January, 16th 2017
Daily Market Commentary
- Stocks fell across Europe, trimming much of their gains made on Friday, as investors began focusing on week’s policy meeting of the European Central Bank, seeking insight on when the institution may begin to curtail its stimulus measures.
- Asian stocks fell after reports that U.K. Prime Minister Theresa May will signal plans to leave the European Union’s single market. Japan shares led the decline as a stronger yen dragged on exporters.
- Metals: Gold: 1204.30 (+$6.96, +0.58%), Silver: 16.85 (+$0.03, +0.16%); Copper: 2.6825 (-0.28%); Aluminum: 0.8236 (+0.39%); Nickel: 4.6848 (-1.16%); Zinc: 1.2646 (-0.07%)
- Energy: Crude: 52.17 (-0.38%); Brent: 55.23 (-0.40%); Nat Gas: 3.49 (+1.99%)
- Oil advanced after drillers in the U.S. slowed an expansion and Saudi Arabia’s energy minister predicted demand will pick up in the summer. OPEC probably won’t need to extend output cuts beyond the agreed six-month term given the level of compliance with the reductions and the outlook for an increase in global consumption.
- Gold climbs a 6th day in longest run since Nov. 4 as concerns about a so-called hard Brexit spur demand for a haven.
- Canadian banks started their 2017 funding programs by selling a record amount of bonds backed by residential mortgages abroad, taking advantage of lower borrowing costs amid demand for their top-rated debt. The country’s biggest financial institutions have sold about $6 billion in covered bonds denominated in euros, U.S. dollars and pounds this year, the most on record for a year through Jan. 9.
- Altus Group Ltd. plans to double its revenue to about C$800 million ($608 million) in the next five years as the Canadian real estate data provider expands further into property tax consulting with acquisitions in the U.S. and U.K.
- Valeant Pharmaceuticals International Inc., the embattled Canadian drugmaker, agreed to sell about $2.1 billion in assets to get cash to streamline its businesses and begin easing its debt burden. L’Oreal SA will pay Valeant $1.3 billion for three skin-care brands, the Paris-based company Tuesday said in a statement.
- Honda Motor Co. Ltd. will spend C$492 million ($370 million) on upgrades to its Canadian manufacturing plant, including C$84 million in government commitments. The developments announced Monday also includes a federal pledge to loosen the rules of its Automotive Innovation Fund to allow “contributions without the expectation of repayment,”
- American Apparel has a new owner. Canadian Apparel maker Gildan Activewear won the auction for the failed retailer American Apparel with its bid of about $88 million. (CNN Money)
- CAE says the Royal Canadian Air Force and the U.S. Army have awarded the Montreal-based company two long-term contracts that could be worth a total of $1 billion or more.
- Kinder Morgan Inc.’s proposal to expand an oil pipeline in western Canada cleared its final major regulatory hurdle, winning environmental approval from British Columbia after it promised to share part of the spoils with the province. The provincial government has granted the Trans Mountain project an environmental assessment certificate along with 37 conditions.
- Morgan Stanley has won regulatory approval to raise its stake in its China securities venture to the maximum 49 percent allowed under current regulations, according to a person familiar with the matter.
- Marissa Mayer is resigning from Yahoo’s board. Mayer, Yahoo cofounder David Filo, and four other board members will step down once the Verizon merger goes through (CNN Money)
- The U.S. Senate took the first step toward repealing Obamacare in a razor-thin vote early Thursday, even as House leaders were struggling to line up support for a vote later this week. The 51-48 vote fell almost entirely along party lines, an early sign of the contentiousness surrounding Republican plans to undo President Barack Obama’s signature health-care law.
- BMW AG sought to defuse potential tensions with President-elect Donald Trump by noting its factory in the U.S. is its largest in the world and that a new, smaller factory in Mexico will make cars for its global customers and not just Americans. Trump singled out BMW in an interview with German newspaper Bild on Sunday, saying the automaker will face a 35 percent import duty on cars it exports to the U.S. from Mexico.
- Stocks in China’s second-largest equity market plunged the most in 10 months, underscoring the increasing fragility of the nation’s financial assets. The Shanghai Composite Index dropped as much as 2.2 percent in minutes before paring losses amid speculated buying by state-backed funds.
- China’s central bank plans to encourage lenders in the world’s second-largest economy to issue more dollar-dominated debt offshore, according to people familiar with the matter, in an effort that may help the nation’s foreign currency reserves from falling too fast.
- Russian car sales are set to return to growth in 2017 after a four-year slump on pent-up demand as the economy shows signs of reviving. Sales of new cars and light commercial vehicles may rise by about 4 percent to 1.48 million units this year after dropping 11 percent in 2016.
- India’s richest man isn’t done yet. After plowing $25 billion into starting a national fourth-generation mobile network, billionaire Mukesh Ambani is spending more to boost coverage amid complaints from its largest rival that his free services are hurting competition. Reliance Jio Infocomm Ltd., a closely held unit of Ambani’s Reliance Industries Ltd., plans to raise 300 billion rupees ($4.4 billion) from a rights offer and will use the proceeds to enhance its network capacity.
- Atlas Copco plans to break itself up and list its mining tools business in the biggest-ever shakeup of the Swedish company that could spark takeover interest. A newly created company with annual sales of about 28 billion kronor ($3.1 billion) will focus on mining and construction-equipment making, and will be spun off to shareholders in a tax-free distribution.
- Billionaire Li Ka-shing agreed to buy Duet Group in a A$7.4 billion ($5.5 billion) deal, sweetening an earlier offer, as the Hong Kong tycoon seeks to expand his infrastructure assets in Australia to diversify away from Europe.
- Acacia Mining Plc jumped in London trading after the gold miner confirmed it is in early-stage talks with rival Africa-focused producer Endeavour Mining Corp. about a possible merger of the two companies which have a combined value of about $4 billion.
- French lensmaker Essilor International SA agreed to buy Luxottica Group SpA, the maker of Ray-Ban sunglasses, for about 22.8 billion euros ($24 billion) in stock, combining the largest manufacturer and retailer in eyewear.
- Brexit will help strengthen Frankfurt’s status as a main European financial hub if Deutsche Boerse AG completes its $12.4 billion purchase of London Stock Exchange Group Plc, according to research commissioned by the German exchange operator.
- Takata Corp.’s agreement to pay $1 billion to settle a criminal investigation removes a hurdle to the air-bag maker’s sale, which the company needs to continue operations and complete the biggest product recall in automotive history.
*All sources from Bloomberg unless otherwise specified