Market Talk - Wednesday, Aug. 18

ASIA:

President Xi Jinping of China is considering raising taxes on wealthy citizens to create a “common prosperity.” In a Tuesday meeting, the president urged for a “reasonable adjustment of excessive incomes and encouraging high income groups and businesses to return more to society.” However, exact tax figures or plans were not revealed. The top 10% of China’s 1.4 billion population owned 41% of all wealth in 2015, marking a drastic increase from 27% in 1978. The poorest half of the population saw an income decline of 15% in 2015, compared to an on par level of 27% in 1978.

Huawei announced plans to reclaim the smartphone “throne” after a chip shortage combined with a US blacklisting caused the company’s revenue to plunge 29% in the first half of the year. In 2019, the company was deemed a national security threat by the US under the Trump administration. Huawei Chairman Guo Ping said that his company has the ability to create advanced technology chips “but no one can help us build it” due to sanctions. “Huawei will continue to exist in the field of mobile phones and with continuous progress in chip production, the smartphone throne will eventually return,” Ping said.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 161.44 points or 0.59% to 27,585.91
  • Shanghai increased 38.31 points or 1.11% to 3,485.29
  • Hang Seng increased 121.14 or 0.47% to 25,867.01
  • ASX 200 decreased 8.90 points or -0.12% to 7,502.10
  • Kospi increased 15.84 points or 0.50% to 3,158.93
  • SENSEX decreased 162.78 points or -0.29% to 55,629.49
  • Nifty50 decreased 45.75 points or -0.28% to 16,568.85

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00240 or -0.33% to 0.72330
  • NZDUSD decreased 0.00430 or -0.62% to 0.68863
  • USDJPY increased 0.39800 or 0.36% to 109.99
  • USDCNY decreased 0.00460 or -0.07% to 6.48653

Precious Metals:

  • Gold decreased 1.94 USD/t oz. or -0.11% to 1,784.02
  • Silver decreased 0.17 USD/t. oz or -0.70% to 23.470

Some economic news from last night:

Japan:

Adjusted Trade Balance increased from -0.06T to 0.05T

Core Machinery Orders (MoM) (Jun) decreased from 7.8% to -1.5%

Core Machinery Orders (YoY) (Jun) increased from 12.2% to 18.6%

Exports (YoY) (Jul) decreased from 48.6% to 37.0%

Imports (YoY) (Jul) decreased from 32.7% to 28.5%

Trade Balance (Jul) increased from 384.0B to 441.0B

South Korea:

Exports (YoY) (Jul) remain the same at 29.6%

Imports (YoY) (Jul) decreased from 38.2% to 38.1%

Trade Balance (Jul) increased from 1.76B to 1.77B

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