Archives of “May 2019” month

rss

Fitch ratings agency on … errr … soybeans. China could purchase fewer US beans.

  
  Analysis

Fitch referencing the US  – China trade war in their assessment that China’s purchasing of US soybeans could be “substantially tempered”.

For the remainder of 2019.
If the US and China want to come to some sort of patched up truce China agreeing to buy beans is always a go to.
Both Xi and Trump need some sort of agreement. Buy MOAR beans might just about be it.

US major indices rally on turnaround Tuesday

  
Analysis, US Market
The major indices enjoyed a turnaround Tuesday.
The final numbers are showing:
  • The S&P index rose 22.54 points or 0.80% to 2834.41
  • The Nasdaq index rose 87.47 points or 1.14% to 7734.49
  • The Dow rose 207 points or 0.82% to 25532.05
The gains were a welcome relief after yesterday’s run lower, but the close was not the best.  The major indices ended near the middle of the low to high trading ranges.  The good news is that the indices did not go negative.
Tomorrow will be key for investor sentiment.  There was a little more positive chatter today from the Pres., Mnuchin, but 25% tariffs may bring revenues into the treasury, but it comes out of consumers pockets.   Earnings projections and multiples could get hurt.  With the market 8 days off the all-time highs when chatter was of an imminent deal (and no 25% tariffs), the story is simply not the same.   The economy may or may not slow to a recession, but earnings growth for some companies, has a headwind to deal with.
PS European tariffs may also be an issue soon too…..

OPEC says supply fell slightly in April

  
Analysis, Crude

Highlights of the OPEC monthly report

  • OPEC output fell by 3000 bpd to 30.031 mbpd, citing secondary sources
  • Members bound by supply deal met 150% of pledged reductions
  • Oil inventories in OECD rose by 3.3m barrels and stood 22.8m barrels above 5-year avg
  • 2019 global demand forecast unchanged
  • Trims non-OPEC supply growth forecast by 40,000 bpd to 2.14mbpd
  • Saudi output fell to 9.742mbpd
The changes here are all very small. They note that US shale is facing logistical challenges.

Trump says US is in a ‘fantastic position’ against China on trade

  
  Analysis

Trump tweets more about US-China trade relations

The latest tweets read:

China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China…..

….so that they will be more competitive for USA buyers. We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election. We are the “piggy bank” that everyone wants to raid and take advantage of. NO MORE!

He’s right in that sense that China can’t choose to retaliate tit-for-tat in terms of tariffs but there’s other ways in which China can pursue to defend its interests. And weaponising the Chinese yuan would definitely be one of them, although they would very much like to avoid that where possible.

Eurozone March industrial production -0.3% vs -0.3% m/m expected

  
  Analysis

Latest data released by Eurostat – 14 May 2019

  • Prior -0.2%; revised to -0.1%
  • Industrial production WDA -0.6% vs -0.8% y/y expected
  • Prior -0.3%
Industrial activity in the region slowed further in March and this just pretty much confirms the sluggishness of the sector in Q1 2019. This is very much a lagging indicator as we already had plenty of glimpses into the sector’s performance over the past month or so.
Go to top