February 1, 2017
Daily Market Commentary
- European stocks rallied on Wednesday as shares most sensitive to economic growth such as automakers and industrials climbed after Siemens AG earnings beat estimates and China reported stronger factory data.
- Optimism about corporate earnings boosted U.S. index futures, signaling a rebound in equities as investors prepare for the Federal Reserve’s rate decision. The S&P 500 on Tuesday capped its longest streak without gains since the week before the U.S. presidential election, trimming a third monthly advance.
- Asian stocks rose, erasing earlier losses as mining shares rallied on gains in metal prices and China’s official factory gauge started 2017 on a robust note. India’s equity benchmark advanced more than 1 percent as the government eased its deficit targets, offered tax cuts and higher spending to cushion the economy.
- Metals: Gold: 1211.42 (+$0.70, +0.06%), Silver: 17.60 (+$0.04, +0.24%); Copper: 2.7115 (-0.59%); Aluminum: 0.8218 (-0.39%); Nickel: 4.5760 (+1.34%); Zinc: 1.2950 (-0.16%)
- Energy: Crude: 53.16 (+0.66%); Brent: 55.99 (+0.74%); Nat Gas: 3.20 (+2.53%)
- Oil traded near $53 a barrel as U.S. industry data showed crude stockpiles expanded even as OPEC producers including Iraq cut production. Government data Wednesday is also forecast to show stockpiles expanded. Iraq, OPEC’s second-largest producer, reduced output by 180,000 barrels a day in January, according to the state oil marketing company.
- Gold declined after posting biggest gain in almost four weeks as the dollar stabilized, with investors weighing potential impact of Donald Trump’s policies ahead of Federal Reserve policy decision.
- Signs of Canada’s housing slowdown are materializing. Output in Canada’s real estate industry fell 0.2 percent in November, Statistics Canada reported Tuesday, snapping a 50-month streak of positive expansion — one of few industries in the country to boast that sort of sustained growth.
- The Canadian dollar advanced to the strongest level since September amid a waning rally in its U.S. counterpart and positive signals from the Canadian economy. The surge extended its gain against the greenback to more than 3 percent in January, its first monthly increase since the middle of last year.
- Seadrill Ltd., the offshore driller with the heaviest debt load, dropped as much as 25 percent on Tuesday to the lowest since November as equity investors face “significant dilution” with the debt restructuring process. The company is seeking to raise at least $1 billion in new capital and is in talks with billionaire-owner John Fredriksen and new investors.
- A make or break time for the dollar as the rally fueled by Donald Trump’s election runs into the Federal Reserve’s policy decision on Wednesday. The greenback’s prospects now hinge on how the U.S. central bank will assess the interest-rate increase in December, its latest inflation outlook and also any comments on risks to the economy and markets from Trump’s decisions.
- George Soros tapped Dawn Fitzpatrick from UBS Asset Management to oversee his $25 billion family office, replacing Ted Burdicka year after he stepped into the role, according to people familiar with the matter.
- BlackRock Inc. agreed to buy the energy infrastructure funds of private-equity firm First Reserve, gaining $3.7 billion in committed capital in two funds and lifting its overall infrastructure investing platform to $14 billion.
- Saudi Aramco, the world’s largest oil company, is considering as much as $5 billion of investments in renewable energy firms as part of plans to diversify from crude production, according to people with knowledge of the matter.
- Deutsche Bank AG was fined $629 million by U.K. and U.S. authorities for compliance failures that saw the bank help wealthy Russians move about $10 billion out of the country using transactions that were likely thinly veiled attempts to cover up financial crime.
- K. factories saw costs rise at a record pace at the start of 2017, pointing to increasing upward pressure on inflation that could weigh on the economy this year.
- India will inject at least 100 billion rupees ($1.48 billion) of capital into state-controlled lenders in the coming fiscal year, an amount that’s in line with a previous government pledge, though it raised questions about the ability of local banks to sustain loan growth.
- Prime Minister Narendra Modi offered tax cuts and boosted spending on some of India’s poorest citizens hurt by his cash ban as he seeks to shore up support before pivotal state elections. The budget shortfall is forecast to be 3.2 percent of gross domestic product in the year starting April 1.
- India announced record spending of 3.96 trillion rupees ($59 billion) to build and modernize its railways, airports and roads as Prime Minister Narendra Modi aims to upgrade the strained infrastructure in Asia’s third-largest economy.
- Japan’s biggest electricity wholesaler knows it’ll take more than cutting-edge coal technology to save the environment. Electric Power Development Co., known as J-Power, is looking to build its first major power plant that burns natural gas near cities such as Tokyo as well as use more woody biomass instead of fossil fuels.
- Volkswagen AG agreed to pay $1.2 billion to resolve U.S. consumer claims over falsified emissions tests, adding to the carmaker’s financial burden in the wake of the diesel scandal as it continues to work its way through legal challenges in the U.S. and Europe.
*All sources from Bloomberg unless otherwise specified