September 25th, 2017
Daily Market Commentary
- Talks toward reworking the North American Free Trade Agreement are progressing well, even though the U.S. hasn’t made detailed proposals in some of the most divisive areas, Canada’s chief negotiator said. Steve Verheul, speaking to reporters Sunday in Ottawa during the third round of talks, said the tone remains constructive and there’s no signal the U.S. will walk away, though he said several U.S. proposals have yet to be revealed.
- Bombardier Inc.’s turnaround plan is coming under threat from stepped-up challenges to the company’s rail business and its cutting-edge jetliner. The Canadian manufacturer risks being jilted by Germany’s Siemens AG, which is now exploring a rail-equipment deal with Alstom SA of France after months of talks with Bombardier.
- A casino south of Vancouver favored by wealthy Asian gamblers is under scrutiny for potential money laundering as large amounts of cash flow through the Pacific Coast city’s thriving real estate and gaming industries. The British Columbia government released on Friday a previously confidential July 2016 report that had investigated the River Rock Casino Resort after it accepted C$13.5 million ($11 million) in C$20 bills in just one month in July 2015, capturing the attention of B.C.’s Gaming Policy and Enforcement Branch.
- European stocks are little changed as Angela Merkel wins her fourth term as German Chancellor, with the DAX Index also holding steady. The Stoxx Europe 600 Index falls less than 0.1%, as losses in banks and miners offset gains in travel-and-leisure and media shares.
- Asian equities fell, with the region’s benchmark set for a third day of declines from its highest level in almost a decade, as investors weighed the outlook for returns and political uncertainty prompted some to cash in some of the gains from this year’s rally.
- Oil held gains above $50 a barrel as OPEC and Russia said they were well on the way to clearing a global glut and urged producers to stay focused on curbing supply. Futures slipped 0.3 percent in New York after climbing 1.5 percent last week. The OPEC-led group implemented more than 100 percent of its agreed cuts last month and bloated fuel stockpiles have been “massively drained,” OPEC Secretary-General Mohammad Barkindo said Friday in Vienna.
- Gold declines as dollar steadies, euro weakens after German elections, and as concerns over North Korean tensions fade.
- Iron ore has slumped back into a bear market after posting the biggest weekly loss in 16 months amid concern that record demand in China may ease off as mills enact winter output cuts just as data from the top user signals that the economy may be cooling.
- President Donald Trump and Republican leaders plan to release a tax framework this week that would dramatically cut taxes for corporations and the wealthy, provide a measure of middle-class tax relief and punish some households in Democratic-leaning states like New York and New Jersey.
- Unilever agreed to buy a South Korean cosmetics maker for 2.27 billion euros ($2.7 billion) to gain a stronger foothold in the world’s fourth-largest skincare market. Unilever will buy Carver Korea, maker of AHC skincare products, from shareholders including Goldman Sachs Group Inc. and Bain Capital Private Equity, the London- and Amsterdam-based company said in a statement Monday. Carver had sales of 321 million euros last year.
- Japan’s government raised about 1.3 trillion yen ($11.6 billion) selling a stake in Japan Post Holdings Co., completing the nation’s biggest public offering this century. The shares were sold to domestic and foreign investors for 1,322 yen apiece, 2 percent lower than the closing price on Monday, Tokyo-based Japan Post said in a regulatory filing.
- President Donald Trump restricted or suspended travel to the U.S. from eight countries, adding North Korea and Venezuela, while subtracting Sudan, from his earlier ban on travelers from six Muslim-majority nations.
- Swiss engineering company ABB Ltd. agreed to General Electric Co.’s industrial solutions business for $2.6 billion to strengthen its foothold in the U.S., the world’s biggest market for electrification products like circuit breakers and switchgears.
- U.S. private equity firm Hellman & Friedman LLC agreed to buy Nets A/S for about 33 billion kroner ($5.3 billion), adding to a wave of acquisitions this year in the payments industry as investors seek to profit from the growth in online commerce.
- A Slovenian referendum seeking to block the construction of a second rail track at the country’s Luka Koper seaport failed, edging the Balkan state’s biggest infrastructure project closer to reality after more than 20 years of planning. The number of votes against the law in Sunday’s referendum, which asked whether Slovenes supported “legislation for the construction of second rail-track” that has an estimated cost of 1 billion euros ($1.2 billion) didn’t reach the 342,000 needed to overturn it.
- Japan’s Prime Minister Shinzo Abe said he’ll dissolve the lower house of parliament on Sept. 28 for a general election as he announced an $18 billion economic package. At a press conference Monday, Abe unveiled a slew of economic measures including more education spending. He said he’d pay for them with funds from a consumption tax increase originally intended to rein in the nation’s swollen debt.
- The Bank of England said rapid gains in consumer credit could cause U.K. banks to suffer bigger losses than they’re expecting if the economy weakens. “Lenders overall are placing too much weight on the recent performance of consumer lending in benign conditions as an indicator or underlying credit quality,” the BOE’s Financial Policy Committee said on Monday. “As a result, they have been underestimating the losses they could incur in a downturn.”
- Amazon.com Inc.’s investment in retailer Shoppers Stop Ltd. will help the Indian company boost revenue and add 25 percent more stores, while the U.S. firm expands its reach into smaller towns in the world’s second-most populated nation.
- Oil Search Ltd., the partner of Exxon Mobil Corp. in a $19 billion LNG project in the Pacific nation of Papua New Guinea, has re-emerged as a takeover target after the nation’s government sold its remaining stake in the producer, clearing a potential obstacle for suitors.
- Shandong Weigao Group Medical Polymer Co. agreed to buy closely held Argon Medical Devices Inc. for $850 million, continuing a string of deals by Chinese companies seeking to gain a foothold in the U.S. health-care market.
- For a disease without a cure, and a field of drug development prone to disappointments, Axovant Sciences may be the next great hope. By month’s end, pivotal results from testing Axovant’s experimental intepirdine as a treatment for patients with mild to moderate Alzheimer’s disease could point the way toward a new option for patients and set the company up to generate more than $2 billion in sales by 2023
- Senators sponsoring a last-ditch Obamacare repeal bill scrambled to save it from near-certain death Sunday, circulating a new version aimed at winning over several GOP holdouts, according to two people familiar with the discussions.
- Jaguar Land Rover, the luxury unit of Tata Motors Ltd., is scouting for acquisitions of international automakers amid rising competition in the industry. The company has been holding internal discussions on buying other brands to diversify the range of vehicles it sells, the people said. It will consider purchases of luxury marques that fit with its current portfolio.
*All sources from Bloomberg unless otherwise specified