August 20th

Daily Market Commentary

 

ECONOMIC NEWS

• Wholesale Sales in Canada were reportedly up 0.6% in month-over-month terms, below estimates of 1.3%.
• MBA Mortgage Applications in the U.S. were reportedly up 1.4%.
• 2 Bank of England officials, out of 9, voted to hike interest rates. It was expected that all nine would unanimously vote to keep rates unchanged.

Commodities:

• Gold fell for a fourth day in London as a stronger dollar cut demand. Platinum slipped to a two-month low in the longest run of declines in six years.
• Brent crude rebounded from its lowest closing level in 14 months amid speculation that losses have been excessive amid risks to Middle Eastern supply. West Texas Intermediate was steady before U.S. inventory data.
• European natural gas prices are reversing their biggest slump in five years as concern mounts that tension between Russia and Ukraine will again disrupt flows to the region
• India may topple China as the world’s largest cotton grower next year as farmers plant the biggest area ever, boosting production to near-record levels, according to the Cotton Association of India.

Canada:

• New safety rules advocated by the Transportation Safety Board in its final report released Tuesday on the Lac-Mégantic disaster may result in higher costs for the industry, but it’s the customers of rail companies like Canadian National Railway Co. and Canadian Pacific Railway Ltd. that could be left shouldering the extra cost load, with major  railways largely unhurt by the tougher regime.
• Absolute Software said its fourth-quarter profit doubled to $0.02 per share, and the company also raised its quarterly dividend by a penny.
• Pacific Rubiales Eneergy announced results from an independent resource evaluation for 36 of its 60 exploration blocks in Colombia, Peru, Brazil, Guyana, Guatemala, and Papua New Guinea.

United States:

• U.S. stock-index futures were little changed, after equities rose for a second day, as investors awaited minutes from the Federal Reserve’s last meeting for clues about the interest-rate outlook.
• Lowe’s Cos., the second-largest U.S. home-improvement retailer, cut its full-year revenue forecast even as second-quarter profit topped analysts’ estimates as sales of appliances and yard merchandise increased.
• Staples Inc. will shut about 140 locations this year, part of a store-closing plan announced earlier, as the world’s largest office-supply chain responds to online competition.

International:

• European stocks were little changed, following the biggest two-day gain since April, as investors awaited cues from central banks.
• Russia’s ban on imports of western food could cost the European Union an annual 6.7 billion euros ($9 billion) in lost production, according to ING Groep NV.
• European corporate bonds maturing in a decade or more are outperforming similar securities in the U.S. for a third month as feeble growth and falling consumer prices prove a boon for borrowers.
• Uber Technologies Inc., maker of the ride-hailing application that’s fighting bans by two German cities, may face additional setbacks in the country as other communities weigh blocking or restricting the service.
• Asian stocks fell after valuations reached the highest level this year and as BHP Billiton Ltd. slumped, dragging materials shares to the largest decline on the regional gauge.
• Bank of China Ltd. plans to sell as much as $5 billion equivalent of subordinated bonds that will qualify as Tier 1 as it bolsters its capital base, in what would be the biggest such issuance from the country.
• Standard Chartered Plc agreed to pay $300 million for failing to flag suspicious transactions, as required under a 2012 settlement with New York’s top banking regulator.

*All information is taken from Bloomberg, unless otherwise noted.