The news shaping the markets today

US Secretary of State Antony Blinken is preparing to announce new aid to help restore Ukraine’s electricity. The US dollar index traded lower on the news.

Japan’s retail sales rose by 4.3% year-over-year in October. This being the eighth straight month of growth lent support to the JPY/USD forex pair.

US Dallas’ Fed general business activity index for manufacturing in Texas rose to -14.4 in November, from -19.4 a month ago. However, the new orders index dipped to -20.9, from -8.8 in the previous month, sending the Dow Jones index lower by around 500 points on Monday.

Mexico’s trade deficit shrank to $2.012 billion in October, from $2.799 billion in the year-ago month, exerting pressure on the MXN/USD forex pair.

Ireland’s retail sales grew by 0.7% in October, compared to a 1.7% decline in the previous month. The news sent the EUR/USD pair higher in forex trading this morning.

What’s happening: Shares of Pinduoduo rose sharply on Monday, after the company released results for its third quarter.

What happened: China’s ecommerce platform reported stronger-than-expected sales and earnings for the latest quarter.

However, sales from one of the company’s major segments fell sharply during the quarter.

How were the results: Pinduoduo reported a sharp rise in quarterly sales, surpassing market views.

• Revenues surged by 65% year-over-year to $4.99 billion, topping the consensus estimates of $4.31 billion.
• Non-GAAP earnings per ADS came in at $1.21, exceeding Street expectations of 65 per share.

Why it matters: China imposed several lockdown restrictions due to the government’s zero-covid policy during the quarter.

The recurrent imposition of restrictions forced consumers to shop online. A rebound in overall consumer spending also helped online retailers in China to grow their business.

JD.com reported 11.4% growth in revenues for the third quarter, while Alibaba Group also posted 3% revenue growth in the July to September period.

Categories like agricultural produce, beauty products and consumer electronics performed well during the quarter, Pinduoduo’s CEO Lei Chen said during the earnings call.

Pinduoduo had recently announced the launch of its international platform, Temu, which sells affordable products made in China mainly to US consumers. The platform emerged as of the rivals to Shein, which also sells low-cost products to consumers in the West.

Pinduoduo’s revenues from online marketing services and others climbed 58% year-over-year to $3.996 billion, while revenues from transaction services jumped 102% to $987.2 million. However, revenues from merchandise sales contracted by 31% year-over-year to $7.9 million in the quarter.

“We will increase our R&D investment to further enhance the supply chain efficiency and agricultural digital inclusion,” Chen stated. However, management did not issue any forecast for the current quarter.

How shares responded: Pinduoduo’s US-listed shares climbed to a 52-week high of $76.36 following the release of quarterly results, but settled higher by 12.6% at $74.05 on Monday. The stock has gained around 35% over the past month.

What to watch: Investors will keep an eye on China’s covid-19 lockdown policies as well as any updated by Pinduoduo on its planned investments.

The markets today

The Canadian dollar will be in focus today ahead of GDP data from the country

Context: The CAD/USD forex pair fell to a one-week low on Monday, following economic data from Canada.

Details: Statistics Canada released data showing that the country had a current account deficit of C$11.1 billion in the third quarter. This was the biggest gap since the third quarter of 2020 and followed two quarters of surplus.

The trade balance in goods and services also swung to a deficit of C$4 billion in the third quarter, versus a surplus of C$5.9 billion in the prior quarter.

“We expect deficits to persist into 2023 as trade and income flows return to more normal patterns,” BMO Capital Markets analyst Shelly Kaushik said in a note to clients.

The price of crude oil, one of Canada’s major exports, also fell earlier during the session following protests in China against the country’s strict lockdown policies. However, oil prices recovered later in the session, gaining around 1.3% to close at $77.24 per barrel on Monday.

The Bank of Canada is now widely expected to raise interest rates by 25 basis points at its meeting on December 7.

The CAD/USD forex pair fell around 0.9% to $1.3496 on Monday, hitting the lowest level in a week.

What are expectations: Traders await economic data on Canada’s GDP growth rate today. Canada’s GDP, which grew by 0.8% during the three months to June 2022, is expected to grow by just 0.4% in the third quarter. Analysts expect the country’s economy to expand by 0.1% in September, unchanged from the rate reported in August.

Markets will also keep an eye on jobs data, scheduled for release on Friday, which could provide more insight into the BoC’s interest rate decision next week.

Other Markets: European indices closed lower on Monday, with the FTSE 100, DAX 40, CAC 40 and Stoxx Europe 600 down by 0.17%, 1.09%, 0.70% and 0.65%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Turkey’s economic confidence index, balance of trade, Spain’s inflation rate and industrial confidence indicator, Italy’s industry sales and producer price inflation, South Africa’s unemployment rate and unemployed persons, UK’s consumer credit, Mortgage lending, mortgage approvals and net lending to individuals, Eurozone’s economic sentiment indicator, industry confidence indicator, selling price expectations, services confidence indicator, consumer confidence indicator and consumer confidence price trends, Brazil’s Producer price inflation and federal tax revenues, Mexico unemployment rate, Germany’s consumer price index, as well as US Redbook index, Case Shiller home price index, FHFA house price index, Dallas Fed general business activity index and API crude oil stocks.

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