January, 23rd 2017
Daily Market Commentary
- European stocks declined as equities that rallied since Donald Trump’s U.S. election led losses following his inaugural speech. Banks and carmakers — among the best performers since Trump’s November win — led declines, while energy shares also weighed on the Stoxx Europe 600 Index amid a drop in oil prices.
- S. stock-index futures declined after U.S. president Donald Trump’s inaugural remarks spurred concern that protectionism will increase, and as investors prepared for a surge in earnings reports.
- Metals: Gold: 1213.26 (+$2.94, +0.24%), Silver: 17.15 (+$0.06, +0.37%); Copper: 2.6385 (+0.51%); Aluminum: 0.8435 (+0.81%); Nickel: 4.4467 (+1.07%); Zinc: 1.2701 (+1.20%)
- Energy: Crude: 52.61 (-1.15%); Brent: 55.06 (-0.77%); Nat Gas: 3.19 (-0.34%)
- Gold held near a two-month high as investor nervousness following Donald Trump’s inauguration weakened the dollar and spurred demand for a haven. Bullion was little changed in London after earlier reaching the highest since Nov. 22, and has advanced in all but two trading sessions so far this year.
- Oil fell after a two-day increase as U.S. drillers added the most rigs in over three years, making it more difficult for OPEC to drain a global oversupply.
- Brookfield Property Partners L.P. announced today that it has made a proposal to Brookfield Canada Office Properties to acquire the approximately 16.9% equity interest in BOX that it or its affiliates do not own (approximately 15.8 million units) for $30.10 cash per unit.
- Hunter Harrison, the outgoing chief executive officer of Canadian Pacific Railway Ltd., is teaming up with activist investor Paul Hilal to target CSX Corp. The pair is likely to push to install Harrison in a leadership position at the U.S. railroad. Harrison, 72, is stepping down from Canadian Pacific months ahead of schedule and forfeiting C$118 million ($89 million) in benefits.
- Canada’s government will consider bilateral trade measures during renegotiation of the North American Free Trade Agreement, a sign it could potentially move ahead at least in part without Mexico. The comments from David MacNaughton, Canada’s ambassador to the U.S., suggest Donald Trump’s protectionist pledges are splintering the continental pact as the U.S. leader prepares to meet Mexican President Enrique Pena Nieto late this month.
- Bond investors are snapping up Canadian bank debt that’s likely to start disappearing under new government rules expected early this year to protect taxpayers from having to bail out a failing financial firm. About C$100 billion ($75 billion) in deposit notes outstanding — senior unsecured bank debt valued for its credit quality, liquidity, and widespread inclusion in portfolios and bond indexes — is set to start being replaced at maturity this year by new “bail-in” senior debt that would convert to equity to stave off a bank failure.
- Qualcomm Inc. forced Apple Inc. to use its chips exclusively in return for lower licensing fees, unfairly cutting out competitors, the U.S. said in a lawsuit against the biggest maker of mobile phone chips. Qualcomm’s exclusive deal with Apple was detailed in a Federal Trade Commission lawsuit accusing the chipmaker of illegally maintaining a monopoly for semiconductors used in mobile phones and pocketing elevated royalties from customers.
- Foxconn Technology Group is considering building a U.S. display-making facility for upwards of $7 billion, a major investment for Apple Inc.’s main manufacturer that may create tens of thousands of American jobs during President Donald Trump’s first year in office.
- All those years of rising U.S. auto sales are starting to work against carmakers. A glut of used vehicles has started to depress prices. That trend will intensify as Americans will return 3.36 million leased cars and trucks this year, another jump after a 33 percent surge in 2016, according to J.D. Power.
- Halliburton Co. reported a fourth-quarter loss as oil prices recover from the worst slump in a generation. The world’s largest fracking provider posted a net loss of $149 million, or 17 cents a share, after losing $28 million, or 3 cents a share, a year earlier, according to a statement Monday.
- Toshiba Corp. shares dropped to their lowest since May after a report that the loss in its nuclear business may exceed the 500 billion yen ($4.4 billion) maximum the company had flagged to lenders.
- Heineken NV said it’s in talks with Kirin Holdings Co. over the Japanese brewer’s unprofitable Brazilian business in a possible deal that would create a stronger No. 2 behind dominant market leader Anheuser Busch-InBev NV. Kirin is nearing an agreement to sell the maker of Schin beer to the Dutch company for about $870 million, the Nikkei newspaper reported Friday.
- Gazprom PJSC, the world’s biggest natural gas producer, is considering asset sales, freezing dividends and higher borrowing as export earnings weaken, according to its three-year budget. The state-controlled company aims to raise 350 billion rubles (around $6 billion) from asset sales this year, while borrowing 53 percent more than last year.
- Chinese stocks haven’t been so subdued since 1992 as government efforts to maintain stability as well as tightening liquidity deter traders. A gauge of 90-day volatility on the Shanghai Composite Index fell to a 24-year low at the end of December and has barely budged since, while turnover on the nation’s equity exchanges slumped to the lowest in two years last week.
- A joint effort to end the war in Syria by Russia, Turkey and Iran entered a new phase on Monday with peace talks in Kazakhstan that leave the U.S. on the sidelines. Syrian officials and representatives of armed opposition groups started a meeting in the Kazakh capital, Astana, organized by the three powers.
- The yuan rose toward a two-month high as the central bank strengthened the currency’s reference rate and the dollar dropped. The yuan may have gotten additional support after Donald Trump didn’t repeat threats to increase tariffs against Chinese products since assuming the presidency.
- The pound’s biggest rally in 24 years is spurring predictions that the worst is over for the beleaguered currency, at least in the short term. Sterling touched a one-month high against the dollar on Monday, after rallying the most since 1993 on Jan. 17 as U.K. Prime Minister Theresa May pledged in a speech to deliver “a smooth and orderly Brexit.”
*All sources from Bloomberg unless otherwise specified