April 6th, 2017
Daily Market Commentary
Economic News:
- Building Permits in Canada were reportedly down 2.5% in month-over-month terms, worse than estimated.
- Continuing jobless claims in the US were reported at 2.03M, below estimates. Initial Jobless Claims were also below estimates.
- The Unemployment Rate in Greece was quoted at 23.5%.
Canada:
- With interest rates probably on hold in Canada until 2018, preferred shares in the nation may have room to continue rallying this year. The securities, equity instruments that because of their regular dividends can appeal to debt investors, have grown in popularity with fixed-income money managers looking for returns in a low-yield world. They’ve outperformed Canadian stocks and bonds this year.
- Barrick Gold Corp. agreed a $960-million deal to sell half of one of its biggest mines to a unit of Shandong Gold Group, a move it says will presage deeper cooperation with China’s second-biggest producer by market value.
United States:
- U.S. index futures were little changed as investors assessed the possible effect of the Federal Reserve beginning to shrink its balance sheet amid policy makers’ concerns that stocks have gotten expensive. The benchmark fell on Wednesday with banks and energy companies tumbling in the last 90 minutes of trading.
- President Donald Trump is set to win the most significant achievement of his troubled administration when the Senate clears the way Thursday for the confirmation of his Supreme Court nominee, but the episode will leave the Senate battered and paralyzed. Senate Republicans plan to override Democratic opposition with a rule change to shield Neil Gorsuch and all future high court picks from being blocked by the minority party.
International:
- Losses in banks dragged European stocks lower after minutes from the last Federal Reserve meeting showed policy makers may shrink the central bank’s balance sheet this year. Lenders headed for a one-month low as investors speculated that a balance-sheet reduction could damp the need for Fed interest-rate hikes.
- The Bank of England’s corporate-bond purchases, one of the stimulus measures announced after the Brexit vote, could conclude as early as this month as the program nears its 10-billion pound ($12.5 billion) target.
- Unilever plans to buy back 5 billion euros ($5.3 billion) of stock and divest its spreads business in an effort to safeguard its independence after fending off a takeover bid from Kraft Heinz Co.
- Chinese stocks in Hong Kong fell, led by financial companies, as investors weighed signs U.S. Federal Reserve officials favor shrinking the central bank’s balance sheet this year.
- India unexpectedly raised the reverse repo rate while keeping the benchmark unchanged, effectively tightening policy to step up the fight against accelerating inflation. Bonds fell. The reverse repo rate was raised to 6 percent from 5.75 percent while the benchmark repurchase rate was kept steady at 6.25 percent
*All sources from Bloomberg unless otherwise specified
