The news shaping the markets today

Russia’s President Vladimir Putin said the country wants an end to the ongoing war, a day after Ukraine’s President Volodymyr Zelenskyy visited the White House. The news sent WTI crude prices slightly higher this morning.

The People’s Bank of China announced an injection of 704 billion yuan into the country’s banking system this week, which is the largest weekly injection in two months. The CNY/USD pair declined slightly in forex trading this morning.

UK car production grew 5.7% year-over-year to 80,091 units in November, recording growth for the second month in a row, which lent support to the GBP/USD forex pair.

Japan’s annual inflation rate increased to 3.8% in November, from 3.7% in the previous month. This being the highest rate since January 1991 sent JPY/USD pair lower in forex trading this morning.

Australia’s private sector credit grew by 0.5% in November, exerting pressure on the AUD/USD forex pair.

What’s happening: Shares of Micron Technology fell on Thursday, after the company released results for its first quarter.

What happened: The largest US maker of memory chips reported weaker-than-expected results for its latest quarter and issued weak guidance.

The chipmaker also announced a restructuring plan, with a layoff of a part of its workforce.

How were the results: The Boise, Idaho-based company reported a decline in sales for the first quarter ended November 30.

• Revenues declined by around 47% year-over-year to $4.08 billion but missed the consensus estimates of $4.12 billion.
• Net loss came in at $195 million, or 18 cents per share, versus a year-ago profit of $2.31 billion, or $2.04 per share.
• Adjusted loss for the quarter was 4 cents per share, wider than Wall Street expectations of a loss of 1 cent per share.

Why it matters: The business of several chipmakers suffered during the quarter due to factors like surging inflation, higher interest rates, and covid-19 restrictions in China, which limited overall consumer spending and caused companies to cut down on their purchases of PCs and smartphones.

Device manufacturers are stuck with high stockpiles of components, less than a year after the chipmakers were unable to produce enough to meet surging demand.

Micron announced a restructuring plan in which it expects to reduce its headcount by around 10% next year. As of September 1, Micron had approximately 48,000 employees around the world.

Micron also plans to lower its investments to $7-$7.5 billion in fiscal 2023. The company made investments of $12 billion during fiscal 2022.

CEO Sanjay Mehrotra said during the earnings call that a reduction in client inventories could support revenue growth in the second half of fiscal 2023.

For its fiscal second quarter, the company projected revenues of $3.6-$4 billion, compared to market views of $3.75 billion. The company also guided to a quarterly adjusted loss of 52-72 cents per share, higher than projections of a loss of 30 cents per share.

Several analysts, including, Mizuho, UBS and Morgan Stanley cut their price targets for Micron, following the quarterly results.

How shares responded: Micron’s shares fell 3.4% to close at $49.43 on Thursday. The stock has lost around 12% over the past six months.

What to watch: Investors will continue monitoring the global macroenvironment and China’s relaxation of covid restrictions.

The markets today

The Canadian dollar will be in focus today ahead of a couple of economic reports

Context: The CAD/USD forex pair fell on Thursday as traders digested domestic economic data.

Details: Wall Street stocks recorded sharp losses on Thursday, as investors assessed the US labour market, which in turn exerted pressure on the Canadian dollar. On Wednesday, US stocks notched their biggest daily gains month-to-date.

The CAD/USD forex pair is generally sensitive to changes in investor sentiment in the US. This is because the US is a big importer of Canadian commodities, including oil.

WTI crude oil prices also fell 80 cents to $77.49 per barrel on Thursday. The rise in the US dollar also exerted pressure on the loonie. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.3% to 104.43 on Thursday.

Statistics Canada reported that Canadian wholesale trade grew 1.9% in November, recording growth for the second month.

Average weekly earnings of non-farm payroll employees in the country climbed 3.4% year-over-year to C$1,171.60 in October, representing the 17th consecutive month of growth. The recent data was followed by a mixed inflation report released on Wednesday.

The CAD/USD forex pair fell around 0.3% to 1.3650 on Thursday. The S&P/TSX Composite index declined by 1.13% to close at 19,349.66, partially erasing the sharp gains recorded in the previous session.

What are expectations: Traders await the release of economic data on GDP and government budget value from Canada today. The Canadian economy had grown by 0.1% in September and is expected to have remained flat in October. Analysts expect Canada to report a government budget deficit of C$6.1 billion in October, compared to C$2.2 billion in September.

Other Markets: European trading indices closed lower on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 down by 0.37%, 1.30%, 0.95% and 0.97%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

France’s producer price inflation, Spain’s GDP growth rate and producer price inflation, Turkey’s tourist arrivals, Italy’s business confidence and consumer confidence, India’s foreign exchange reserves, Brazil’s mid-month inflation rate, Mexico’s balance of trade and economic activity, US personal income, personal spending, durable goods orders, personal consumption expenditure price index, new home sales, building permits, University of Michigan consumer sentiment, and Baker Hughes crude oil rigs, as well as China’s foreign direct investment.