief executive said on Monday;
- Logitech International raised its annual forecasts and reported a nearly three-fold jump in quarterly adjusted operating income, benefiting from a pandemic-driven boost in demand for work-from-home products and gaming accessories;
- UniCredit is narrowing down a field of candidates to replace departing Chief Executive Jean Pierre Mustier, three people familiar with the matter said, as Italy’s second biggest bank tries to find a new boss by early February.
The summary as at 18.01.21
European stocks are expected to start the new trading week flat to lower on Monday, amid a pullback in global markets.
- Japanese stock prices slid as investors took profits from recent gainers such as semiconductor-related shares following the market’s rapid ascent to a three-decade high earlier this month;
- Oil prices fell, extending losses that last week ended a rally driven by production cuts and strong Chinese demand, with the market’s recovery outlook being called into question as coronavirus infections rise;
- China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-stricken 2020 in remarkably good shape and remained poised to expand further this year even as the global pandemic raged unabated;
- Prime Minister Giuseppe Conte faces two days of parliamentary votes that will decide if his fragile coalition can cling to power or has lost its majority, pushing Italy into deeper political turmoil;
- U.S. President-elect Joe Biden is planning to cancel the permit for the $9 billion Keystone XL pipeline project as one of his first acts in office, and perhaps as soon as his first day, according to a source familiar with his thinking;
- Canada’s Alimentation Couche-Tard and European retailer Carrefour have decided to work on partnership opportunities after takeover talks failed, the two companies said in a joint statement on Saturday;
- Fiat Chrysler and PSA sealed their long-awaited merger on Saturday to create Stellantis, the world’s fourth-largest auto group with deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen;
- British telecoms operator BT is facing a claim for almost 600 million pounds lodged by a consumer campaign group, which says the company failed to compensate fixed-line customers, many of them elderly, for overcharging.
The summary as at 15.01.21
European markets are set to open in negative territory on Friday as a re-emergence of Covid-19 cases in China pulled back the positive sentiment generated by U.S. President-elect Joe Biden’s $1.9 trillion stimulus plan.
- China shares fell as consumer and liquor stocks retreated on worries over lofty valuations, while Sino-U.S. tensions also weighed on market sentiment; and Japan’s benchmark Nikkei stock average inched lower, although losses were capped by tech-related shares after Taiwanese chipmaker TSMC posted its best-ever quarterly profit;
- Oil prices were lower, pressured by renewed worries about global oil demand due to surging coronavirus;
- President-elect Joe Biden outlined a $1.9 trillion stimulus package proposal on Thursday, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control;
- America will be in uncharted territory when the U.S. Senate meets as soon as next week for the second impeachment trial of Donald Trump, a case against the outgoing president that one Democrat preparing for arguments called “shockingly evident.”;
- Swiss trading house Gunvor will resume trading in large volumes of Russian oil products this year after winning a big tender from Russia’s largest oil firm Rosneft for the first time in eight years, five industry sources told Reuters;
- France on Thursday took a tough line against any takeover of retailer Carrefour by a foreign company, dealing a major blow to a near $20 billion bid approach by Canada’s Alimentation Couche-Tard;
- General Electric accused a Siemens Energy subsidiary of using stolen trade secrets to rig bids for lucrative contracts supplying gas turbines to public utilities, and cover up improper business gains totalling more than $1 billion, according to a lawsuit filed on Thursday;
- Business software group SAP forecast flat revenue and a decline in operating profit in 2021, as it released preliminary annual results that came at the high end of guidance slashed last autumn.
The summary as at 13.01.21
European stocks are expected to open higher Wednesday as hopes are boosted that the rollout of coronavirus vaccines worldwide will soon start to bring an end to the pandemic.
