January, 24th 2017
Daily Market Commentary
- European stocks edged higher as the U.K. Supreme Court ruled that a parliamentary vote is needed to trigger the two-year countdown to Brexit. Miners led gains in the Stoxx 600, jumping 2.1 percent toward their highest level since 2014.
- S. stock-index futures were steady on Tuesday, following share declines in the previous session, as investors awaited manufacturing data to help confirm the strength of the world’s biggest economy.
- Asian shares fluctuated as Japanese equities fell after U.S. President Donald Trump signed an executive order to withdraw from the Trans-Pacific Partnership accord. The end of U.S. participation in the free trade agreement with 11 other nations including Japan unnerved investors on both sides of the Pacific.
- Metals: Gold: 1213.76 (-$4.47, -0.37%), Silver: 17.13 (-$0.11, -0.64%); Copper: 2.6730 (+0.95%); Aluminum: 0.8476 (+1.04%); Nickel: 4.4376 (+0.77%); Zinc: 1.2769 (+0.91%)
- Energy: Crude: 52.81 (+0.11%); Brent: 55.22 (-0.02%); Nat Gas: 3.31 (+2.19%)
- S. oil advanced to trade above $53 a barrel as Iraq said it’s close to implementing its share of pledged output curbs agreed with OPEC to trim bloated global inventories.
- Gold retreated from two-month high as dollar rose versus peers, shares gained, curbing demand for a haven.
- Gold consumption in India won’t return to normal levels until 2018, delaying a forecast recovery from a seven-year low, as a liquidity squeeze tightens spending this year in the world’s largest consumer after China, according to the World Gold Council.
- On a day when Donald Trump backed out of one trade deal that included Canada and pledged to reopen a second, signs of optimism emerged from Justin Trudeau’s government that it can escape the upheaval relatively unscathed. Trudeau’s cabinet is meeting in Calgary with Trump atop the agenda.
- Brookfield Asset Management Inc., Canada’s largest alternative asset manager, has entered into exclusive talks to buy bankrupt SunEdison Inc.’s two yieldcos, valuing the power companies at as much as $2.46 billion.
- Amundi SA, which oversees more than $1.1 trillion, is buying the Japanese yen and selling Canada’s currency as U.S. President Donald Trump’s push toward trade protectionism threatens to overshadow his promise of fiscal stimulus. Currencies of economies with big external surpluses including the yen will benefit when trade conflicts flare up, while the Canadian dollar is set to lose because of the nation’s current account deficit.
- Yahoo says sale to Verizon delayed until second quarter (Dundee)
- WestRock Co., a Georgia-based paper company, agreed to buy Multi Packaging Solutions Inc. for $2.3 billion to add specialty products that serve the consumer and health-care industries.
- President Donald Trump will meet Tuesday with the chief executives of the big three U.S. automakers as he looks to persuade car manufacturers to keep production within the country. The heads of Ford Motor Co., Fiat Chrysler Automobiles NV and General Motors Co. will meet Trump at the White House.
- Eight years after the Federal Reserve launched the first of three controversial bond-buying campaigns to help save the U.S. economy, its holdings are stuck at $4.5 trillion, and the question of when to let them shrink is beginning to simmer. The sheer weight of the balance sheet helps hold down long-term U.S. borrowing costs, which is why the Fed bought bonds in the first place. If officials allow holdings to mature without continuing their current practice of reinvesting the principal, they could push yields higher by reducing demand in the bond market.
- DuPont Co. said its merger with Dow Chemical Co. is likely to close in the first half of the year as regulators around the world scrutinize a deal that would combine the two biggest U.S. chemical makers. The updated timetable represented a change from the previous expectation that the transaction would be finalized in the first three months of 2017.
- Turkey’s central bank raised its overnight lending interest rate on Tuesday and said it would tighten further if necessary, building on recent extraordinary measures to bolster the lira and contain its impact on inflation.
- The pound and gilts fell as investors bet a Supreme Court loss for U.K. Prime Minister Theresa May won’t derail the start of a process to exit the European Union. The U.K.’s highest court ruled May needs to seek parliamentary approval to trigger Brexit, an expected decision that hands lawmakers a chance to try to amend the government’s stance.
- China increased interest rates on the medium-term loans it uses to manage liquidity, the strongest signal yet of tightening as it shifts focus to curbing risk in the financial system. The People’s Bank of China raised the one-year Medium-term Lending Facility rate to 3.1 percent from 3 percent and the six-month rate to 2.95 percent from 2.85 percent.
- Busch SE, a family-owned maker of vacuum pumps, offered to buy the remainder of German peer Pfeiffer Vacuum Technologies AG in a deal valued at about 949 million euros ($1 billion) that anticipates further growth in demand for the equipment used in pumps and detectors.
- Assicurazioni Generali SpA jumped the most since 2010 after a newspaper reported Intesa Sanpaolo SpA is considering an all-stock offer for Italy’s biggest insurer. A transaction may involve Germany’s Allianz SE, which could buy some of Generali’s assets to allow Intesa’s offer to comply with competition rules, la Repubblica reported on Tuesday.
- China’s insurance regulator banned insurers from jointly acquiring listed companies with investors from other industries, stepping up curbs on their investments to rein in risks. New rules released by the China Insurance Regulatory Commission on Tuesday also require regulatory pre-approvals before insurers move to acquire a listed company.
- Rio Tinto Group agreed to sell its thermal coal assets in Australia’s Hunter Valley for as much as $2.45 billion as the world’s second-biggest mining company accelerates its move away from the fuel.
- Australia is leading a push to salvage a Pacific trade deal after U.S. President Donald Trump formally withdrew as a signatory to the 12-nation accord.
- Takata Corp.’s bonds are tumbling on concern that debt-holders will only recover a small portion of their funds after bidders for the troubled air-bag maker were said to be leaning toward a court-mediated bankruptcy in Japan.
*All sources from Bloomberg unless otherwise specified