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China Industrial Profits data for March: +92.3% y/y (prior +20.1% y/y)

China Industrial Profits reported at +92.3% y/y by the newswires.

There is a large ‘base effect’ component to this, March 2020 saw China plunged into lockdown.
For the YTD (January – March) comes in at +137% y/y (prior +178.9%)
Later this week we’ll get the official manufacturing and non-manufacturing PMIs for April from China.

more to come

Coronavirus – US Chamber of Commerce official sees risk that India could be a drag on the global economy

A US Chamber of Commerce official sees risk of a slowdown in India’s economy as a result of the Covid-19 jump, which could be a drag on the global economy.

Headlines via Reuters (perhaps today’s Captain Obvious award?)
  • “We expect that this could get worse before it gets better”
  • a “real risk” the Indian economy would falter given the circumstances
  • “There’s a big concern about the draft on the economy by a devastating, spreading virus in India.”

Federal Reserve FOMC policy meeting this week – preview

A snippet from BoA on the Federal Open Market Committee meeting on Wednesday 28 April 2021

  • We see the Fed committed to FAIT and reactive not proactive. 
(ps. ICYMI FAIT is Flexible Average Inflation Targeting)
  • We continue to look for the Fed to taper in early 2022, signalling this well in advance-likely six months-and start hiking rates in 2H 2023. 
  • Once the Fed starts hiking, we expect a pace that is faster than current market pricing with a higher terminal rate. 
For more preview, this posted earlier:
  • FOMC meeting Wednesday 28 April 2021 – preview
A snippet from BoA on the Federal Open Market Committee meeting on Wednesday 28 April 2021 
And, for your central bank fix (if needed) you don’t have to wait until Wednesday – the Bank of Japan is today!

UK to propose COVID-19 vaccination ‘passports’ for international travel at the G7 meeting

UK Telegraph with the report, the UK proposing ‘travel corridors’.

UK Transport Secretary to meet with G7 counterparts at the summit on June 11-13 with the proposal.
Tele says such a program could be in place by June 28. Seems a compressed timeline, can they move that quickly?
Proposal includes:
  • so called Covid passports
  • ‘green list’ coutnires for travel to and from
  • bilateral ‘travel corridrors’ to allow bypassing tests, quarantine for those vaccinated
  • UK, US, France, Italy and Germany planned initially
Link here for more (its the Tele so may be gated)
An alternative way to get into whatever country you like! 😉
UK Telegraph with the report, the UK proposing 'travel corridors'.

Reminder – Bank of Japan monetary policy meeting decision due Tuesday 27 April 2021

The really quick preview of this is no change to any of the major policy planks is expected.

The thing to watch will be the updated forecasts in the ‘Outlook Report’ that’ll be published at the same time as the decision Statement. I popped up a preview of this yesterday:
  • Bank of Japan monetary policy meeting concludes Tuesday 27 April 2021 – preview

Note that there is no firmly scheduled time for the Bank of Japan announcement, expect it somewhere in the 0230 to 0330 GMT time window.

Governor Kuroda press conference follows at 0630GMT:
The really quick preview of this is no change to any of the major policy planks is expected. 

Both the S&P and NASDAQ close at all time record highs

NASDAQ index remains below its all-time intraday high. The S&P extended its all-time intraday high and backed off

Both the S&P index and the NASDAQ index are closing at record high levels.
  • For the S&P, the previous all time high close came in at 4185.47. The index closed just above that level at 4187.74
  • For the NASDAQ index the previous all-time high close came in at 14095.47.  Closing level came in at 14138.78
The Dow Jones lagged and close lower on the day. It is down for the second time in three days
The Russell 2000 was higher by 1.15%
The final numbers are showing:

  • S&P index close up 7.57 points or 0.18% at 4187.74. The high price reached 4194.19. That was just above the all-time high price reached on Friday at 4194.16
  • NASDAQ index rose 121.97 points or 0.87% at 14138.78. It’s high price reached 14154.03. The all-time high price is at 14175.12 reached on February 16
  • Dow industrial average felt -61.52 points or -0.18% at 33981.97
  • Russell 2000 closed up 26.13 points or 1.15% at 2297.99
below is the NASDAQ index. The prices currently between the previous record high close, and the all-time intraday high.

NASDAQ index remains below its all-time intraday high. The S&P extended its all-time intraday high and backed off
Tesla report earnings after the close.

UPDATE for TESLA earnings:
  • earnings-per-share $0.93 versus $0.79 estimate
  • revenues $10.39 billion versus $10.29 billion estimate
  • expects to achieve 50% annual growth in deliveries
  • free cash flow $293 million versus estimate of -$82.8 million
The price of TSLA stock is trading above and below unchanged from the closing level in volatile trade. The stock price closed at $738.20.

Breakout in copper prices a positive sign but 2010 high looms

What’s next for copper

What's next for copper
There are some very compelling arguments that a significant deficit in copper production is looming.
Today’s price action certainly underscores that. It’s up 10 cents to $4.43/lb, the highest since 2011.
All the infrastructure spending,combined with short-term mine closures at the height of the pandemic, have created a boom. With that, copper will quickly threaten the 2010 high of $4.65.
If that gives way, the sky is the limit. It’s tough to envision a scenario where near-term demand drops (even at record high costs) because overall copper costs in most products and projects are still a small fraction of overall costs.
On the supply side, the pipeline for copper projects isn’t going to catch up for awhile in part because there’s a long lag between sanctioning and production.
For broader market watchers, the signal from Dr Copper is very bullish at the moment and I believe that’s the right take.
If you’re more interested in a deeper look at copper and refining, here’s a extensive thread that shows that refiners are buying unrefined product above the cost of production. The takeaway is that they must believe prices are heading higher and are struggling to meet demand.