May 18th, 2018
Daily Market Commentary
- Canadian stocks continued to grind towards a record high, rising for a 10th straight day as Western Canada Select crude prices hit the highest level since 2014.
- The yield on Canada’s 10-year government bond briefly rose above the nation’s 30-year securities for the first time in more than a decade Thursday. The shorter-maturity notes have sold off in the last few days, pushing yields above 2.5 percent for the first time since 2014. Canada is the only developed economy with that part of its yield curve inverted, according to data compiled by Bloomberg.
- Canada’s finance minister said his plan to indemnify Kinder Morgan Inc. against losses on its Trans Mountain expansion project would be carried out in a commercially viable way. Bill Morneau said Thursday the government was not looking to give “a grant or a subsidy” to get the C$7.4 billion ($5.6 billion) pipeline built and that talks are continuing with the company. His comments come a day after he offered an “indemnity” to cover costs of political delays on the pipeline expansion.
- President Donald Trump’s chief Nafta negotiator said the U.S., Canada and Mexico are “nowhere near close to a deal” to update the region’s 24-year-old free-trade pact as U.S. lawmakers warn that time is almost up to reach a agreement that can pass the current Congress.
- Stocks in Europe slipped, failing to follow Asian peers higher amid conflicting reports over progress on trade talks between the world’s largest economies. The dollar reversed a decline and Treasury yields edged lower after reaching the highest level since 2011.
- U.S. index-futures are slightly higher with trade talks set to continue with Chinese Vice Premier Liu He in Washington.
- Oil in London is set for the longest run of weekly gains in seven years as concern over supply disruptions from the Middle East to Venezuela grows and a global glut dissipates.
- Gold headed for biggest weekly drop since December on stronger dollar and as 10-year Treasury yields continue to climb, curbing demand for non-interest bearing precious metals.
- Blackstone Group is finally checking out of Hilton Worldwide Holdings Inc. The firm is planning to sell its remaining stake after the most-profitable private equity deal on record, according to a person with knowledge of the matter. Blackstone is currently Hilton’s largest shareholder with a stake of 5.79 percent as of March 31, according to data compiled by Bloomberg. That values the holding at $1.45 billion as of Thursday’s close.
- The European Union started to activate measures to preserve the Iran nuclear agreement and to protect EU companies operating in the country, as the bloc reiterated support for the landmark deal after President Donald Trump’s decision to withdraw from it.
- AstraZeneca shares retreat from an 11-month high as analysts say 1Q earnings were hurt by rising sales and administration costs to support product launches.
- Italian bonds and stocks stayed on course for weekly declines after the Five Star Movement and the League reached a coalition agreement to govern the country.
- Deere & Co., the world’s biggest farm machinery maker, dropped in early trading in New York after posting disappointing quarterly earnings and saying it will increase prices because of higher raw-material and freight costs.
- China cast doubt on reports that it had offered to reduce its annual trade surplus with the U.S. by $200 billion through increased imports of American products. The offer was made during talks in Washington this week as Vice Premier Liu He visited to try to resolve a trade dispute, according to a Trump administration official who spoke on condition of anonymity.
- SoftBank Group Corp. Chairman Masayoshi Son has battled for years to merge T-Mobile US Inc. with his Sprint Corp. Now that he finally has a deal, he risks having his hands tied by a secretive U.S. government panel. The merger between T-Mobile and Sprint would join the third- and fourth-largest U.S. wireless providers. The new company would be majority owned by foreign investors — one German and one Japanese — triggering a review by the Committee on Foreign Investment in the U.S. for any possible threats to national security.
- Lloyds Banking Group Plc agreed to sell 4.3 billion pounds ($5.8 billion) of Irish residential mortgages to Barclays Plc, all but completing the lender’s decade-long exit from the country.
- Toshiba Corp. credit default swaps fell the most in six months after an announcement Thursday that the Chinese regulator had given the green light to its planned memory business sale, removing a major hurdle to the deal’s completion.
- The new era of big batteries has already drawn scrutiny after fiery electric-car crashes across America and Europe. Now, U.S. city planners are worried about the same risk of hard-to-control blazes as these power-storage units make their way into basements and onto rooftops.
*All sources from Bloomberg unless otherwise specified