- Asian stocks rose, tracking modest Wall Street gains, as expectations that a vaccine will eventually win the battle against the coronavirus fuelled recovery hopes, while tight supply expectations pushed oil prices to a one-year high;
- Oil prices gained more than 1%, with U.S. crude rising for a seventh day, after industry data showed a bigger than expected drop in inventories and investors shrugged off worsening developments in the pandemic;
- With at least five Republicans joining their push to impeach President Donald Trump over the storming of the U.S. Capitol, Democrats in the House of Representatives stood poised for a history-making vote to try to remove the president from office;
- Europe’s drugs regulator will review the COVID-19 vaccine developed by AstraZeneca and Oxford University this month under an accelerated timeline, the watchdog said on Tuesday;
- OPEC+ compliance with pledged oil output curbs fell to 75% in December, among the lowest levels since the supply pact started in May 2020, tanker tracker Petro-Logistics said on Tuesday;
- The U.S. State Department this month told European companies which it suspects are helping to build Russia’s Nord Stream 2 gas pipeline that they face the risk of sanctions as the outgoing Trump administration prepares a final round of punitive measures against the project, two sources said on Tuesday;
- French carmaker Renault and U.S. hydrogen specialist Plug Power have joined forces to develop hydrogen-powered light commercial vehicles (LCV), they said on Tuesday;
- Tesco, Asda, Aldi and Waitrose will not let shoppers into their stores if they are not wearing a face covering, the British supermarket groups said on Tuesday, joining rivals Sainsbury’s and Morrisons which made the policy change a day earlier.
The summary as at 12.01.21
European stocks crept higher on Tuesday morning as investors remain focused on the latest coronavirus developments and the state of U.S. politics.
- Stocks took a breather, easing from record highs as political turmoil in Washington and rising coronavirus cases gave pause, though a selloff in U.S. Treasuries extended as investors reckon on a big spending government;
- Oil prices slipped as investors remained concerned about climbing coronavirus cases globally, though an anticipated drawdown in crude oil inventory in the United States for a fifth straight week stemmed losses;
- Democrats in the U.S. House of Representatives plan to impeach Donald Trump on Wednesday unless he steps down or is removed before then, after drawing up charges accusing him of inciting insurrection ahead of last week’s siege of the Capitol;
- The U.S. government on Monday said it would begin collecting new duties on aircraft parts and other products from France and Germany from Tuesday after failing to resolve a 16-year dispute over aircraft subsidies with the European Union;
- Prime Minister Boris Johnson said on Monday Britain was in “a race against time” to roll out COVID-19 vaccines as deaths hit record highs and hospitals ran out of oxygen, and his top medical adviser said the pandemic’s worst weeks were imminent;
- The European Union is in talks with Moderna to order more of its COVID-19 vaccine despite the company seeking a higher price, and is also trying to close COVID-19 vaccine deals with Valneva and Novavax, according to two EU officials and an internal document;
- British retailers called on the police to help enforce the wearing of masks to limit the spread of COVID-19, with two of the biggest supermarkets saying on Monday they would challenge people who were flouting the rules;
- British retailer Marks & Spencer has purchased the Jaeger brand from its administrators as part of a strategy to bolster its clothing division with new names, it said on Monday.
The summary as at 11.01.21
European stocks opened in mixed territory on Monday, following the trend set in their Asian counterparts overnight.
- Asian shares paused near historic highs while Treasury yields were at a 10-month top as “trillions” in new U.S. fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade;
- Oil prices fell on renewed concerns about global fuel demand amid strict coronavirus lockdowns in Europe and new movement restrictions in China, the world’s second-largest oil user, after a jump in cases there;
- U.S. House of Representatives Democrats plan a vote to urge Vice President Mike Pence to take steps to remove President Donald Trump from office after his supporters’ deadly storming of the Capitol, before attempting to impeach him again;
- British minister Rishi Sunak expressed concern that higher interest rates might one day jack up the cost of servicing government debt, in comments published on Sunday;
- Britain will open seven large-scale vaccination centres, helping to accelerate the rollout of COVID-19 shots that the government wants to deliver to all vulnerable people by mid-February;
- Major HSBC shareholders are calling on Europe’s biggest bank to toughen its commitment to cut lending linked to fossil fuels and to turn its climate “ambitions” into targets;
- Royal Mail will name board member Simon Thompson as its next chief executive in the coming days, Sky News reported on Sunday, citing sources;
- Malaysia signed a deal to buy an additional 12.2 million doses of a COVID-19 vaccine manufactured by U.S. and German drugmakers Pfizer and BioNTech, the health ministry said in a statement.
