September 26th, 2017
Daily Market Commentary
- Canadian stocks extended their latest advance, propelled by rising oil prices that pushed energy shares to their highest in more than three months. The S&P/TSX Composite Index added 62 points or 0.4 percent to 15,516.23, its highest close since May. The benchmark has now gained for seven of the last eight days.
- Negotiators are set to focus on one of the most controversial topics in talks to update the North American Free Trade Agreement — the rules governing the source of inputs for manufactured goods — as administration officials from the U.S. and Mexico arrive in Canada.
- McDonald’s Corp. has become the latest example of how receptive the Canadian debt market has become for global corporate issuers. The fast-food chain priced C$1 billion ($811 million) of bonds on Monday, giving a boost to the Maple bond market that’s on track to be the busiest since the global financial crisis.
- Siemens AG and Alstom SA are nearing an agreement on a framework to combine their rail units, as the German and French engineering companies’ boards prepare to meet to sign off on a deal that would create a European transportation giant, according to people familiar with the negotiations.
- Barrick Gold Corp., the world’s largest producer of the precious metal, isn’t ruling out asset sales as it works on meeting its debt-reduction goal for 2018, according to President Kelvin Dushnisky.
- Markets attempted to stabilize as investors digested a host of catalysts from North Korean war threats and central-bank policy to tailwinds for oil and the aftermath of the German election. The euro weakened as European stocks drifted, while safe havens such as gold took a breather.
- U.S. stock-index futures were steady after Monday’s drop in the S&P 500 as a rout in Apple weighed on tech companies and tensions with North Korea persist. Federal Reserve Chair Janet Yellen is due to speak at an economics conference in Cleveland, while other U.S. and European central bankers will also offer more clues to the path of monetary policy.
- Asian technology stocks fell, weighing on the benchmark index, as investors largely shrugged off the latest threats from North Korea. Energy stocks gained. The MSCI Asia Pacific Index declined 0.3% to 161.65 as of 4:34 p.m. in Hong Kong. North Korea’s foreign minister Ri Yong Ho said in New York that the regime has the right to shoot down U.S. warplanes under the United Nations charter and described U.S. President Donald Trump’s recent comments as tantamount to a declaration of war.
- U.S. crude was back in a bull market Tuesday as Turkey threatened to shut down Kurdish oil exports in response to the region’s independence vote, while Trafigura Group and Citigroup Inc. added to warnings of a looming supply squeeze.
- Gold edges slightly lower, following the biggest gain in more than 2 weeks, as traders weigh North Korean tensions and comments from Federal Reserve policy makers.
- Iron ore’s rout has further to run as China’s anti-pollution campaign over the winter months will hurt demand at a time when global mine supplies are poised to expand, according to Goldman Sachs Group Inc., which described recent losses as a reality check. The commodity will probably sink to $60 a metric ton by year-end as local governments in the top user implement the curbs strictly
- Alvogen’s private equity owners including CVC Capital Partners are exploring options for the generic pharmaceutical company, which could be valued at about $4 billion, according to people familiar with the matter.
- Prime Minister Theresa May’s speech failed to break the Brexit stalemate, as the European Union demands more from the U.K. if there’s to be any hope of a discussion about trade next month. As the fourth round of talks kicked off, both sides remain divided over when Britain should agree to the size of its bill. European affairs ministers from the 27 other EU states were briefed Monday by chief EU negotiator Michel Barnier in Brussels.
- China’s richest real estate billionaires lost $8.2 billion Monday after eight city governments announced housing curbs that threwhigh-flying valuations into a tailspin, with losses likely continuing on Tuesday. Hui Ka Yan, chairman of China Evergrande Group, led the drop with a $3.4 billion decline that trimmed a meteoric 432 percent gain for the year to 385.9 percent.
- Oil bulls are back in the driving seat with $60 a barrel in sight, but it could be a short ride. OPEC and Russia are cutting output deeper than ever, demand is surprisingly strong and the threat of Middle East disruption looms again. Global prices have jumped more than 20 percent since June, with Brent hitting a two-year high on Monday.
- Baidu Inc.’s iQiyi is targeting a U.S. initial public offering as soon as in 2018 that could value China’s most popular Netflix-style streaming video service at more than $8 billion, two people familiar with the matter say. The company controlled by search giant Baidu is about to kick off negotiations with banks and deal arrangers and is shooting for a valuation of as much as $10 billion.
- Nestle SA plans to switch in or out of businesses with combined sales of almost 10 billion francs ($10 billion) as Chief Executive Officer Mark Schneider focuses on coffee, bottled water and pet care to prioritize profitability over scale.
- Alibaba Group Holding Ltd. will buy control of unprofitable delivery business Cainiao for 5.3 billion yuan ($800 million) and spend billions of dollars more to expand a shipping network that spans the world’s largest e-commerce market.
- JPMorgan Chase & Co. confirmed it will hire at least 3,000 people within three years in a new hub in Warsaw, joining other foreign banks lured to the Polish capital by lower costs, a skilled workforce and the nation’s European Union membership.
- Prime Minister Narendra Modi is stuck between a rock and a hard place. Growth in Asia’s third-largest economy has been slowing for the past five quarters, thanks largely to the chaotic roll out of the goods and services tax and a surprise ban on currency notes to pin down tax evaders. That’s sparked talk of stimulus measures to boost expansion from the slowest pace in three years.
- The Philippines is looking to sell what will be its first-ever panda bonds by the end of next month, Finance Secretary Carlos Dominguezsaid Tuesday, as the country seeks to diversify its funding sources by capitalizing on improving relations with China.
- Uber is testing out a new conciliatory tone in London, where officials said they wouldn’t renew the ride-hailing service’s operating license. It’s going to have ample opportunity to see if that approach will work in the U.S. San Francisco’s city attorney is investigating whether Uber Technologies Inc. is a public nuisance. In New York, officials are mulling ways to tighten controls on ride-hailing, including requiring a quarter of all trips come with wheelchair-accessible vehicles. And Seattle has passed an ordinance to make it easier for Uber drivers to unionize.
- Western Digital Corp. warned Toshiba Corp. that legal proceedings against the planned sale of its memory chip business could drag on until 2019, threatening the deal as Toshiba nears a final agreement to sell it to a group led by Bain Capital.
- TPG expects to raise about $2.3 billion for a new Asia buyout fund by the end of the month, putting it on track to reach its target of around $4.5 billion next year, according to people familiar with the matter.
- American International Group Inc., the 98-year-old insurer and retirement planner, is finding being tech-savvy pays off. Consumers are pumping cash into a unit that oversees $244 billion in client assets after it invested in digital platforms to make the process easier.
- South Korean creditors took over the management of the tire-making unit of Kumho Asiana Group — a 71-year-old conglomerate that runs airlines and construction businesses — for a second time after failing to sell the unprofitable partsmaker that was bailed out in 2009.
*All sources from Bloomberg unless otherwise specified