US stocks steadied, and the dollar slipped back to 103.92 today. With the earnings season mostly over, data points to shrinking margins for many S&P 500 companies. While they are still above pre-pandemic levels, the reduced level of profits could be a sign that job cuts are further down the line. We have seen some banks and tech companies already cutting the workforce, but this is more likely due to overstaffing in previous years. The 10yr US Treasury yield settled higher at 3.82%. US household debt soared by the biggest amount in two decades to $394bn, a follow-up from a stellar retail sales performance, highlighting that consumers are relying more on credit than on personal savings; mortgage balances drove the increase. Meanwhile, producer prices jumped by 0.7% m/m, the biggest increase since June, citing energy prices as the key source of the increase.
Base metals sentiment improved today following consecutive negative sessions in recent trading sessions. Aluminium found support at $2,370/t to rebound to settle just below $2,400/t at $2,394/t. SHFE aluminium closed the day marginally unchanged at CNY2,681/mt; the anticipated output reduction enforcement has not come to fruition, are social inventory continues to rise. Copper once again struggled below $8,817/t, jumping higher during the day back above $9,000/t to $9,023/t. Front-end spreads for both metals remain in contango, as demand for the material is not yet emerging. Lead and zinc closed slightly lower at $2,029.50/t and $3,003.50/t, respectively; the stock level for both continue to improve and now stand at 24,700mt and 29,850mt, respectively.
Oil futures remained unchanged after the OPEC+ alliance said that it would stick to the oil deal agreed in late 2022 for the rest of the year. WTI and Brent now trade at $78/bl and $85/bl. Precious metals also wavered but settled slightly higher on the day at $1,840/oz and $21.71/oz, respectively.
All price data is from 16.02.2023 as of 17:30