The summary as at 08.01.21
European markets are set to open higher Friday as global investors anticipate that a Democratic-controlled U.S. government will lead to greater fiscal support.
- Asian shares rose to record highs, with Japan’s Nikkei hitting a three-decade peak as investors looked beyond rising coronavirus cases and political unrest in the United States to focus on hopes for an economic recovery later in the year;
- Oil prices edged higher, hovering near 11-month highs hit the previous day, as Saudi Arabia’s pledge to make voluntary cuts to its output continued to buoy the mood in the market though worries over slower fuel demand capped gains;
- President Donald Trump faced the threat on Thursday of a second impeachment, a day after his supporters breached the U.S. Capitol in a stunning assault on American democracy as Congress was certifying President-elect Joe Biden’s victory;
- The United States on Thursday said it would hold off slapping tariffs on French cosmetics, handbags and other imports in retaliation for a digital services tax Washington says will harm U.S. tech firms, while it investigates similar taxes elsewhere;
- Shares of Tesla surged to a record high in heavy trading on Thursday, with the electric car maker’s stock market value exceeding Facebook’s for the first time;
- Pfizer and BioNTech’s COVID-19 vaccine appeared to work against a key mutation in the highly transmissible new variants of the coronavirus discovered in the UK and South Africa, according to a laboratory study conducted by the U.S. drugmaker;
- LVMH installed the son of company founder Bernard Arnault in a new leadership team at Tiffany on Thursday after the French luxury goods group concluded its $15.8 billion acquisition of the U.S. jeweller;
- France’s Atos confirmed on Thursday it has made a bid approach for U.S. rival DXC Technology in what would be the deal-hungry IT consulting group’s biggest ever acquisition.
The summary as at 07.01.21
European stocks are expected to open higher on Thursday following a projected win for Democrats in the U.S. Senate and the dramatic scenes seen yesterday when pro-Trump rioters stormed the U.S. Capitol building.
- Bonds nursed losses and Asian stock markets rose in anticipation of a big borrowing and big spending Democrat administration driving growth, following runoff elections that gave the party control of both houses of U.S. Congress;
- Oil prices were steady after supporters of President Donald Trump stormed the U.S. Capitol, with investors focusing on the likelihood of tighter supplies after Saudi Arabia unilaterally agreed to cut output;
- Hundreds of President Donald Trump’s supporters stormed the U.S. Capitol on Wednesday in a stunning bid to overturn his election defeat, occupying the symbol of American democracy and forcing Congress to suspend a session to certify President-elect Joe Biden’s victory;
- Democrats on Wednesday completed a sweep of the two U.S. Senate seats up for grabs in runoff elections in Georgia, giving the party control of the chamber and boosting the prospects for President-elect Joe Biden’s legislative agenda;
- British Prime Minister Boris Johnson won parliament’s backing for England’s latest lockdown on Wednesday after telling lawmakers that schools would be the first to reopen when he can start a “gradual unwrapping” of the strict measures;
- Some doctors’ practices in England will be able to offer the COVID-19 vaccine developed by AstraZeneca and Oxford University, the National Health Service said, targeting the vaccination of the most vulnerable within six weeks;
- Italy is working on a plan to take on about 14 billion euros of UniCredit’s impaired loans to make a takeover of state-owned Monte dei Paschi more attractive for the country’s second-biggest bank, sources told Reuters;
- The European drugs regulator could soon give the go ahead for an extra sixth dose to be extracted from Pfizer-BioNTech COVID-19 vaccine vials, an EU official told Reuters on Wednesday, lifting the number of available shots at a time when supplies are short.
The summary as at 06.01.21
European stocks were modestly higher on Wednesday morning as the coronavirus pandemic and U.S. political developments remain a key focus for investors.
