November, 22nd 2016

Daily Market Commentary

 

ECONOMIC NEWS

  • Rising concerns about risks to Italian lenders’ financial stability from the upcoming referendum brought an end to a three-week rally in European shares.
  • U.S. stocks fell from near all-time highs, after equities capped their first monthly advance in four, as technology shares plunged to overshadow rallies in bank and energy shares.
  • European stocks fell, following their first monthly gain in three, dragged lower by equities that offer the highest dividend payouts. Consumer staple companies including Nestle SA and Unilever were among the biggest contributors to declines in the Stoxx Europe 600 Index as higher bond yields made equity income less attractive.

 

Commodities:

  • Rising concerns about risks to Italian lenders’ financial stability from the upcoming referendum brought an end to a three-week rally in European shares.
  • U.S. stocks fell from near all-time highs, after equities capped their first monthly advance in four, as technology shares plunged to overshadow rallies in bank and energy shares.
  • European stocks fell, following their first monthly gain in three, dragged lower by equities that offer the highest dividend payouts. Consumer staple companies including Nestle SA and Unilever were among the biggest contributors to declines in the Stoxx Europe 600 Index as higher bond yields made equity income less attractive.

Canada:

  • Canadian Banks reported this week, with two beating analyst expectations for the 4th quarter, and two disappointing. CIBC topped profit expectations. TD Bank disappointed with weak performance in its retail operations and higher than expected provisions and expenses this quarter. (Financial Post)
  • National Bank of Canada said fiscal fourth-quarter profit fell 12 percent on costs tied to cutting jobs and streamlining operations to better embrace digital banking. The lender raised its quarterly dividend 1.8 percent to 56 cents. Net income for the period ended Oct. 31 slid to C$307 million ($231 million), or 78 cents a share, from C$347 million, or 95 cents, a year earlier.

United States:

  • Shares of Starbucks are down this morning by 4% premarket after the company announced that CEO Howard Schultz would being stepping down next year. (CNN Money)
  • President elect Donald Trump has appointed Marine Gen. James “Mad Dog” Mattis for the role of defense secretary.
  • U.S. President Barack Obama is poised to block a Chinese company from buying Aixtron SE in Germany, people familiar with the matter said, marking only the third time in a quarter century that the White House has rejected an overseas buyer as a national security risk.
  • Johnson & Johnson was ordered by a Texas jury to pay more than $1 billion to patients who claimed the company hid flaws in its Pinnacle artificial hips that had to be surgically removed, in J&J’s second loss linked to the implants.
  • California’s regulator that played a key role in busting Volkswagen AG for cheating on emissions tests laid out a detailed list of options for how the automaker will have to spend $800 million toward advancing cars that don’t pollute the air.
  • The dollar headed for its first weekly decline in about a month as traders trimmed positions before Friday’s jobs report and Sunday’s Italian reform referendum.

International:

  • The Italian stock market has dropped 22% this year (CNN Money)
  • Switzerland’s economy failed to grow for the first time in more than a year in the third quarter, held back by weak domestic demand and the first fall in government spending since early 2014.
  • European Union lawmakers plan to soften draft rules on asset-backed securities after concerns that an earlier proposal would hinder a market-revival drive. Negotiators for the main political parties in the European Parliament’s Economic and Monetary Affairs Committee agreed to give ground on risk-retention levels, the most contentious aspect of their initial plan.
  • India’s government raised by 20 fold the limit on bonds that the central bank can use to mop up excess liquidity in the financial system. The cap on the so-called Market Stabilization Scheme was increased to 6 trillion rupees ($87.9 billion) from 300 billion rupees for the year ending March 2017

*All information is taken from Bloomberg, unless otherwise noted.