Market update: US manufacturing data keeps traders happy, oil prices rise, Saudi Aramco the most profitable company

2 Apr

by Mihály Tatár

 

Good Morning!

 

  • After the positive Chinese data surprise, the US manufacturing numbers showed a slower, but still healthy expansion (ISM 55.3, PMI 52.4), making the day for investors (SPX +1.16%, Nasdaq +1.29%, DAX +1.35%, Nikkei +0.12%, Shanghai +0.11%). (To put the moves into perspective, since January – or rather, since the Fed U-turn and the US-China trade news – the SPX rallied 15%, the DAX 12%, and China 29%.) Oil prices also appreciated the developments (WTI 61.70 USD, Brent 69.10 USD, advancing through the key levels), and while bullish traders celebrated, Aramco announced that it is the world’s most profitable company, making 111 billion USD of profit in 2018. (It’s even more shocking if you consider that it paid the government 102 billion in taxes before this result. Where is the money going?) The German manufacturing data, however, remained for now a disaster (March PMI 44.1, contraction – EURUSD is testing 1.12, with many wondering what the ECB could do that it hadn’t tried before, or what Washington will say if EUR moves under 1.12. Don’t forget that the US trade balance – Trump’s favorite election topic – , barely improved since the trade wars because of the super strong Dollar). The UK Parliament rejected all Brexit Plan Bs – after rejecting May’s deal three times. (Some strategists are optimistic – May’s last minute blackmailing of lawmakers, ’it’s me or I will delay Brexit until the end of times’, or alternatively, a ’custom union + new referendum or election package’ should solve the issue and boost the GBP, the political legitimacy of the entire process is so damaged by now that the uncertainty may continue well beyond April. It’s no wonder that the safe haven currency pair against uncertainty, the EURCHF, trades under 1.12, or 287 against the Forint.)

 

  • As further examples of the ’new normal’, while Japan was busy with the new phenomenon that men marry holograms and female AI programs instead of women – don’t expect a rapid rebound in horror show Japanese demographics – , amid China working on cruise missiles that can be fired from container ships – potentially creating a disguised military fleet of civilian vessels – in a somewhat ironical development, the infighting within the Democrats intensified: The long-time most popular person in the party, potential presidential nominee and former Vice President, Joe Biden, was accused of ’inappropriately hugging and kissing’ several women. (Not raping. Not groping. It’s kissing. I guess the progressive stars of the party had to do something, anything to not to lose the nomination with their low polling numbers and went again into their usual character assassination mode. While personally I don’t like anything Joe Biden says or represents, and being kissed on the cheek must be very painful – seriously, this is where we got? Note that Biden actually used to have some chance against Trump in 2020, being very respected by white blue-collar workers.)

 

 

Have a nice day,

Mihaly

 

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