Wednesday, May 12We Break the News

Canadian Stocks Fall for 2nd Session, US Stocks Fall, Brazilian Stocks Volatile, Baltic Exchange Dry Index at 2-Week Low

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Canadian Stocks Fall for 2nd Session
Canada’s main stock index fell for the second session on Tuesday, with the benchmark S&P/TSX trading below the 18,700 level dragged down by weakness in commodity prices. Gold prices declined to a 3-week low and crude oil prices fell after the Suez Canal was reopened to traffic. On Monday, Canada’s National Advisory Committee on Immunization recommended that the AstraZeneca Covid-19 vaccine should not be used in adults under age 55 while rare cases of serious blood clots following vaccination are being investigated. On the economic data front, the average weekly earnings of non-farm payroll employees grew the most in six months in January.
US Stocks Fall
Wall Street traded lower on Tuesday, with the Nasdaq leading the losses as a rise in bond yields pushed investors to sell-off high-flying tech shares. The benchmark 10-year government bond yield hit a fresh 14-month high as investors continue to digest prospects of a strong economic recovery. President Joe Biden will release details on the first phase of his $3 trillion economic plan focusing on upgrading the infrastructure this week and has also unveiled a plan for faster coronavirus vaccination which includes offering inoculations to 90% of adults. Meanwhile, the implosion of Archegos Capital Management remains in the spotlight after Japan’s largest bank, the Mitsubishi UFJ Financial Group, warned of a potential $300 million loss.
Brazilian Stocks Volatile
Brazil’s Ibovespa swung between small losses and gains on Tuesday, with fiscal concerns weighing on market sentiment as Brazil’s government is on course to break its most important budgetary rule this year, the so-called “spending ceiling”. The 2021 budget that was announced last Thursday has been labelled as “unfeasible” by Economy Minister Paulo Guedes due to the accounting maneuvers approved by Congress to accommodate the festival of parliamentary amendments. Meantime, Brazilian President Jair Bolsonaro has replaced six ministers in a sweeping cabinet reshuffle on Monday as his administration comes under intense pressure amid Covid-19 mismanagement. Meanwhile, the pandemic situation in the country continues to deteriorate, with alarm and anger growing over the lack of access and the slow pace of vaccinations amid a health care system nearing collapse. On the data front, the Brazilian economy added a net 401,639 jobs in February, the highest monthly figure in at least 20 years.

Baltic Exchange Dry Index at 2-Week Low
The Baltic Dry Index fell 59 points, or 2.7% to 2,103 on Tuesday, its weakest since March 16th. The capesize index, which tracks iron ore and coal cargos of 150,000-tonnes, decreased 72 points to its lowest since March 24th at 2,217; and the panamax index which tracks cargoes of about 60,000 tonnes to 70,00 tonnes of coal and steel-making ingredient iron ore, went down 89 points to its lowest since March 17th at 2,723. Among smaller vessels, the supramax index dropped 35 points to 1,916.

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