October, 4th 2016
Daily Market Commentary
- The dollar strengthened as hawkish comments from a Federal Reserve official spurred wagers that U.S. interest rates will rise before the end of the year. The pound slumped to its weakest level since 1985.
- The prospect of Italy’s first 50-year bond sale comes at a time when the nation’s debt market is already under pressure. Concern that absorbing new multi-decade government bonds will put pressure on prices sparked selling in the final minutes of trading on Monday after the country’s Treasury announced the offering.
- As prospects of Brexit firm up, a fresh weakening in the pound has pushed the FTSE 100 Index of U.K. megacaps above 7,000 for the first time in 16 months.
- Asian stocks rose, with Japanese shares rallying as the yen weakened, after data showing expansion in U.S. manufacturing boosted optimism over the health of the world’s largest economy.
- India surprises many with rate cut, lowered by 25 basis points to 6.25% (Business Insider)
- Australia keeps policy on hold, leaving its interest rate unchanged (Business Insider)
- Goldman Sachs says big money investors (mutual funds) are dumping stocks, becoming net sellers for first time in 4 years (Business Insider)
- Metals: Gold: 1309.06 (-$2.54, -0.19%), Silver: 18.77 (-$0.05, -0.27%), Copper: 2.1755 (-0.76%); Aluminum: 0.7590 (-0.27%); Zinc: 1.0864 (-0.44%)
- Energy: Crude: 48.41 (-0.82%); Brent: 50.72 (-0.33%); Nat Gas: 2.89 (-1.30%)
- Oil declined from the highest close in three months before weekly data forecast to show U.S. crude stockpiles expanded.
- Gold’s back under pressure as investors anticipate higher U.S. interest rates. Prices dropped for a sixth day as the dollar strengthened on speculation that the U.S. economy can withstand an increase this year and UBS Group AG said it was negative on the metal.
- Lucara Diamond Corp. completed the first stage of upgrading its processing plant at the Karowe mine in Botswana that would introduce technology to recover some of the world’s biggest diamonds.
- Efforts to cool Canadian home prices could trickle down to the C$440 billion ($335 billion) market for debt backed by insured residential mortgages. Stricter rules for banks’ lending to home buyers and higher requirements for mortgage insurance could reduce mortgage origination in Canada and in turn lower sales of mortgage-backed securities.
- Canadian stocks slipped for a second day as financial-services shares retreated after the group capped the best quarterly performance since 2013, while Aritzia Inc. surged in its trading debut.
- U.S. stocks index futures rose amid growing investor speculation that the Federal Reserve will judge the world’s biggest economy strong enough to withstand an interest rate hike this year.
- Salesforce.com Inc. is buying marketing-software startup Krux in a cash-and-stock deal estimated at about $700 million, the latest acquisition in a strategy to expand its products against growing competition from bigger rivals.
- Chinese gasoline will reach the U.S. East Coast for the first time in nine years as a surge in New York prices helps ease a glut in Asia.
- Credit Suisse Group AG is seeking to secure a key banking license in Saudi Arabia as part of plans to expand in the kingdom. The Zurich-based bank, which has a securities and equities business in the country, is in talks with the central bank for an onshore license.
- Indian stocks rose for a third day after the new Reserve Bank of India Governor Urjit Patel cut borrowing costs at his first policy review, taking advantage of easing consumer prices to bolster expansion in Asia’s third-largest economy.
- A consortium of MBK Partners and TPG Capital is nearing an agreement to acquire the internet provider owned by Hong Kong billionaire Peter Woo’s Wharf Holdings Ltd. The buyout group will pay about HK$9.5 billion ($1.2 billion) for Wharf T&T Ltd.
- Hitachi Ltd. is considering a sale of its controlling stake in Hitachi Kokusai Electric Inc. that could ultimately lead to a takeover of the entire unit, people familiar with the matter said.
- Ericsson AB plans to cut 3,000 jobs in Sweden, a fifth of the workforce in its home country, as it curbs production to cope with shifting technology and stagnant demand for wireless-network equipment.
- Samsung Biologics Co. is seeking to raise as much as 2.25 trillion won ($2 billion) from a South Korean initial public offering, taking an important step toward its goal of becoming the world’s largest contract manufacturer of biological medicines.
- Infraestructura Energetica Nova, the Mexico-based unit of Sempra Energy, is seeking to raise about $1.27 billion by issuing new shares to fund its recent acquisitions of the country’s largest wind farm and a 50 percent stake in a pipeline company.
*All information is taken from Bloomberg, unless otherwise noted.