- Global stock prices slipped and U.S. bond yields rose as investors braced for the prospect that Democrats could win both races in a U.S. Senate run-off election in Georgia, handing them control of the crucial chamber;
- Brent oil prices rose to the highest since February after Saudi Arabia agreed to make bigger cuts in output than expected during a meeting with allied producers, while industry data showed U.S. crude stockpiles fell last week;
- Democrats and Republicans were locked in tight U.S. Senate races in Georgia on Tuesday as final votes were counted in a showdown that will decide whether President-elect Joe Biden enjoys control of Congress or faces stiff Republican opposition to his reform plans;
- Rev. Raphael Warnock is projected to win the Georgia U.S. Senate special election runoff, flipping a Republican seat and bringing Democrats one step closer to unified control of Congress and the White House;
- Britain began its third COVID-19 lockdown on Tuesday with the government calling for one last major national effort to defeat the spread of a virus that has infected an estimated one in 50 citizens before mass vaccinations turn the tide;
- Saudi Arabia pledged additional, voluntary oil output cuts of one million barrels per day in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns;
- People should get two doses of the Pfizer and BioNTech vaccine within 21-28 days, the World Health Organization said on Tuesday, as many countries struggled to administer the jabs that can ward off the COVID-19 virus;
- Italian fashion group Prada said on Tuesday that it would close 2020 with an operating profit after a strong recovery from a first half coronavirus-driven sales slump;
- Volkswagen’s luxury British automaker Bentley posted record sales of 11,206 cars in 2020 despite the COVID-19 pandemic causing the company’s factory to close during the first lockdown in England, as demand in China soared by nearly 50%.
The summary as at 05.01.21
European stocks are expected to open lower on Tuesday as the coronavirus pandemic and the imposition of further restrictions weigh on investor sentiment.
- Most Asian shares fell amid uncertainty about Senate runoffs in Georgia, which could have a big impact on incoming U.S. President Joe Biden’s economic policies;
- OPEC+ will resume talks after reaching a deadlock over February oil output levels as Saudi Arabia argued against pumping more due to new lockdowns while Russia led calls for higher production citing recovering demand;
- British Prime Minister Boris Johnson on Monday ordered England into a new national lockdown to contain a surge in COVID-19 cases that threatens to overwhelm parts of the health system before a vaccine programme reaches a critical mass;
- Georgia’s top election official said on Monday that President Donald Trump, a fellow Republican, had pushed him to take an “inappropriate” call in which he pressured the state to overturn his November presidential election defeat there;
- Fiat Chrysler and PSA said on Monday that investors had given their blessing to a $52 billion merger to create the world’s fourth largest automaker, and shares in the new company, named Stellantis, would start trading in two weeks;
- Ladbrokes owner Entain said on Monday an $11 billion takeover approach from U.S. casino operator MGM Resorts significantly undervalued its business, as companies move to capitalise on an expected boom in U.S. sports betting;
- U.S. President Donald Trump’s outgoing administration plans to approve a controversial land swap needed for Rio Tinto and partners to build an Arizona copper mining project that Native American tribes say will destroy sites of cultural and religious value.
The summary as at 04.01.21
European stocks are expected to open in mixed territory on Monday, the first trading session of the new year.
- Asian shares resumed their ascent as investors pinned their hope on vaccines to eventually deliver a global economic upturn, even as a possible tightening in virus rules for Tokyo pulled Japanese stocks off 30-year highs;
- Oil prices rose on expectations that OPEC and allied producers may cap output at current levels in February at a meeting later in the day as the coronavirus pandemic keeps worries about first-half demand elevated;
- Europe will see its biggest transfer of share trading in more than two decades when stock exchanges open for business in 2021, with Brexit shifting its centre of gravity away from London;
- OPEC sees plenty of downside risks for oil markets in the first half of 2021, its secretary general said on Sunday, a day before meeting allies led by Russia to discuss output levels for February;
- Japanese Prime Minister Yoshihide Suga said the government would consider declaring a state of emergency for the Greater Tokyo metropolitan area as coronavirus cases climb and strain the country’s medical system;
- Britain will become the first country to roll out the low cost and easily transportable AstraZeneca and Oxford University COVID-19 vaccine, another step forward in the global response to the pandemic;
- Shareholders in Fiat Chrysler Automobiles and PSA Group are expected to approve the deal, paving the way for the $52 billion transaction to be completed by the end of March.
- Deutsche Bank is gaining in financial strength, putting Germany’s largest lender in a position to play a leading role in European banking consolidation, CEO Christian Sewing was quoted on Sunday as saying.