Our world’s economic environment is not static, and exciting developments with far-reaching implications are constantly unfolding across the globe. Notably, Nvidia’s CEO expressed confidence in onshore semiconductor manufacturing capabilities in the U.S., while Hong Kong’s money supply saw a year-over-year increase. Brazil’s unemployment rate remained unchanged at 9.6%. Meanwhile, of course, U.S. president Trump stole the headlines with his statements regarding the stock market and their proposed tariffs. With April data coming in across the board, all eyes turn to PMI manufacturing indices and other economic indicators from around the world.
Back in the U.S., the April Chicago Purchase Managers Index (PMI) missed as well, signaling weakness in manufacturing. On the other side of the ledger, personal income and spending came in much better than expected. In Asia, Kone, the Finnish elevator manufacturer, recently reported decreased new building solution demand in China. At the same time, Australia continued to exhibit a jaw-droppingly excellent trade balance.
Nvidia’s Confidence in Onshore Manufacturing
Nvidia’s CEO recently stated a strong belief in the company’s ability to manufacture semiconductors onshore using available resources in the United States. Congressional and media focus The semiconductor industry is very much under the microscope right now. Fears have focused around supply chain disruption and an enormous reliance on global production.
“Certain we can manufacture semis onshore with resources available in the US.” – Nvidia CEO
This confidence corresponds perfectly with the growing trend towards the burgeoning technology industry. Manufacturers are increasing their interest in domestic manufacturing in order to avoid supply chain disruptions, exacerbated by recent geopolitical tensions. Our CEO has reiterated several times that China is watching the U.S. efforts very intently, signifying a competitive environment for semiconductor production.
“China is right behind us. We’re very, very close.” – Nvidia CEO
Nvidia’s emphasis on domestic manufacturing is indicative of a larger trend in the company. This change is indicative of a broader movement among technology firms to increase their domestic manufacturing capacity.
Economic Indicators from Hong Kong and Brazil
Even more remarkable than their fiscal policy was Hong Kong’s monetary policy. As of March, the broadest measure of the money supply (M3) was growing at 7.7% YoY, up from a previous increase of 6.8%. This is a very positive sign, reflecting a much more favorable financial climate. Further, it would unlock a tremendous amount of new economic development opportunity for the region.
Brazil’s March National Unemployment Rate came in at 7.0%, just as expected. The continued stability in unemployment figures shows that the labor market is overall stable – a backdrop that could lead to some eventual, broader economic recovery and growth.
These figures create a somewhat contradictory impression of America’s economic prosperity. They are important signals for base metals policymakers and investors that are watching closely for signs of regional economic awakening.
U.S. Market Dynamics and Trade Relations
Indeed, President Trump was recently quoted on the current stock market, giving credit for the good performance of the stock markets to the Biden administration. He reiterated that tariffs will be coming soon and called for calm among investors.
“This is Biden’s stock market; Tariffs will start kicking in; Be patient.” – Pres Trump
U.S. stock futures are higher, up 1.1 to 1.5% in Asian trading hours. These comments are coming out against this backdrop of rapidly changing market conditions. On a positive note, the President did sure sound like he was willing to cut a deal with China on tariffs and restore the trade relationship.
“Tariffs have not kicked in yet and China is already doing very poorly; Hope we will make a deal with China at a certain point, we are talking.” – Pres Trump
The U.S. Treasury Department has confirmed that an agreement was signed with Ukraine to establish a reconstruction investment fund, reflecting ongoing international cooperation amidst geopolitical challenges.
As a result, the April Chicago PMI came in at 44.6, below the 46.0 that analysts were anticipating. This decrease is alarming given the recent strength of U.S. manufacturing activity.
Personal income soared by 0.5%, more than the 0.4% forecast. At the same time, growth in personal spending shot up by 0.7%, well above the expected 0.6%. Taken together, these big figures point to consumer confidence being pretty strong in spite of the broader economic malaise.
Global Trade Balances and Central Bank Actions
Australia posted a stunning trade surplus of A$6.9 billion in March, way over expectations of A$3.2 billion. This is a very positive turn of events considering Australia’s exceptional export performance in the face of changing global demand.
In Colombia, the Central Bank took proactive measures by cutting the overnight lending rate by 25 basis points to 9.25%. This decision is a welcome attempt to bring new economic activity at a time when inflationary pressures remain.
In April, China’s People’s Bank (PBOC) eased by doing a net CNY1.2 trillion in outright reverse repos. This is a big lift from the CNY800 billion of repo activity conducted in March. This step is in conjunction with other measures to improve liquidity and calm financial markets.
As countries navigate these economic challenges, leaders are calling for concerted measures to stabilize markets and address weak links within their economies. During a visit to Chongqing last month, Chinese President Xi called on the country to take more targeted, sectoral action to reach economic targets.
“Urge measures to stabilize markets and expectations; To address weak links in economy; to achieve targets in all aspects.” – China Pres Xi