Major Indices
| Index | Performance |
|---|---|
| S&P 500 | +1.31% |
| DOW Jones | -0.5% |
| NASDAQ | +2.85% |
| FTSE 100 | -0.77% |
| DAX | +0.3% |
| Nikkei 225 | +1.93% |
| Shangai Composite | +0.27% |
Global Sector Performance
China Falls Back Into Deflation
Dragged down by falling pork prices, CPI fell 0.2% YoY which was greater than the 0.1% fall expected by analysts. Producer prices fell for a 13th consecutive month, and a 30.1% decline in pork prices drove the 17.1% fall in prices in livestock and meat. The CSI 300 index remained flat and the renminbi weakened 0.1% against the dollar. The graph below shows the difference in challenges faced by central banks across the world.
Apple Earnings Better Than Expected
Impressive iPhone sales drove Apple's earnings despite overall sales falling for the second consecutive quarter. AAPL subsequently grew 2% in extended market hours. Here is a breakdown of the numbers...
- EPS $1.52 vs $1.43 expected
- Revenue $94.84bn vs $92.96bn expected
- iPhone revenue $51.33bn vs $48.84bn expected
- Gross Margin 44.3% vs 44.1% expected
Quarterly Household Debt and Credit Report from New York FED
Credit card debt levels hit a new record, rising 4.7% this quarter to reach $1.08tn. This increased credit card spending was in line with strong consumer spending statistics and real GDP growth amidst the high borrowing cost environment seen currently. There are concerns that Americans will struggle to manage their debt due to the addition of decade high mortgage rates and savings levels running low from the COVID-19 pandemic. Overall debt levels increased 1.3% to a level of $17.29tn. The graph below shows the level of delinquencies (>30 days past due date) for consumer auto and credit card debt.
Federal Reserve Bank of New York
US 10 Year Treasury Auction
The leargest auction of 10-year yields in the past 2 years happened on Wednesday, with an assigned yield of 4.519% (whilst trading at 4.511%). This spread was four times as large as seen in October, highlighting the demand of yesterdays auction. The government were forced to sell below market prices, feeling the need to attract investors.
Chinese Retreat from the US
Tensions between the US and China have increased in previous years with Chinese investments in the US plunging to $2.5bn. This is the lowest number in decades and heavily down from the record $48bn in 2016. This is partly due to the increasingly challenging environment in the US, after Donald Trump imposed tariffs on billions' worth of Chinese goods and now Biden has banned outbound investmen in strategic sectors. The graphs below show falling levels of both employment and Chinese investment.
Other Headlines
- UK sets out proposals to bring stablecoins into real economy
- UK house prices register first increase since March according to Halifax
- Over 100 British companie have admitted to breaching sanctions on Russia
- UBS posted its first quarterly loss in 6 years
- A ransomware attack on China's largest bank disrupted trades in the US Treasury market