Archives of “November 20, 2019” day

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Global debt reaches record levels

  
Analysis, Economy
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Global debt is currently at it’s highest level in peacetime,

On average, the world’s major economies, have debts of more than 70% of their GDP’s. This is the highest level in the past 150 years apart from s spike during WWII. See the chart below courtesy of the Financial Times

Global debt is currently at it's highest level in peacetime,

In the UK that debt deficit is presently at around 87%, but it is only set to grow with both Conservative and Labour plans to increase public spending levels. This will in part be a Brexit boost to lift morale. Increasing welfare states, growing democracies and an ageing population all lead to to the conclusion that global debt is set to keep growing.

Debt

US Treasury 10-year yields slip to fresh two-and-a-half week lows

  
Analysis, Global Indices

10-year yields fall by 5 bps to 1.733%, lowest level since 4 November

USGG10YR vs Gold

Risk-off flows continue to feed through into markets and that is seeing bonds gain further on the day as we begin European trading.
In turn, this is also fueling gains in gold with price now up by 0.4% just above $1,478.
As mentioned earlier, with little else on the economic calendar, the risk mood will be the key driver affecting markets in trading today. So far, there doesn’t appear to be much change in sentiment since Asia Pacific trading.

Global Times editor: US has turned Hong Kong into the focus of China-US competitiion

  
  Analysis
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A tweet by Global Times’ editor-in-chief, Hu Xijin

“The US has turned HK into the focus of China-US competition. It’s all the people in Hong Kong, including foreigners and foreign companies that suffer. The mainland only feels limited pain. Beijing has no reason to back off on issue of sovereignty, and let HK be at US’ disposal.”

He’s making the above comment in relation to the bill that was passed by the US Senate earlier today, in which China views as interference to the situation in Hong Kong.
All this feeds into the trade rhetoric and if anything, it creates yet another potential barrier for both sides to try and get towards a “Phase One” trade deal.

Japan trade balance for October Y 17.3bn (expected Y 229.3bn)

  
Analysis, Economy
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Japan trade balance for October Y 17.3bn

  • expected Y 229.3bn, prior Y -124.8bn

trade balance adjusted Y -34.7bn

  • expected Y 248.1bn, prior Y -97.2bn

exports -9.2% y/y –  worse than expected and the biggest y/y fall in 3 years.

  • expected -7.5%, prior 5.2%

imports -14.8% y/y – not as bad as expected but not good, ditto on the biggest y/y fall in 3 years.

  • expected -15.2%, prior -1.5%
More on export performance. Exports to:
  • the US down 11.4% y/y
  • to China down 10.3% y/y
  • to the EU down 8.4% y/y
  • to Asia down 11.2% y/y

US-China relations: US Senate passes bill in support of Hong Kong protests

  
  Analysis
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The bill will head on back to the house of Representatives now on its way to final passage.

Its a good idea to look at this in the context of trade talks. You can bet Chinese leaders will be. Not a risk positive.

Overnight :Nasdaq the sole record maker

  
Analysis, US Market
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S&P and Dow close lower

After a few days where the major indices all closed at record levels, today only the Nasdaq is closing with gains. The Dow led the way to the downside.
Home Depot is weighing on the Dow after revenues and forward guidance disappointed today. The price is down $-13.06 or -5.47%.   Home Depot has the 4th highest component weight in the Dow at 5.78%, hence the big impact.
The final numbers are showing:
  • S&P index fell -1.87 points or -0.06% at 3120.17. The high price reached 3127.64. The low extended to 3113.47
  • Nasdaq index rose 20.722 points or 0.24% at 8570.66. The high reached 8589.758. The low extended to 8536.727.
  • Dow index fell -102.37 points or -0.37% at 27933.85. The high reached 28090.21. The low extended to 27894.52
Some winner for the day included:
  • AMD, +3.43%
  • Tesla, +2.75%
  • First Solar, +2.71%
  • Broadcom, +2.12%
  • Amgen, +1.77%
  • Visa, +1.73%
  • Mastercard, +1.58%
  • Intuitive Surgical, +1.52%
  • Intuit, +1.41%
  • Adobe, +1.20%
  • Pfizer, +1.18%
Some of the biggest losers included:
  • Slack, -8.40%
  • Home Depot, -5.47%
  • AT&T, -4.04%
  • Beyond Meat -2.96%
  • Qualcomm, -2.79%
  • Micron, -2.57%
  • Nvidia, -2.01%
  • Bristol-Myers Squibb, -2.0%
  • Chevron, -1.77%
  • Phillip Morris, -1.52%
  • FedEx, -1.30%
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